At Cullen/Frost, a 3Q Sales Slump Calls the Bank to Action

Cullen/Frost Bankers, the $21.8 billion holding company for Frost Bank, has sounded the sales alarm after lending demand began slumping last quarter.

Company officials said during the bank’s earnings call yesterday that loan requests from its customers started to fall off. But rather than just accept lower volume, “our relationship managers quickly increased their calling efforts on prospects,” said Richard W. Evans, the bank’s chairman and chief executive.

The effort has yet to pay off. While the bank has “adjusted to focus more on prospects,” the additional loan production has yet to materialize.

“Obviously, it’s a longer process to increase outstandings,” Evans said.

Overall, the bank’s portfolio of outstandings continued to grow, however. By the end of the third quarter, the bank had $8.6 billion of loans in its portfolio, an increase of $599 million, or 7.5 percent, compared to the $8.0 billion reported for the third quarter a year earlier.

Cullen/Frost did not disclose just how many loan requests it received last quarter or what was the rate of decline in loan requests. But there was a hint to the results of its sales efforts:

“Even with this volatility, Frost entered the fourth quarter with an all-time high loan pipeline,” Evans said.

What is interesting about this development out of Cullen/Frost is that it counters a conventional wisdom about banks — that they are not sales oriented. Clearly, Cullen/Frost is. The bank was monitoring its production pipeline and realized it was going to be short loans in forthcoming quarters. Yet, the the bank was able to pivot within the quarter and ramp up its sales effort. Cullen/Frost deserves commendation for that.

Cullen/Frost [ticker: CFR] has a market capitalization of $3.38 billion.

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JJ is the Executive Editor & Publisher of Bank Innovation and CEO of Royal Media, its parent company. He can be reached at or 212-564-8972.

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