Condensed Financial Statements of Parent Company

Condensed financial statements pertaining only to Cullen/Frost Bankers, Inc. are presented below. Investments in subsidiaries are stated using the equity method of accounting.

Condensed Balance Sheets



	December 31,
	2018		2017
Assets:
Cash	$	11,397	$	9,301
Resell agreements	225,000		256,000
Total cash and cash equivalents	236,397		265,301
Investment in subsidiaries	3,362,474		3,274,921
Accrued interest receivable and other assets	9,122		3,006
Total assets	$	3,607,993	$	3,543,228
Liabilities:
Junior subordinated deferrable interest debentures, net of unamortized issuance costs	$	136,242	$	136,184
Subordinated notes, net of unamortized issuance costs	98,708		98,552
Accrued interest payable and other liabilities	4,126		10,629
Total liabilities	239,076		245,365
Shareholders’ Equity	3,368,917		3,297,863
Total liabilities and shareholders’ equity	$	3,607,993	$	3,543,228

Condensed Statements of Income



	Year Ended December 31,
	2018		2017		2016
Income:
Dividend income paid by Frost Bank	$	223,371	$	149,671	$	141,377
Dividend income paid by non-banks	953		915		895
Interest and other income	1,828		421		33
Total income	226,152		151,007		142,305
Expenses:
Interest expense	9,948		7,815		4,624
Salaries and employee benefits	1,973		1,202		1,828
Other	7,016		6,373		5,933
Total expenses	18,937		15,390		12,385
Income before income taxes and equity in undistributed earnings of subsidiaries	207,215		135,617		129,920
Income tax benefit	5,218		7,092		7,015
Equity in undistributed earnings of subsidiaries	242,485		221,440		167,326
Net income	454,918		364,149		304,261
Preferred stock dividends	8,063		8,063		8,063
Net income available to common shareholders	$	446,855	$	356,086	$	296,198

Condensed Statements of Cash Flows



	Year Ended December 31,
	2018			2017			2016
Operating Activities:
Net income	$	454,918		$	364,149		$	304,261
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries	(242,485		)	(221,440		)	(167,326		)
Stock-based compensation	721			519			520
Net tax benefit from stock-based compensation	304			318			185
Net change in other assets and other liabilities	(12,709		)	7,665			(940		)
Net cash from operating activities	200,749			151,211			136,700

Investing Activities:
Net cash from investing activities	—			—			—

Financing Activities:
Proceeds from issuance of subordinated notes	—			98,434			—
Principal payments on subordinated notes	—			(100,000		)	—
Proceeds from stock option exercises	31,647			67,746			78,866
Proceeds from stock-based compensation activities of subsidiaries	13,222			12,494			11,279
Purchase of treasury stock	(101,010		)	(101,473		)	(1,290		)
Cash dividends paid on preferred stock	(8,063		)	(8,063		)	(8,063		)
Cash dividends paid on common stock	(165,449		)	(144,172		)	(134,902		)
Net cash from financing activities	(229,653		)	(175,034		)	(54,110		)
Net change in cash and cash equivalents	(28,904		)	(23,823		)	82,590
Cash and cash equivalents at beginning of year	265,301			289,124			206,534
Cash and cash equivalents at end of year	$	236,397		$	265,301		$	289,124