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, 1997
___ 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, $.01 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 $1,251,133,604 based on the closing price of such stock as
of March 26, 1998.
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 26, 1998
-------------------------- --------------
Common Stock, $.01 par value 22,259,489
DOCUMENTS INCORPORATED BY REFERENCE
(1) Proxy Statement for Annual Meeting of Shareholders to be held May 27, 1998
(Part III)
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, 1997 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/A.
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, 1997 and 1996.
23.2 Consent of Independent Auditors with respect to 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 29, 1998 By:/s/Phillip D. Green
-----------------------
Phillip D. Green
Executive Vice President
and Chief Financial Officer
(Duly Authorized Officer and
Principal Accounting Officer)
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 Articles of Incorporation of Cullen/Frost Bankers, Inc. as
amended through 1997 (12)
3.2 Amended By-Laws of Cullen/Frost Bankers, Inc. (1995 Form 10-K/A,
Exhibit 3.2)(9)
4.1 Shareholder Protection Rights Agreement dated as of August 1,
1996 between Cullen/Frost Bankers, Inc. and The Frost National
Bank, as Rights Agent (1996) Form 8-A12G/A, Exhibit 1)(10)
10.1 1983 Non-qualified Stock Option Plan, as amended (1989 Form S-8,
Exhibit 4(g))(2)
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)(1)*
10.3 Form of Revised Change-In-Control Agreements with four Executive
Officers (1989 Form 10-K, Exhibit 10.13(a))(4)*
10.4 1988 Non-qualified Stock Option Plan (1989 Form S-8, Exhibit
4(g))(3)
10.5 The 401(k) Stock Purchase Plan for employees of Cullen/Frost
Bankers, Inc. and its Affiliates (1990 Form S-8, Exhibit
4(g))(5)*
10.6 1991 Thrift Incentive Stock Purchase Plan for Employees of
Cullen/Frost Bankers, Inc. and its Affiliates (1991 Form S-8,
Exhibit 4(g))(6)*
10.7 Cullen/Frost Bankers, Inc. Restricted Stock Plan (1992 Form S-8,
Exhibit 4(d))(7)*
10.8 Cullen/Frost Bankers, Inc. Supplemental Executive Retirement Plan
(1994 Form 10-K, Exhibit 10.13)(8)
10.9 Form of Revised Change-In-Control Agreements with one Executive
Officer (1994 Form 10-K, Exhibit 10.14)(8)
10.10 Retirement agreement with one Executive Officer (1996 Form 10-K,
Exhibit 10.13)(11)
10.11 Cullen/Frost Bankers, Inc. 1997 Directors Stock Plan (12)
10.12 Cullen/Frost Bankers, Inc. 1992 Stock Plan, as amended (12)
11 Statement re: computation of earnings per share (12)
11.1 Statement re: SFAS 128 restated quarterly computation of earning
per share for years 1997 and 1996 (12)
19.1 Annual Report on Form 11-K for the Year Ended December 31, 1997,
for the 1991 Thrift Incentive Stock Purchase Plan (filed pursuant
to Rule 15d-21 of the Securities and Exchange Act of 1934)(13)
19.2 Annual Report on Form 11-K for the Year Ended December 31, 1997,
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 Plan (13)
23.2 Consent of Independent Auditors with respect to Form 10-K/A for
the 401(k) Stock Purchase Plan (14)
24 Power of Attorney
27 Financial Data Schedule
* 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, 1997.
______________________
(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,
1988 (File No. 0-7275)
(2) 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)
(3) 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)
(4) 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)
(5) 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)
(6) 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)
(7) 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)
(8) 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)
(9) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Annual Report on Form 10-K/A for the Year Ended
December 31, 1995 (File No. 0-7275)
(10) 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)
(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, 1996 (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, 1997 (File No. 0-7275)
(13) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Amendment No. 1 on Form 10-K/A to the Annual Report on
Form 10-K for the Year Ended December 31, 1997 (File No. 0-7275)
(14) Filed herewith.
EXHIBIT INDEX TO FORM 10-K/A
Exhibit
Number Description of Exhibits
- ------------------------------------------
19.2 The financial statements and exhibits required by Form 10-K/A
with respect to the 401 (k) Stock Purchase Plan for Employees
of Cullen/Frost Bankers, Inc. for the fiscal years ended
December 31, 1997 and 1996 (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/A 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, 1997 and 1996.
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, 1997 and 1996
with Report of Independent Auditors
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, 1997 and 1996
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
Supplemental Schedules
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, 1997 and 1996, 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, 1997 and 1996, 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, 1997 and reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's
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 1997 financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
1997 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.
June 23, 1998
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
1997 1996
--------------------
Assets
Common stock of Cullen/Frost Bankers, Inc.
(pending distribution) $ 17,538 $ -
Investments, at fair value:
Common stock of Cullen/Frost Bankers,Inc. 88,099,682 48,389,886
AIM Short-Term Prime Money Market Fund 82 917 3,638,886
AIM LTD Maturity Treasury Fund 921,338 557,177
Templeton Growth Fund 2,934,922 1,788,533
Fidelity Advisor Growth Opportunities Fund 4,107,804 2,492,788
Fidelity Money Market Fund 4,953,482 -
Optimum Mix/Total Return Portfolio 4,416,454 2,380,739
Short-Term Investment Co. Prime Portfolio 417,283 -
Participant loans 6,133,895 4,734,801
---------------------------
Total investments 112,085,315 63,982,810
Receivables:
Employer contributions 102,149 87,841
Participants' contributions 161,607 143,447
Proceeds of sale of common stock of
Cullen/Frost Bankers, Inc. - 365,085
Interest 1,035 256
Merger asset 705,496 -
---------------------------
Net assets available for benefits $113,055,602 $64,579,439
===========================
See accompanying notes.
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,
1997 1996
--------------------------
Additions to net assets attributed to:
Investment activities:
Interest $ 233,798 $ 179,797
Dividends 2,389,485 1,482,206
Net appreciation in fair value of
Investments 40,750,675 12,622,446
--------------------------
43,373,958 14,284,449
Contributions:
Employer 1,961,981 1,565,914
Participants 4,831,873 5,501,575
--------------------------
Total additions 50,167,812 21,351,938
Deductions from net assets attributed to:
Benefits paid to participants 2,397,145 2,434,253
Transfer of funds due to plan merger (705,496) -
--------------------------
Net increase 48,476,163 18,917,685
Net assets available for benefits at
beginning of year 64,579,439 45,661,754
--------------------------
Net assets available for benefits at
end of year $113,055,602 $ 64,579,439
==========================
See accompanying notes.
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements
December 31, 1997 and 1996
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, and Short-
Term Investments Co. Prime 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 CFBI.
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.
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.
General
The Plan is a defined contribution plan qualified under Section 401(a) of the
Internal Revenue Code (IRC) 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).
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1997 and 1996
2. Description of the Plan (continued)
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 Short-Term Prime Money
Market Fund, AIM LTD Maturity Treasury Fund, Templeton Growth Fund, Fidelity
Advisor Growth Opportunities Fund, Fidelity Money Market Fund, or Optimum
Mix/Total Return Portfolio, or Short-Term Investments Co. Prime Portfolio.
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.
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
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1997 and 1996
2. Description of the Plan (continued)
1 to 5 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
semimonthly payroll deductions. Subject to Internal Revenue Service (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.
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, 1997, there were nine terminated participants in the Plan
entitled to aggregate vested benefits totaling $82,411 in cash disbursements
and 5,211 shares of CFBI common stock, or $316,256, applying the fair market
value of the stock of $60.69 per share at December 31, 1997. 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.
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1997 and 1996
4. Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31
1997 1996
-------------------------
Net assets available for benefits per the
financial statements $113,055,602 $64,579,439
Amounts allocated to withdrawing
Participants (398,667) (343,138)
--------------------------
Net assets available for benefits per the
Form 5500 $112,656,935 $64,236,301
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year Ended December 31
1997 1996
--------------------------
Benefits paid to participants per the financial
Statements $ 2,397,145 $ 2,434,253
Add: Amounts allocated to withdrawing
participants at the end of the year 398,667 343,138
Less: Amounts allocated to withdrawing
participants at the end of the prior year (343,138) (277,350)
-------------------------
Benefits paid to participants per the
Form 5500 $ 2,452,674 $ 2,500,041
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.
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1997 and 1996
5. Income Tax Status
The IRS has determined and informed the Company by a letter dated October 26,
1996 that the Plan and related trust are designed in accordance with applicable
sections of the 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.
6. Plan Merger
Effective December 31, 1997, the Citizens State Bank of Corpus Christi
Employees' 401(k) Profit Sharing Plan (CSB) was merged into the Plan.
Approximately $705,496 will be transferred from CSB's trustee to CFBI
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1997 and 1996
7. 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 for the year ended December
31, 1997:
Common Stock Cullen/Frost AIM Short-
Of Cullen/Frost Bankers, Inc. Term Price AIM LTD
Bankers, Inc Common Stock Money Market Maturity Templeton
(Pending Fund Fund Treasury Fund Growth Fund
Distribution)
-------------------------------------------------------------
Additions to net assets
attributed to:
Interest $ $ $ 189,040 $ $
Dividends 1,405,212 38,450 $423,910
Net appreciation in
fair value of investments 37,733,069 1,587,681 3,766 (95,739)
Investment election transfer (1,235,071) (5,414,095) 281,484 489,737
Contributions:
Employer 1,961,981
Participants 17,538 2,581,993 200,405 56,442 390,949
Loan withdrawals (3,273,800 167,955 (23,414) (94,272)
------------------------------------------------------------
Total additions
(decreases) 17,538 39,173,384 (3,269,014) 356,728 1,114,585
Deductions from net assets
attributed to:
Benefits paid to
Participants 1,946,290 160,951 1,820 46,755
Loan interest and principal (2,150,864) 126,004 9,253 (78,559)
Transfer of funds due to
plan merger (705,496)
-------------------------------------------------------------
Total deductions
(additions) (910,070) 286,955 (7,433) (31,804)
-------------------------------------------------------------
Net increase (decrease)17,538 40,083,454 (3,555,969) 364,161 1,146,389
Net assets available for benefits
at beginning of year 48,986,515 3,638,886 557,177 1,788,533
Net assets available for benefits
at end of year $17,583 $89,069,969 $ 82,917 $921,338 $ 2,934,922
==============================================================
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1997 and 1996
7. Statement of Changes in Net Assets Available for Benefits Segregated by
Participant-Directed Investment Type (continued)
Fidelity Advisor Optimum
Growth Fidelity Mix/Total Short-Term
Opportunuties Money Market Return Investments Participant
Fund Fund Portfolio Prime Portfolio Loans Totals
Additions to net assets
attributed to:
Interest $ $ 44,758 $ $ $ $233,798
Dividends 340,770 188,143 2,389,485
Net appreciation in
fair value
of investments 20,201 279,251 1,222,433 40,750,675
Investment election
transfer 688,557 4,608,223 581,165 -
Contributions:
Employer 1,961,981
Participants 645,782 20,186 501,295 417,283 4,831,873
Loan withdrawals(143,117) (10,637) (358,043) $3,735,358 -
---------------------------------------------------------------------
Total additions
(decreases) 1,552,206 4,941,781 2,127,993 417,283 3,735,328 50,150,274
Deductions from net assets
attributed to:
Benefits paid
to participants 78,946 4,166 20,236 - 137,981 2,397,145
Loan interest
and principal (141,756) (15,867) 72,042 - 2,198,253 -
Transfer of funds due to
plan merger (705,496)
----------------------------------------------------------------------
Total deductions
(additions) (62,810) (11,701) 92,278 - 2,336,234 1,691,649
---------------------------------------------------------------
Net increase
(decrease) 1,615,016 4,953,482 2,035,715 417,283 1,691,649 48,476,163
Net assets available
for benefits
at beginning of year 2,492,788 - 2,380,739 - 4,734,801 $ 64,579,439
-----------------------------------------------------------------
Net assets available for benefits
at end of year
$4,107,804 $4,953,483 $4,416,454 $417,283 $6,133,895 $113,055,602
===================================================================
Supplemental Schedules
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
Description of Investmnet,
Including Maturity Date,
Identity of Issue, Borrower, Rate of Interest,
Lessor, Collateral, Par or Current
Or Similar Party Maturity Date Cost Value
- -------------------------------------------------------------------------------
*Cullen/Frost Bankers, Inc. Common stock
1,451,706 shares **$ 88,099,682 $ 88,099,682
*Cullen/Frost Bankers, Inc Common Stock
(pending distribution) 289 shares 17,538 17,538
AIM Short-Term Prime Money market deposit
Money Market Fund account, variable interest,
available upon demand 82,917 82,917
Short-Term Investments
Co. Prime Portfolio Mutual fund 417,283 417,283
*Participant loans Interest accrued at Frost
National Bank prime
rate, varying maturity
dates, 8.25%- 8.50%
charged during 1997 6,133,895 6,133,895
Optimum Mix/Total Return
Portfolio Mutual fund 3,578,175 4,416,454
AIM LTD Maturity
Treasury Fund Mutual fund 917,904 921,338
Templeton Growth Fund Mutual fund 2,957,521 2,934,922
Fidelity Advisor Growth
Opportunities Fund Mutual fund 4,133,289 4,107,804
Fidelity Money Market Money market deposit
Fund account 4,953,482 4,953,482
*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.
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1997
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)
- --------------------------------------------------------------------------------------------
Category (iii) - Series of
Securities Transactions
Loan Fund $ 3,735,559 - $ 3,735,559 $3,735,559 -
Loan Fund - $2,336,465 2,336,465 2,336,465 -
AIM Short-Term Prime 13,582,321 - 13,582,321 13,582,321 -
Money Market Fund
AIM Short-Term Prime - 8,654,833 8,654,833 8,654,833 -
Money Market Fund
Fidelity Money 2,349,841 - 2,349,841 2,349,841 -
Market Fund
Fidelity Money - 5,799,297 5,799,297 5,799,297 -
Market Fund
Common stock:
Cullen/Frost Bankers, Inc. 9,079,036 - 9,079,036 9,079,036 -
Cullen/Frost Bankers, Inc. - 8,820,367 5,511,967 8,820,367 $3,308,399
There were no Category (i),
(ii), or (iv) transactions
during the year ended
December 31, 1997.
* 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.
EXHIBIT 23.2
Consent of Independent Auditors with respect to Form 10-K/A
for the 401(k) Stock Purchase Plan.
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, 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, and the Registration Statement
(Form S-4 No. 333-49317) pertaining to the registration of up to 4,400,000
shares of its common stock, of our report dated June 23, 1998 with respect
to the financial statements of the 401(k) Stock Purchase Plan for 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, 1997.
ERNST & YOUNG LLP
San Antonio, Texas
June 26 1998