Cullen/Frost Bankers (CFR) 8-K 2005 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 25, 2006
CULLEN/FROST REPORTS 4th QUARTER RESULTS, RECORD ANNUAL EARNINGS FOR
2005 AND TIMING OF EARNINGS CONFERENCE CALL
SAN ANTONIO - Cullen/Frost Bankers, Inc.today reported net income for the fourth quarter of 2005 of $44.9 million, or $.81 per diluted common share, a 17.2 percent increase over fourth quarter 2004 earnings of $38.3 million, or $.71 per diluted common share. For the last quarter of 2005, returns on average assets and equity were 1.63 percent and 18.52 percent respectively, compared to 1.52 percent and 18.18 percent for the same quarter of 2004. The company also reported record annual earnings of $165.4 million, or $3.07 per diluted common share for 2005, an increase of 17.1 percent compared to 2004 earnings of $141.3 million, or $2.66 per diluted common share. For the year, returns on average assets and equity were 1.63 percent and 18.78 percent respectively, compared to the 1.47 percent and 17.91 percent reported in 2004. "I am extremely pleased to report that 2005 was another record year for our company," said Dick Evans, Cullen/Frost chairman and CEO. "We announced three acquisitions during the year and closed on one of them, Horizon Capital Bank in the Houston area. During the first quarter, we anticipate closing on the other two, Texas Community Bank in Dallas and Alamo Bank of Texas in the Rio Grande Valley, and we are especially pleased to be bringing these outstanding banks into our Frost family. "Impacting our positive performance for the year were rising interest rates, along with an improving economy and the continuing effects of a strong sales discipline among our staff. As a result of a rising interest rate environment- which is a positive for a bank like Frost with an asset-sensitive balance sheet- net interest margin for the year rose again to 4.45 percent, the highest level since 2002. Loans ended the year at $6.1 billion, reaching their highest level ever, and deposits rose to $9.1 billion, also a record. "This great performance would not be possible without our exceptional staff, who worked hard to execute our plan and manage expenses this year. With their continued support and dedication, Cullen/Frost will continue to focus on our core disciplines as we expand on the foundation of our success in building long-term customer relationships and enhancing shareholder value." For the year ended December 31, 2005, average annual total loans rose 16.0 percent to $5.6 billion from $4.8 billion for the previous year. Average annual total deposits for 2005 increased to $8.1 billion, up 4.7 percent over the $7.8 reported in 2004. Net interest income on a taxable-equivalent basis grew to $398.9 million, reflecting increasing volumes and rising interest rates throughout the year. This represents an 18.3 percent increase over the $337.1 million reported for 2004. For the year, non-interest income increased to $230.4 million, a 2.3 percent increase over the previous year, while non-interest expenses rose 6.4 percent over the previous year to $367.0 million. A $3.4 million net loss from securities transactions recorded in 2004 impacts the comparison over the periods. Noted financial data for the fourth quarter follows:
w	The Corporation acquired Horizon Capital Bank- with loans of $326.3 million and deposits of $319.1 million- after the close of business on October 7, 2005. These loans and deposits, and the results of operations, are included from the date of acquisition.
w	Net interest income on a taxable-equivalent basis increased 23.0 percent to $110.0 million, from the $89.4 million reported a year earlier. This increase in net interest income was impacted in part by an 8.7 percent increase in average deposits from the fourth quarter of 2004, to $8.7 billion, which in turn contributed to a rise of $736 million in average earning assets compared to the fourth quarter last year. The earning asset mix improved when average loans for the quarter rose to $6.0 billion, 19.6 percent higher than the $5.0 billion reported for the same period a year earlier. The rising rate environment during 2005 also had a positive impact on the Corporation's net interest income and net interest margin. The net interest margin was 4.54 percent for the fourth quarter, up from 4.04 percent for the fourth quarter of 2004.
w	Non-interest incomefor the fourth quarter of 2005 was $56.6 million, compared to the $55.8 million reported a year earlier. Trust fees rose 8.4 percent to $15.1 million, compared to $13.9 million for the same quarter of 2004. Insurance commissions and fees were $5.5 million, down from $6.5 million a year earlier. This decrease is due in part to the loss of commission revenues in the employee benefits group of the Austin region due to the departure of certain revenue-producing employees and related business. With the company's insurance operations in a rebuilding mode in 2005, we believe that we now have a solid structure and the right people in place to build revenue going forward.    Service charges on deposits were down 5.3 percent for the same period to $19.7 million. The decrease is primarily due to the rising interest rate environment, in which commercial treasury management customers earn more credit for their deposit balances. This, in turn, reduces the amount of fees paid for these services.    Other non-interest income was $10.7 million, a 22.6 percent increase over the $8.8 million reported a year earlier. The largest factors contributing to this increase were higher income from Visa checkcard usage and higher earnings received from balances the Corporation maintains related to its official check program.
w	For the quarter, non-interest expense was $95.1 million, up $8.3 million or 9.6 percent from the $86.7 million for the fourth quarter of 2004. Combined, salaries and wages and employee benefits were up $2.9 million over the same quarter a year earlier, as a result of normal annual merit and market increases, along with an increase in the number of employees which was impacted by the Horizon acquisition completed in October of 2005. Net occupancy expense was up $1.1 million to $8.2 million, primarily the result of higher electricity costs and property taxes, which were also impacted by the additional locations from the Horizon acquisition. Other expenses were up $4.6 million from the same quarter last year and were also impacted by the Horizon acquisition, including $739,000 in conversion related expenses. Higher marketing related costs, travel and business development related costs, professional expenses and sundry losses contributed to the increase.
w	For the fourth quarter of 2005, the provision for possible loan losses was $3.0 million, compared to net charge-offs of $2.9 million. The company did not record a provision in the fourth quarter of 2004, compared to net charge-offs of $1.3 million. The allowance for possible loan losses as a percentage of total loans was 1.32 percent at December 31, 2005, compared to 1.47 percent at year-end 2004. Non-performing assets were $38.9 million at year-end, compared to $40.8 million the previous quarter and $39.1 million at the end of 2004.
Cullen/Frost Bankers, Inc. will host a conference call on Wednesday, January 25, 2006 at 10:00 a.m. Central Time (CT) to discuss the results for the quarter and the year. 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 29, 2006 with the Conference ID # of 4178558. 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 $11.7 billion at December 31, 2005. 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 83 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 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, expenses, 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 Directors, 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-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, 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 integration of acquired businesses. See the Corporation's Current Reports on Form 8-K filed with the SEC on September 2, 2005 and November 10, 2005.
w	The ability to increase market share and control expenses.
w	Changes in the competitive environment among financial holding companies and other financial service providers.
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-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)
		2005															2004
		4th Qtr				3rd Qtr				2nd Qtr				1st Qtr				4th Qtr
CONDENSED INCOME STATEMENTS
Net interest income	$		107,800		$		99,285		$		94,078		$		90,103		$		87,888
Net interest income(1)			109,968				101,255				95,926				91,789				89,416
Provision for possible loan losses			2,950				2,725				2,175				2,400				- --
Non-interest income:
Trust fees			15,059				14,463				14,541				14,290				13,886
Service charges on    deposit accounts			19,749				20,173				19,462				19,367				20,855
Insurance commissions    and fees			5,539				7,389				6,193				8,610				6,536
Other charges,    commissions and fees			5,438				4,886				4,821				4,288				5,709
Net gain (loss) on   securities transactions			19				- --				- --				- --				- --
Other			10,749				11,143				12,716				11,484				8,765
Total non-interest    income			56,553				58,054				57,733				58,039				55,751
Non-interest expense:
Salaries and wages			43,787				41,818				40,454				40,000				40,588
Employee benefits			9,252				9,973				10,315				12,037				9,568
Net occupancy			8,244				8,111				7,408				7,344				7,157
Furniture and equipment			5,983				6,202				5,925				5,802				5,999
Intangible amortization			1,160				1,050				1,278				1,371				1,370
Other			26,652				24,838				24,070				23,933				22,053
Total non-interest    expense			95,078				91,992				89,450				90,487				86,735
Income before income taxes			66,325				62,622				60,186				55,255				56,904
Income taxes			21,408				20,167				19,502				17,888				18,573
Net income	$		44,917		$		42,455		$		40,684		$		37,367		$		38,331
PER SHARE DATA
Net income - basic	$		0.83		$		0.81		$		0.78		$		0.72		$		0.74
Net income - diluted			0.81				0.79				0.77				0.70				0.71
Cash dividends			0.30				0.30				0.30				0.265				0.265
Book value at end of quarter			18.03				17.03				16.81				15.59				15.84
OUTSTANDING SHARES
Period-end shares			54,483				52,657				52,308				51,817				51,924
Weighted-average shares - basic			54,015				52,345				51,884				51,653				52,083
Dilutive effect of stock   compensation			1,346				1,285				1,246				1,416				1,555
Weighted-average shares - diluted			55,361				53,630				53,130				53,069				53,638
SELECTED ANNUALIZED RATIOS
Return on average assets			1.63	%			1.68	%			1.67	%			1.54	%			1.52	%
Return on average equity			18.52				18.98				19.35				18.31				18.18
Net interest income to   average earning assets(1)			4.54				4.52				4.42				4.29				4.04

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

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
		2005																2004
		4th Qtr				3rd Qtr				2nd Qtr				1st Qtr				4th Qtr
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
Loans	$		6,008		$		5,593		$		5,483		$		5,286		$		5,023
Earning assets			9,587				8,916				8,697				8,666				8,851
Total assets			10,901				10,037				9,786				9,840				10,028
Non-interest-bearing demand    deposits			3,302				2,964				2,869				2,897				2,947
Interest-bearing deposits			5,378				5,052				5,005				5,058				5,035
Total deposits			8,680				8,016				7,874				7,955				7,982
Shareholders' equity			962				887				844				828				839
Period-End Balance:
Loans	$		6,085		$		5,710		$		5,589		$		5,403		$		5,165
Earning assets			10,197				9,185				8,903				8,768				8,892
Goodwill and intangible    assets			184				111				112				115				117
Total assets			11,741				10,280				9,951				9,849				9,953
Total deposits			9,146				8,283				8,011				8,003				8,106
Shareholders' equity			982				897				879				808				822
Adjusted shareholders'    equity(1)			1,033				928				890				849				833
ASSET QUALITY
($ in thousands)
Allowance for possible
loan losses	$		80,325		$		77,117		$		77,103		$		76,538		$		75,810
as a percentage of
period-end loans			1.32	%			1.35	%			1.38	%			1.42	%			1.47	%
Net charge-offs	$		2,928		$		2,711		$		1,610		$		1,672		$		1,304
Annualized as a percentage
of average loans			0.19	%			0.19	%			0.12	%			0.13	%			0.10	%
Non-performing assets:
Non-accrual loans	$		33,179		$		34,432		$		34,205		$		32,884		$		30,443
Foreclosed assets			5,748				6,394				7,130				8,189				8,673
Total	$		38,927		$		40,826		$		41,335		$		41,073		$		39,116
As a percentage of:
Total loans and
foreclosed assets			0.64	%			0.71	%			0.74	%			0.76	%			0.76	%
Total assets			0.33				0.40				0.42				0.42				0.39
CONSOLIDATED CAPITAL RATIOS
Tier 1 Risk-Based
Capital Ratio			12.24	%			13.01	%			12.84	%			12.73	%			12.83	%
Total Risk-Based
Capital Ratio			14.94				15.92				15.82				15.82				15.99
Leverage Ratio			9.62				10.16				10.06				9.51				9.18
Equity to Assets Ratio   (period-end)			8.37				8.72				8.84				8.20				8.26
Equity to Assets Ratio   (average)			8.82				8.84				8.62				8.41				8.37

(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
				2005			2004			2003			2002			2001
CONDENSED INCOME STATEMENTS
Net interest income			$	391,266		$	331,438		$	313,758		$	313,773		$	315,826
Net interest income(1)				398,938			337,102			318,945			318,772			320,695
Provision for possible loan losses				10,250			2,500			10,544			22,546			40,031
Non-interest income:
	Trust fees			58,353			53,910			47,486			47,463			48,784
	Service charges on deposit   accounts			78,751			87,415			87,805			78,417			70,534
	Insurance commissions and fees			27,731			30,981			28,660			25,912			18,598
	Other charges, commissions and fees			19,433			19,353			18,668			16,860			16,176
	Net gain(loss) on securities   transactions			19			(3,377	)		40			88			78
	Other			46,092			36,828			32,702			32,229			29,547
	Total non-interest income			230,379			225,110			215,361			200,969			183,717
Non-interest expense:
	Salaries and wages			166,059			158,039			146,622			139,227			138,347
	Employee benefits			41,577			40,176			38,316			34,614			35,000
	Net occupancy			31,107			29,375			29,286			28,883			29,419
	Furniture and equipment			23,912			22,771			21,768			22,597			23,727
	Intangible amortization			4,859			5,346			5,886			7,083			15,127
	Restructuring charges			--			--			--			--			19,865
	Other			99,493			89,323			84,157			79,738			78,172
	Total non-interest expense			367,007			345,030			326,035			312,142			339,657
Income from continuing operations,
	Before income taxes			244,388			209,018			192,540			180,054			119,855
Income taxes				78,965			67,693			62,039			57,821			39,749
Income from continuing operations				165,423			141,325			130,501			122,233			80,106
Loss from discontinued operations,
	net of tax			--			--			--			(5,247	)		(2,200	)
Cumulative effect of accounting
	change, net of tax			--			--			--			--			3,010
Net income			$	165,423		$	141,325		$	130,501		$	116,986		$	80,916
PER SHARE DATA
Income from continuing
	operations - basic		$	3.15		$	2.74		$	2.54		$	2.40		$	1.55
Income from continuing
	operations - diluted			3.07			2.66			2.48			2.33			1.50
Net income - basic				3.15			2.74			2.54			2.29			1.57
Net income - diluted				3.07			2.66			2.48			2.23			1.52
Cash dividends				1.165			1.035			0.94			0.875			0.84
Book value				18.03			15.84			14.87			13.72			11.58
OUTSTANDING SHARES
Period-end shares				54,483			51,924			51,776			51,295			51,355
Weighted-average shares - basic				52,481			51,651			51,442			51,001			51,530
Dilutive effect of stock
	compensation			1,322			1,489			1,216			1,422			1,818
Weighted-average shares - diluted				53,803			53,140			52,658			52,423			53,348
SELECTED ANNUALIZED RATIOS
Income from continuing operations
	ROA			1.63	%		1.47	%		1.36	%		1.46	%		1.02	%
Return on average assets				1.63			1.47			1.36			1.40			1.03
Income from continuing operations
	ROE			18.78			17.91			17.78			18.77			13.05
Return on average equity				18.78			17.91			17.78			17.96			13.18
Net interest income to average
	earning assets(1)			4.45			4.05			3.98			4.58			4.89
(1)		Taxable-equivalent basis assuming a 35% tax rate.

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
				Year Ended December 31
					2005			2004			2003			2002			2001
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
	Loans			$	5,594		$	4,823		$	4,497		$	4,537		$	4,547
	Earning assets				8,969			8,352			8,011			6,961			6,565
	Total assets				10,143			9,619			9,584			8,353			7,842
	Non-interest-bearing demand  deposits				3,009			2,915			3,038			2,540			2,187
	Interest bearing deposits				5,124			4,852			4,539			4,354			4,364
	Total deposits				8,133			7,767			7,577			6,894			6,551
	Shareholders' equity				881			789			734			651			614
Period-End Balance:
	Loans			$	6,085		$	5,165		$	4,591		$	4,519		$	4,519
	Earning assets				10,197			8,892			8,132			7,710			6,811
	Goodwill and intangible assets				184			117			115			119			124
	Total assets				11,741			9,953			9,672			9,536			8,375
	Total deposits				9,146			8,106			8,069			7,628			7,098
	Shareholders' equity				982			822			770			704			595
	Adjusted shareholders' equity(1)				1,033			833			762			671			609
ASSET QUALITY
	($ in thousands)
Allowance for possible loan   losses				$	80,325		$	75,810		$	83,501		$	82,584		$	72,881
	As a percentage of period-end  loans				1.32	%		1.47	%		1.82	%		1.83	%		1.61	%
Net charge-offs:				$	8,921		$	10,191		$	9,627		$	12,843		$	30,415
	As a percentage of average loans				0.16	%		0.20	%		0.21	%		0.28	%		0.67	%
Non-performing assets:
	Non-accrual loans			$	33,179		$	30,443		$	47,451		$	34,861		$	33,196
	Foreclosed assets				5,748			8,673			5,343			8,047			4,234
		Total		$	38,927		$	39,116		$	52,794		$	42,908		$	37,430
	As a percentage of:
		Total loans plus foreclosed
			assets		0.64	%		0.76	%		1.15	%		0.95	%		0.83	%
		Total assets			0.33			0.39			0.55			0.45			0.45
(1)		Shareholders' equity excluding accumulated other comprehensive income, net of tax.