Cullen/Frost Bankers (CFR) 8-K 2004 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 26, 2005
CULLEN/FROST REPORTS 4th QUARTER RESULTS, RECORD ANNUAL EARNINGS FOR
2004 AND TIMING OF EARNINGS CONFERENCE CALL
SAN ANTONIO -Cullen/Frost Bankers, Inc. today reported net income for the fourth quarter of 2004 of $38.3 million, or $.71 per diluted common share, a 17.5 percent increase over fourth quarter 2003 earnings of $32.6 million, or $.61 per diluted common share. For the last quarter of 2004, return on average assets and equity were 1.52 percent and 18.18 percent respectively, compared to 1.37 percent and 17.02 percent for the same quarter of 2003. The company also reported record annual earnings of $141.3 million, or $2.66 per diluted common share for 2004, an 8.3 percent increase compared to 2003 earnings of $130.5 million, or $2.48 per diluted common share. For the year, return on average assets and equity were 1.47 percent and 17.91 percent respectively, compared to 1.36 percent and 17.78 percent reported in 2003. "It gives me great pleasure to report that 2004 was another record year for our company," said Dick Evans, Cullen/Frost chairman and CEO. "These positive results were impacted by an improving economy and a rising rate environment, coupled with a strong sales effort by our staff. I was also pleased to see the first increase in our net interest margin in four years - to 4.05 percent - primarily as a result of higher volumes and higher rates. Loans reached their highest level ever, ending the year at $5.2 billion. In addition, improvements in credit quality, including a decrease in non-performing assets of 26 percent from last year-end, resulted in lower credit costs." "I am especially proud of our outstanding staff, who met the challenges of the past year with enthusiasm and purpose. They helped us grow the business and control expenses, and I appreciate their hard work and dedication to this company. With their support, Cullen/Frost will continue to build long-term customer relationships and enhance shareholder value." For the year ended December 31, 2004, average annual total loans increased 7.2 percent to $4.8 billion from $4.5 billion for the previous year. Average annual total deposits for 2004 rose to $7.8 billion, a 2.5 percent increase over 2003. As volumes increased and interest rates began to rise during the year, the bank grew net interest income to $331.4 million, a 5.6 percent increase over the $313.8 million reported for 2003. For 2004, non-interest income increased to $225.1 million, a 4.5 percent increase over the previous year, while non-interest expenses rose 5.8 percent over 2003 to $345.0 million. Noted financial data for the fourth quarter follows:
w	Net-interest incomerose 10.5 percent to $87.9 million, from the $79.5 million reported a year earlier. This increase in net interest income was impacted in part by a 4.4 percent increase in average deposits from the fourth quarter of 2003, to $8.0 billion, which in turn contributed to higher average earning assets. Average loans for the quarter were $5.0 billion, up 10.6 percent compared to the $4.5 billion reported for the same period a year earlier. Fueled in part by an increase of 125 basis points in the Fed funds interest rate during 2004, the net interest margin was 4.04 percent for the fourth quarter, up from 4.01 percent for the fourth quarter of 2003.
w	Non-interest income for the fourth quarter of 2004 was $55.8 million, an increase of $2.9 million, or 5.5 percent, over the $52.9 million reported a year earlier. Driving this increase was an 8.7 percent growth in revenue from trust fees, which rose to $13.9 million, compared to $12.8 million during the same quarter a year earlier. Insurance fees were up 10.6 percent from the fourth quarter last year to $6.5 million impacted by the acquisition of the Sammons Group in Dallas during the third quarter of 2004. Service charges on deposits were down 6.8 percent for the same period to $20.9 million. Most of this decrease in service charges occurred as rates have moved up and customers received a higher earnings rate for their deposit balances. This, in turn, resulted in the bank collecting less in fees for services on accounts during the fourth quarter of 2004.
w	For the quarter, non-interest expense was $86.7 million, up $4.3 million or 5.1 percent from the $82.5 million for the fourth quarter of 2003. Most of the increase was due to salaries and wages and related employee benefits, which rose $3.8 million over the same quarter a year earlier as a result of an increase in the number of employees, as well as normal annual merit and market increases.
w	As a resultof continued improvements in asset quality, including reductions in criticized, past due and potential problem loans, the company did not record a provision for possible loan losses for the fourth quarter of 2004. Net charge-offs for the quarter were $1.3 million, or 10 basis points of average loans. For the fourth quarter of 2003, the provision for possible loan losses was $1.5 million, compared to net charge-offs of $1.4 million. The allowance for possible loan losses as a percentage of total loans was 1.47 percent at December 31, 2004, compared to 1.82 percent at December 31, 2003. Non-performing assets were $39.1 million at year-end, down $11.3 million, compared to $50.4 million the previous quarter and down $13.7 million compared to $52.8 million at the end of 2003.
Cullen/Frost Bankers, Inc. will host a conference call on Wednesday, January 26, 2005 at 10:00 a.m. Central Time (CT) to discuss the results for the quarter. The media and other interested parties are invited to access the call in a "listen only" mode at 800-944-6430. Digital playback of the conference call will be available after 12:00 p.m. CT until midnight Sunday, January 30, 2005 at 800-642-1687 with Conference ID # of 3268494. The call will also be available by webcast at the URL listed below and available for playback after 2:00 p.m. CT. After entering the website, www.frostbank.com, go to "About Frost" on the top navigation bar, then click on Investor Relations. Cullen/Frost Bankers, Inc.is a financial holding company, headquartered in San Antonio, with assets of $10 billion at December 31, 2004. 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 Bank, operates 78 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 national bank based in Texas, 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 statementscontained 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, objectives and expectations of Cullen/Frost or its management or Board of Director s, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes", "anticipates", "expects", "intends", "targeted", "continue", "remain", "will", "should", "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.
Forward-lookingstatements 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, national 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 the level of non-performing assets and charge-offs.
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 and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board.
w	Inflation, interest rate, securities 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	Changes in the financial performance and/or condition of the Corporation's borrowers.
w	Technological changes.
w	Acquisitions and the 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 Public Company Accounting Oversight Board, 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 legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews.
w	Greater than expected costs or difficulties related to the integration of new products and lines of business.
w	The Corporation's success at managing the risks involved in the foregoing items.
Forward-lookingstatements 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)
		2004															2003
		4th Qtr				3rd Qtr				2nd Qtr				1st Qtr				4th Qtr
CONDENSED INCOME STATEMENTS
Net interest income	$		87,888		$		83,976		$		81,242		$		78,332		$		79,526
Net interest income(1)			89,416				85,419				82,576				79,691				80,806
Provision for possible loan losses			- --				- --				2,000				500				1,500
Non-interest income:
Trust fees			13,886				13,213				13,704				13,107				12,769
Service charges on deposit accounts			20,855				22,409				22,468				21,683				22,373
Insurance commissions and fees			6,536				8,048				6,234				10,163				5,912
Other charges, commissions and   fees			5,709				4,383				4,952				4,309				4,245
Net gain (loss) on securities   transactions			- --				(1,638	)			- --				(1,739	)			- --
Other			8,765				9,219				8,978				9,866				7,553
Total non-interest income			55,751				55,634				56,336				57,389				52,852
Non-interest expense:
Salaries and wages			40,588				39,836				38,855				38,760				37,194
Employee benefits			9,568				9,532				9,592				11,484				9,176
Net occupancy			7,157				7,524				7,364				7,330				7,040
Furniture and equipment			5,999				5,662				5,661				5,449				5,496
Intangible amortization			1,370				1,285				1,287				1,404				1,409
Other			22,053				22,660				22,440				22,170				22,151
Total non-interest expense			86,735				86,499				85,199				86,597				82,466
Income before income taxes			56,904				53,111				50,379				48,624				48,412
Income taxes			18,573				17,140				16,261				15,719				15,777
Net income	$		38,331		$		35,971		$		34,118		$		32,905		$		32,635
PER SHARE DATA
Net income - basic	$		0.74		$		0.70		$		0.67		$		0.64		$		0.63
Net income - diluted			0.71				0.68				0.65				0.62				0.61
Cash dividends			0.265				0.265				0.265				0.24				0.24
Book value at end of quarter			15.84				15.89				14.41				15.19				14.87
OUTSTANDING SHARES
Period-end shares			51,924				51,988				51,520				51,329				51,776
Weighted-average shares - basic			52,083				51,568				51,281				51,666				51,713
Dilutive effect of stock   compensation			1,555				1,562				1,441				1,525				1,521
Weighted-average shares - diluted			53,638				53,130				52,722				53,191				53,234
SELECTED ANNUALIZED RATIOS
Return on average assets			1.52	%			1.50	%			1.43	%			1.42	%			1.37	%
Return on average equity			18.18				18.45				18.11				16.89				17.02
Net interest income to average   earning assets(1)			4.04				4.09				4.02				4.03				4.01

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

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
		2004																2003
		4th Qtr				3rd Qtr				2nd Qtr				1st Qtr				4th Qtr
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
Loans	$		5,023		$		4,844		$		4,792		$		4,630		$		4,543
Earning assets			8,851				8,317				8,254				7,982				8,029
Total assets			10,028				9,515				9,617				9,313				9,422
Non-interest-bearing   demand deposits			2,947				2,891				2,959				2,860				2,974
Interest-bearing deposits			5,035				4,878				4,743				4,751				4,675
Total deposits			7,982				7,769				7,702				7,611				7,649
Shareholders' equity			839				776				758				784				761
Period-End Balance:
Loans	$		5,165		$		4,948		$		4,813		$		4,726		$		4,591
Earning assets			8,892				8,544				8,132				8,605				8,132
Goodwill and intangible    assets			117				118				112				113				115
Total assets			9,953				9,825				9,570				9,990				9,672
Total deposits			8,106				7,822				7,934				7,773				8,069
Shareholders' equity			822				826				742				780				770
Adjusted shareholders'    equity(1)			833				822				785				758				762
ASSET QUALITY
($ in thousands)
Allowance for possible
loan losses	$		75,810		$		77,114		$		80,485		$		82,587		$		83,501
as a percentage of
period-end loans			1.47	%			1.56	%			1.67	%			1.75	%			1.82	%
Net charge-offs:	$		1,304		$		3,371		$		4,102		$		1,414		$		1,409
As a percentage of
average loans			0.10	%			0.28	%			0.34	%			0.12	%			0.12	%
Non-performing assets:
Non-accrual loans	$		30,443		$		42,701		$		41,046		$		45,415		$		47,451
Foreclosed assets			8,673				7,734				5,152				4,875				5,343
Total	$		39,116		$		50,435		$		46,198		$		50,290		$		52,794
As a percentage of:
Total assets			0.39	%			0.51	%			0.48	%			0.50	%			0.55	%
Total loans and
foreclosed assets			0.76				1.02				0.96				1.06				1.15
CONSOLIDATED CAPITAL RATIOS
Tier 1 Risk-Based
Capital Ratio			12.83	%			13.18	%			13.08	%			12.76	%			11.41	%
Total Risk-Based
Capital Ratio			15.99				16.48				16.52				16.26				15.01
Leverage Ratio			9.18				9.62				9.12				9.21				7.83
Equity to Assets Ratio   (period-end)			8.26				8.41				7.76				7.80				7.96
Equity to Assets Ratio   (average)			8.37				8.15				7.88				8.42				8.08

(1) Shareholders' equity excluding accumulated other comprehensive income (loss).

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
			Year Ended December 31
				2004			2003			2002			2001			2000
CONDENSED INCOME STATEMENTS
Net interest income			$	331,438		$	313,758		$	313,773		$	315,826		$	322,312
Net interest income(1)				337,102			318,945			318,772			320,695			326,997
Provision for possible loan losses				2,500			10,544			22,546			40,031			14,103
Non-interest income:
	Trust fees			53,910			47,486			47,463			48,784			49,266
	Service charges on deposit   accounts			87,415			87,805			78,417			70,534			60,627
	Insurance commissions and fees			30,981			28,660			25,912			18,598			10,698
	Other charges, commissions and   fees			19,353			18,668			16,860			16,176			15,548
	Net gain(loss) on securities   transactions			(3,377	)		40			88			78			4
	Other			36,828			32,702			32,229			29,547			29,472
	Total non-interest income			225,110			215,361			200,969			183,717			165,615
Non-interest expense:
	Salaries and wages			158,039			146,622			139,227			138,347			133,525
	Employee benefits			40,176			38,316			34,614			35,000			28,808
	Net occupancy			29,375			29,286			28,883			29,419			27,693
	Furniture and equipment			22,771			21,768			22,597			23,727			21,329
	Intangible amortization			5,346			5,886			7,083			15,127			15,625
	Restructuring charges			--			--			--			19,865			--
	Other			89,323			84,157			79,738			78,172			76,832
	Total non-interest expense			345,030			326,035			312,142			339,657			303,812
Income from continuing operations,
	before income taxes			209,018			192,540			180,054			119,855			170,012
Income taxes				67,693			62,039			57,821			39,749			58,746
Income from continuing operations				141,325			130,501			122,233			80,106			111,266
Loss from discontinued operations,
	net of tax			--			--			(5,247	)		(2,200	)		(2,449	)
Cumulative effect of accounting
	change, net of tax			--			--			--			3,010			--
Net income			$	141,325		$	130,501		$	116,986		$	80,916		$	108,817
PER SHARE DATA
Income from continuing
	operations - basic		$	2.74		$	2.54		$	2.40		$	1.55		$	2.13
Income from continuing
	operations - diluted			2.66			2.48			2.33			1.50			2.07
Net income - basic				2.74			2.54			2.29			1.57			2.09
Net income - diluted(2)				2.66			2.48			2.23			1.52			2.03
Cash dividends				1.035			0.94			0.875			0.84			0.76
Book value				15.84			14.87			13.72			11.58			11.14
OUTSTANDING SHARES
Period-end shares				51,924			51,776			51,295			51,355			51,430
Weighted-average shares - basic				51,651			51,442			51,001			51,530			52,123
Dilutive effect of stock
	compensation			1,489			1,216			1,422			1,818			1,534
Weighted-average shares - diluted				53,140			52,658			52,423			53,348			53,657
SELECTED ANNUALIZED RATIOS
Income from continuing operations
	ROA			1.47	%		1.36	%		1.46	%		1.02	%		1.56	%
Return on average assets				1.47			1.36			1.40			1.03			1.52
Income from continuing operations
	ROE			17.91			17.78			18.77			13.05			20.87
Return on average equity				17.91			17.78			17.96			13.18			20.41
Net interest income to average
	earning assets(1)			4.05			3.98			4.58			4.89			5.32
(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 and $2.16 for 2000.

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
				Year Ended December 31
					2004			2003			2002			2001			2000
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
	Loans			$	4,823		$	4,497		$	4,537		$	4,547		$	4,353
	Earning assets				8,352			8,011			6,961			6,565			6,148
	Total assets				9,619			9,584			8,353			7,842			7,154
	Non-interest-bearing demand  deposits				2,915			3,038			2,540			2,187			1,897
	Interest bearing deposits				4,852			4,539			4,354			4,364			4,155
	Total deposits				7,767			7,577			6,894			6,551			6,052
	Shareholders' equity				789			734			651			614			533
Period-End Balance:
	Loans			$	5,165		$	4,591		$	4,519		$	4,519		$	4,535
	Earning assets				8,892			8,132			7,710			6,811			6,422
	Goodwill and intangible assets				117			115			119			124			133
	Total assets				9,953			9,672			9,536			8,375			7,665
	Total deposits				8,106			8,069			7,628			7,098			6,500
	Shareholders' equity				822			770			704			595			573
	Adjusted shareholders' equity(1)				833			762			671			609			577
ASSET QUALITY
	($ in thousands)
Allowance for possible loan   losses				$	75,810		$	83,501		$	82,584		$	72,881		$	63,265
	As a percentage of period-end  loans				1.47	%		1.82	%		1.83	%		1.61	%		1.40	%
Net charge-offs:				$	10,191		$	9,627		$	12,843		$	30,415		$	9,183
	As a percentage of average loans				0.20	%		0.21	%		0.28	%		0.67	%		0.21	%
Non-performing assets:
	Non-accrual loans			$	30,443		$	47,451		$	34,861		$	33,196		$	16,662
	Foreclosed assets				8,673			5,343			8,047			4,234			2,271
		Total		$	39,116		$	52,794		$	42,908		$	37,430		$	18,933
	As a percentage of:
		Total assets			0.39	%		0.55	%		0.45	%		0.45	%		0.25	%
		Total loans plus foreclosed
			assets		0.76			1.15			0.95			0.83			0.42
(1)		Shareholders' equity excluding accumulated other comprehensive income, net of tax.