Frost Bank

Early years

Frost Bank was founded in 1868 as a mercantile partnership in San Antonio by Thomas Claiborne Frost, who had served as a lieutenant colonel in the Confederate States Army. In February 1899, it was chartered as a national banking association. That year, the bank also reached $1 million in deposits (worth about $39 million in 2026 dollars). The bank survived the Panic of 1907 with the aid of an association of local banks and by 1921, sold shares to outside investors for the first time. Frost continued to grow with the construction of a 12-story building in 1921, which was one of the tallest buildings in Texas at the time. By 1926, Joseph Hardin Frost, brother of T.C. Frost Jr., took over as president of the company.

Growth

Over the years, Frost has grown both organically and through the acquisition of other banks, beginning in 1928 with the purchase of Lockwood National Bank. In 1977, the company merged with Cullen Bankers, Inc. of Houston forming Cullen/Frost Bankers, Inc. and its stock began trading on the NASDAQ.

In 1982, Cullen/Frost Bankers and United States National Bancshares, Inc. (USNB) of Galveston, Texas merged, but Frost operated USNB separately for nearly two decades. As new financial services legislation allowed banks to broaden the services they offered customers, Cullen/Frost folded the USNB charter into Frost's in 2000. With this action, the last bank using the federally forbidden United States National Bank title ceased to exist.

In 1983, the bank announced it intended to merge with First City Bancorp of Houston, Texas, however the merger was never completed. First City was subsequently rescued by the FDIC in 1988 and ultimately declared bankruptcy in 1992 before being absorbed by other institutions, namely Texas Commerce Bank (now Chase).

In 1999, Frost Bank acquired Commerce Financial Corp. and Frost Insurance Agency, a subsidiary of the bank acquired Professional Insurance Agents Inc.

In 2005-2006, the company acquired Alamo Bank of Texas, Horizon Capital Bank, Summit Bancshares Inc., and Texas Community Bank. In 2014, it acquired Western National Bank.

Industry changes

During the 2008 financial crisis, the bank did not accept government assistance via the Troubled Asset Relief Program. Faced with changes in the financial services industry, the bank converted its 113-year-old federal charter into a state charter in June 2012.

Post Financial Crisis

Having fared well during the financial crisis, the company was able to invest in technology at a time when many institutions were forced to cut back on investment in infrastructure. Texas was affected less severely than other states because of liberal land use policies that kept land prices low relative to more restrictive states such as California and Florida.