San Antonio, Texas-based Cullen/Frost Bankers, Inc. (CFR), Wednesday said its second-quarter net income declined from the same quarter a year ago, hurt by an increase in non-interest expenses. The increase in expenses stemmed from FDIC special assessment charges. Quarterly earnings were also negatively impacted by an increase in provision for loan loses.
Cullen/Frost Bankers' net income for the second quarter declined to $37.9 million, or $0.63 per share, from $52.55 million or $0.89 per share in the same quarter a year ago. On average, 13 analysts polled by Thomson Reuters expected second-quarter earnings of $0.73 per share. Analysts' estimates typically exclude special items.
Quarterly net income was negatively impacted by a 13.5% increase in non-interest expenses to $136.3 million from $120.1 million in the same quarter a year ago. The increase in non interest expenses for the second quarter is related to an increase in FDIC insurance expense of about $11.0 million from the same quarter a year ago, due to FDIC special assessment charges of about $7.3 million incured during the quarter. For the quarter, the company recorded a higher provision for loan loses to $16.601 million from $6.328 million in the same quarter a year ago.
Net interest income for the second quarter increased to $134.46 million from $131.33 million from the same quarter a year ago, while quarterly non-interest income dropped to $68 million from $70.58 million in the same quarter last year. Quarterly revenues were below Street revenue estimate of $210.23 million.
Other income for the second quarter came in at $12.5 million down from $13.5 million in the same quarter a a year ago, due to fewer gains on the sale of student loans.
For the six-month period net income declined to $82.8 million or $1.39 per share from $105.3 million or $1.78 per share in the corresponding period a year ago.
For the period, net interest income on a taxable equivalent basis increased to $282.058 million from $270.991 million in the same period last year, while non-interest income dropped to $137.870 million from $140.809 million in the previous year.
CFR is currently trading at $44.67, down $2.65 or 5.60%, on a volume of 1.027 million shares on the NYSE.
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