With total consolidated assets of $16.3 billion^[1], Cullen/Frost Bankers (NYSE:CFR) is the 5th largest bank and financial holding company in Texas, behind J P Morgan Chase, Bank of America, Wells Fargo and Banco Bilbao Vizcaya.^[2] The company's revenues come from two sources: a) interest on loans provided; and b) fees for services rendered. In 2009, Cullen/Frost Bankers had net interest income of $536 million and total non-interest income of $293.7 million^[3] In addition to the company's wholly-owned commercial and consumer banking subsidiary called Frost Bank, Cullen/Frost Bankers also has subsidiaries in the insurance, brokerage and securities industries. However, virtually all of its net income comes from its banking segment.^[4]

The company's primary source of funds are deposits, of which 65.7% are interest bearing and 34.3% are non-interest bearing.^[5] As of 31 December 2008, 55.1% of these funds were invested in loans and 27.1% in securities like treasuries and bonds.^[5] This compares to its 2008 levels of 60.7% and 24.3% respectively, demonstrating that Cullen Frost Bankers has become more conservative with their lending, choosing instead to put a higher percentage of its deposits into U.S. Treasuries. Unlike its competitors, Cullen/Frost Bankers isn't geographically diversified and operates exclusively in the state of Texas. As a result, economic conditions in this state and the United States as a whole significantly impact demand for the company's products and services, sources of funding and the ability of its customers to repay loans.^[6]

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