-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, AmG/PAdlm9f12vfbipsQspAiBHrgYwVTZkmFB4Zd8IWrps1WkL3tmR/ZxDnpnsl3 YMESCawQBwt3GnuL4P3EaA== 0000039263-95-000011.txt : 199506300000039263-95-000011.hdr.sgml : 19950630 ACCESSION NUMBER: 0000039263-95-000011 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950629 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CULLEN FROST BANKERS INC CENTRAL INDEX KEY: 0000039263 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 741751768 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 000-07275 FILM NUMBER: 95551074 BUSINESS ADDRESS: STREET 1: 100 W HOUSTON ST STREET 2: P O BOX 1600 CITY: SAN ANTONIO STATE: TX ZIP: 78205 BUSINESS PHONE: 2102204841 FORMER COMPANY: FORMER CONFORMED NAME: FROST BANK CORP DATE OF NAME CHANGE: 19770823 10-K405/A 1 AMENDED FORM 10-K TO INCLUDE EXHIBIT 19.2 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 [Fee Required] FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 ___ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] 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, $5 Par Value -------------------------- (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. X --- The aggregate market value of the voting stock held by non-affiliates of the registrant was $381,504,617 based on the closing price of such stock as of March 24, 1995. 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 24, 1995 -------------------------- -------------- Common Stock, $5 par value 11,136,987 DOCUMENTS INCORPORATED BY REFERENCE (1) Annual Report to Shareholders for the Year Ended December 31, 1994 (Parts I & II) (2) Proxy Statement for Annual Meeting of Shareholders to be held May 16, 1995 (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, 1994 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. 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, 1994 and 1993. 23.3 Consent of Independent Auditors with respect to Form 10-K as amended by this 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, 1995 By:/s/Phillip D. Green ----------------------- Phillip D. Green Executive Vice President and Treasurer (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 ------- 2.1 Agreement and Plan of Merger among Texas Commerce Bancshares, Inc., Texas Commerce Equity Holdings, Inc., Texas Commerce Bank, N.A., Texas Commerce Bank - Corpus Christi, N.A., Cullen/Frost Bankers, Inc., The New Galveston Company, The Frost National Bank of San Antonio and Cullen/Frost Bank of Dallas, N.A. dated August 26, 1993. (1993 Form 8-K, Exhibit 10)(14) 3.1 Restated Articles of Incorporation, as amended (1988 Form S-8, Exhibit 4(a))(4) 3.2 Amended By-Laws of Cullen/Frost Bankers, Inc. 4.1 Guaranty, dated April 27, 1981, by Cullen/Frost Bankers, Inc. to Colonial/Citizens Associates (1985 Form S-8, Exhibit 4(e))(2) 4.2 Shareholder Protection Rights Agreement dated as of July 25, 1989 between Cullen/Frost Bankers, Inc. and The Bank of New York, as Rights Agent (1989 Form 8-K, Exhibit 1)(6) 10.1 1983 Non-qualified Stock Option Plan, as amended (1989 Form S-8, Exhibit 4(g))(7) 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)(5)* 10.3 Pension Benefit Contract (1984 Form 10-K, Exhibit 10.8)(1)* 10.4 Contract of Sale, dated June 9, 1987, between The Frost National Bank of San Antonio and Tower Investors, Ltd. for the sale of the Frost Bank Tower (1987 Form 10-K, Exhibit 10.10)(3) 10.5 Master Lease, dated June 9, 1987, between The Frost National Bank of San Antonio and Tower Investments, Ltd. for the lease of the Frost Bank Tower (1987 Form 10-K, Exhibit 10.11)(3) 10.6 Agreement dated September 30, 1988, among Electronic Data Systems Corporation, The Frost National Bank of San Antonio and Cullen/Frost Bankers, Inc. for the sale of rights to revenues of data processing services (1988 Form 10-K, Exhibit 10.12)(5) 10.7 Form of Revised Change-In-Control Agreements with four Executive Officers (1989 Form 10-K, Exhibit 10.13(a))(9)* 10.8 1988 Non-qualified Stock Option Plan (1989 Form S-8, Exhibit 4(g))(8) 10.9 The 401(k) Stock Purchase Plan for Employees of Cullen/Frost Bankers, Inc. and its Affiliates (1990 Form S-8, Exhibit 4(g))(10)* 10.10 1991 Thrift Incentive Stock Purchase Plan for Employees of Cullen/Frost Bankers, Inc. and its Affiliates (1991 Form S-8, Exhibit 4(g))(11)* 10.11 Cullen/Frost Bankers, Inc. Restricted Stock Plan (1992 Form S-8, Exhibit 4(d))(12)* 10.12 Cullen/Frost Bankers, Inc. 1992 Stock Plan (1992 Form S-8, Exhibit 4(d))(13) 10.13 Cullen/Frost Bankers, Inc. Supplemental Executive Retirement Plan 10.14 Form of Revised Change-In-Control Agreements with one Executive Officer 11 Statement re: computation of earnings per share 13 The Cullen/Frost 1994 Annual Report to Shareholders for the Year Ended December 31, 1994, (furnished for the information of the Commission and not deemed to be "filed" except for the portion expressly incorporated by reference) 11 19.1 The financial statements and exhibits required by Form 11-K with respect to the 1991 Thrift Incentive Stock Purchase Plan for Employees of Cullen/Frost Bankers, Inc. for the fiscal years ended December 31, 1994 and 1993 (filed pursuant to Rule 15d-21 of the Securities and Exchange Act of 1934) 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, 1994 and 1993 (filed pursuant to Rule 15d-21 of the Securities and Exchange Act of 1934) 21 Subsidiaries of Cullen/Frost 23.1 Consent of Independent Auditors 23.2 Consent of Independent Auditors with respect to Form 11-K for the 1991 Thrift Incentive Stock Purchase Plan. 23.3 Consent of Independent Auditors with respect to Form 10-K as amended by this Form 10-K/A for the 401(k) Stock Purchase Plan. 24 Power of Attorney * 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, 1994. ______________________ (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, 1984 (File No. 0-7275) (2) Incorporated herein by reference to the designated Exhibits to Cullen/Frost's Report on Form S-8 filed December 18, 1985 (File No. 33-2271) (3) Incorporated herein by reference to the designated Exhibits to the Cullen/Frost Annual Report on Form 10-K for the Year Ended December 31, 1987 (File No. 0-7275) (4) Incorporated herein by reference to the designated Exhibits to Cullen/Frost's Report on Form S-8 filed June 24, 1988 (File No. 33-22758) (5) 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) (6) Incorporated herein by reference to the designated Exhibits to Cullen/Frost's Current Report on Form 8-K dated July 25, 1989 (File No. 0-7275) (7) 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) (8) 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) (9) 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) (10) 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) (11) 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) (12) 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) (13) Incorporated herein by reference to the designated Exhibits to Cullen/Frost's Report on Form S-8 filed October 23, 1992 (File No. 33-53622) (14) Incorporated herein by reference to the designated Exhibits to Cullen/Frost's Current Report on Form 8-K dated August 26, 1993 (File No. 0-7275) (15) To be filed as an amendment. 12 EXHIBIT INDEX TO FORM 10-K/A Exhibit Number Description of Exhibits - ------------------------------------------ 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, 1994 and 1993 (filed pursuant to Rule 15d-21 of the Securities and Exchange Act of 1934) 23.3 Consent of Independent Auditors with respect to Form 10-K as amended by this Form 10-K/A for the 401(k) Stock Purchase Plan. EX-19.2 2 401(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, 1994 and 1993 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, 1994 and 1993 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, 1994 and 1993 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 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, 1994 and 1993, 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, 1994 and 1993, 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, 1994, and reportable transactions for the year then ended are presented for purposes of complying with the Department of Labor's 1 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 1994 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1994 financial statements taken as a whole. /s/ Ernst & Young LLP May 30, 1995 2 401(k) Stock Purchase Plan for the Employees of Cullen/Frost Bankers, Inc. and Its Affiliates Statements of Net Assets Available for Benefits December 31 1994 1993 ------------------------------ Assets Investments, at fair value: Common stock of Cullen/Frost Bankers, Inc. $ 23,503,254 $ 28,015,748 Money market fund 2,236,263 1,582,029 Receivables: Employer contributions 37,269 53,949 Participants' contributions 85,795 124,357 Interest 9,865 4,046 Cash - 184,935 Participant loans 2,785,227 2,443,302 ---------------------------- Total assets 28,657,673 32,408,366 Liabilities Notes payable to Cullen/Frost Bankers, Inc. - 170,000 Accrued interest and other liabilities - 1,621 ------------------------------ Total liabilities - 171,621 ------------------------------ Net assets available for benefits $ 28,657,673 $ 32,236,745 ============================== See accompanying notes. 3 401(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 1994 1993 ---------------------------- Additions to net assets attributed to: Investment activities: Gain on sale or distribution of Cullen/Frost Bankers, Inc. common stock $ 2,174,473 $ 2,343,762 Interest 89,898 42,310 Dividends 514,767 3,134,833 Net unrealized (depreciation) appreciation in fair value of Cullen/Frost Bankers, Inc. common stock (5,374,794) 563,919 ---------------------------- (2,595,656) 6,084,824 Contributions: Employer 942,670 1,053,130 Participants 2,619,126 2,285,759 ---------------------------- Total additions 966,140 9,423,713 Deductions from net assets attributed to: Benefits paid to terminated participants 4,538,887 3,566,963 Interest on notes payable 6,325 15,793 ---------------------------- Total deductions 4,545,212 3,582,756 ---------------------------- Net increase (decrease) (3,579,072) 5,840,957 Net assets available for benefits at beginning of year 32,236,745 26,395,788 ---------------------------- Net assets available for benefits at end of year $ 28,657,673 $ 32,236,745 ============================ See accompanying notes. 4 401(k) Stock Purchase Plan for the Employees of Cullen/Frost Bankers, Inc. and Its Affiliates Notes to Financial Statements December 31, 1994 and 1993 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), which is stated at fair value based on quoted market prices on the valuation date, and in a money market fund. Changes in fair market value are reflected in the statement of changes in net assets available for benefits as net unrealized appreciation (depreciation) in fair value of investments. Money market investments are valued at cost which approximates fair value. The historical cost of a specific security sold is used to compute gains and losses on the sale of investment securities. Administrative expenses of the Plan are paid by CFBI. 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. As of December 31, 1990, CFBI maintained the Employee Stock Ownership Plan for Employees of Cullen/Frost Bankers, Inc. and Its Affiliates (the ESOP). Effective January 1, 1991, the ESOP was amended as the Plan. All ESOP participants as of December 31, 1990 became 100% vested in their accounts as of January 1, 1991 with the inception of the Plan. General The Plan is a defined contribution plan qualified under Section 401(a) of the Internal Revenue Code and covers all employees scheduled to work 1,000 or more hours a year or, if not scheduled to work 1,000 hours, those employees who do actually work 1,000 hours in a year. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). 5 401(k) Stock Purchase Plan for the Employees of Cullen/Frost Bankers, Inc. and Its Affiliates Notes to Financial Statements (continued) December 31, 1994 and 1993 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 or money market funds. The first 6% of the participant's contribution must be invested in common stock of CFBI. Additional contributions above 6% can be invested in additional common stock of CFBI or in a money market fund. 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. As of December 31, 1994, there were approximately 43,700 forfeited shares available for use. 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, or upon death or disability. 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 6 401(k) Stock Purchase Plan for the Employees of Cullen/Frost Bankers, Inc. and Its Affiliates Notes to Financial Statements (continued) December 31, 1994 and 1993 2. Description of the Plan (continued) 1-5 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 monthly payroll deductions. Subject to 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) ESOP 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) ESOP 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, 1994 there were 34 terminated participants in the Plan entitled to aggregate vested benefits totaling 15,939.2654 shares of CFBI common stock, or $492,125, applying the fair market value of the stock of $30.875 per share at December 31, 1994. The actual distribution of these benefits, in the form of stock and cash, will occur subsequent to December 31, 1994 at the $30.875 per share market price for those participants electing their distributions in cash, and at the per share market price as of the distribution date subsequent to year-end for those participants electing their distributions in shares. At December 31, 1993, there were 68 terminated participants entitled to aggregate vested benefits totaling 20,850.6325 shares of CFBI common stock. 7 401(k) Stock Purchase Plan for the Employees of Cullen/Frost Bankers, Inc. and Its Affiliates Notes to Financial Statements (continued) December 31, 1994 and 1993 4. Notes Payable to Cullen/Frost Bankers, Inc. During 1988, the Board of Directors of CFBI authorized the borrowing of up to $1,000,000 for the purpose of buying additional shares through the ESOP. The ESOP borrowed $300,000 during 1988 and the remaining $700,000 during 1989 from CFBI. Interest at floating prime and principal payments of $50,000 are due quarterly through November 1, 1994. The notes were paid off on November 1, 1994 and all collateral released. 5. Form 5500 The Department of Labor requires that the realized gains and losses from securities transactions reflected in Form 5500 be calculated as the difference between the proceeds of securities sold and the fair market value of those securities at the beginning of the year (or purchase price if acquired during the year of sale). Under generally accepted accounting principles (GAAP), realized gains and losses are calculated on the difference between the sales proceeds and the historical cost. The following schedule shows the amounts reflected in the accompanying GAAP financial statements, compared to the amounts in the Form 5500, as of and for the years ended December 31, 1994 and 1993: GAAP Financial Statements Form 5500 -------------------------------- Year Ended December 31, 1994 Realized gain $ 2,174,473 $ 136,864 Net unrealized (depreciation) in fair value (5,374,794) (3,337,185) Year Ended December 31, 1993 Realized gain 2,343,762 272,894 Net unrealized appreciation in fair value 563,919 2,634,787 8 401(k) Stock Purchase Plan for the Employees of Cullen/Frost Bankers, Inc. and Its Affiliates Notes to Financial Statements (continued) December 31, 1994 and 1993 5. Form 5500 (continued) The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500: December 31 1994 1993 ----------------------------- Net assets available for benefits per the financial statements $ 28,657,673 $ 32,236,745 Amounts allocated to withdrawing participants (492,125) (734,985) ----------------------------- Net assets available for benefits per the Form 5500 $ 28,165,548 $ 31,501,760 ============================= The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500: Year Ended December 31 1994 1993 ----------------------------- Benefits paid to participants per the financial statements $ 4,538,887 $ 3,566,963 Add amounts allocated to withdrawing participants at the end of the year 492,125 734,985 Less amounts allocated to withdrawing participants at the end of the prior year (734,985) (465,237) ----------------------------- Benefits paid to participants per the Form 5500 $ 4,296,027 $ 3,836,711 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. 9 401(k) Stock Purchase Plan for the Employees of Cullen/Frost Bankers, Inc. and Its Affiliates Notes to Financial Statements (continued) December 31, 1994 and 1993 6. Income Tax Status The plan administrator is in the process of obtaining a determination letter from the Internal Revenue Service of the Plan's qualification under Internal Revenue Code (IRC) Section 401(a). The current determination letter is dated June 6, 1989. The Plan was amended during 1993. It is anticipated that the Plan qualifies under 401(a) Section of the IRC and is, therefore, not subject to tax under present income tax laws. 7. Stock Dividend On March 2, 1993, Cullen/Frost Bankers, Inc. paid a 10% stock dividend. As a result, the Plan was issued 78,861 of additional shares of Cullen/Frost Bankers, Inc. common stock. The stock dividend is included in dividends in the 1993 statement of changes in net assets available for benefits based on the March 2, 1993 closing price of $38.25. 8.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: Cullen/Frost Bankers, Inc. Money Common Stock Market Loan Fund Fund Fund Total ------------------------------------------- Additions to net assets attributed to: Gain on sale or distribution of Cullen/Frost Bankers, Inc. common stock $ 2,174,473 $ - $ - $ 2,174,473 Interest 12,545 77,353 - 89,898 Dividends 514,767 - - 514,767 Net unrealized depreciation in fair value of Cullen/Frost Bankers, Inc. common stock (5,374,794) - - (5,374,794) Investment election transfer (400,725) 400,725 - - Contributions: Employer 942,670 - - 942,670 Participants 2,232,464 386,662 - 2,619,126 Loan withdrawals (2,179,911) (365,963) 2,545,874 - ------------------------------------------- Total additions (2,078,511) 498,777 2,545,874 966,140 10 401(k) Stock Purchase Plan for the Employees of Cullen/Frost Bankers, Inc. and Its Affiliates Notes to Financial Statements (continued) December 31, 1994 and 1993 8.Statement of Changes in Net Assets Available for Benefits Segregated by Participant Directed Investment Type (continued) Cullen/Frost Bankers, Inc. Money Common Stock Market Fund Fund Fund Total ------------------------------------------------ Deductions to net assets attributed to: Benefits paid to terminated participants $ 4,393,288 $ 145,599 $ - $ 4,538,887 Interest on notes payable 6,325 - - 6,325 Loan interest and principal (1,970,045) (233,904) 2,203,949 - ----------------------------------------------- Total deductions 2,429,568 (88,305) 2,203,949 4,545,212 ----------------------------------------------- Net increase (decrease) (4,508,079) 587,082 341,925 (3,579,072) Net assets available for benefits at beginning of year 28,128,475 1,664,968 2,443,302 32,236,745 ----------------------------------------------- Net assets available for benefits at end of year $23,620,396 $2,252,050 $2,785,227 $28,657,673 =============================================== 11 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, 1994 Description of Investment, Including Identity of Issue, Maturity Date, Rate of Borrower, Lessor, Interest, Collateral, Par Current or Similar Party or Maturity Date Cost Value - ------------------------------------------------------------------------------ Common stock of Cullen/ Frost Bankers, Inc. 761,239 shares $14,462,632 $ 23,503,254 Short-Term Prime Portfolio - I Money market deposit account, variable interest, available upon demand 2,236,263 2,236,263 Participant loans Interest accrued at Frost National Bank prime rate, varying maturity dates, 6% - 8.5% charged during 1994 2,785,227 2,785,227 12 401(k) Stock Purchase Plan for the Employees of Cullen/Frost Bankers, Inc. and Its Affiliates
Item 27d - Schedule of Reportable Transactions(1) Year Ended December 31, 1994 Description of Asset (Including Expense Current Value Interest Rate and Incurred of Asset on Identity of Maturity in Case Purchase Selling Lease With Cost of Transaction Net Gain Party Involved of a Loan) Price Price Rental Transaction Asset Date or (Loss) - -------------------------------------------------------------------------------------------------------------------------------- Category (iii) - Series of Securities Transactions Short-Term Investment Company Prime Portfolio - I $7,730,870 principal amount, short-term investment fund $7,730,870 $ - $ - $ - $7,730,870 $7,730,870 $ - Short-Term Investment Company Prime Portfolio - I $7,076,636 principal amount, short-term investment fund - 7,076,636 - - 7,076,636 7,076,636 - Common stock: Cullen/Frost Bankers, Inc. 31,081 shares - 1,114,271 - - 438,751 1,114,271 675,520 Cullen/Frost Bankers, Inc. 65,079 shares (2) - 2,412,232 - - 913,279 2,412,232 1,498,953 Cullen/Frost Bankers, Inc. 62,626 shares 2,214,330 - - - 2,214,330 2,214,330 - There were no Category (i), (ii), or (iv) transactions during the year ended December 31, 1994. (1) Reportable transactions consist of transactions or series of transactions in excess of 5% of the current value of plan assets at the beginning of year. (2) Shares distributed to terminated participants.
13 EX-23.3 3 CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23.3 Consent of Independent Auditors with respect to Form 10-K as amended by this 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., the Registration Statement (Form S-8 No. 33-53492) pertaining to the Cullen/Frost Bankers, Inc. Restricted Stock Plan, and the Registration Statement (Form S-8 No. 33-53622) pertaining to the Cullen/Frost Bankers, Inc. 1992 Stock Plan, of our report dated May 30, 1995, 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, 1994. ERNST & YOUNG LLP San Antonio, Texas June 27, 1995 -----END PRIVACY-ENHANCED MESSAGE-----