SECURITIES AND EXCHANGE COMMISSION
                  Washington, D.C. 20549

                         ____________

                            FORM 8-K

                         CURRENT REPORT

              Pursuant to Section 13 or 15(d) of the

                Securities Exchange Act of 1934 
                    _______________________

                Date of Report (Date of earliest 
                 event reported) January 26, 1999 


     Texas                   0-7275                74-1751768
-------------          -------------------      ---------------
(State of           (Commission File Number)       (IRS Employer
 incorporation)                                 Identification No.)


            P.O. Box 1600
            100 West Houston St.
            San Antonio, Texas                     78296-1400
----------------------------------------         ---------------
(Address of principal executive offices)           (Zip Code)


                         (210) 220-4011         
                -------------------------------
                (Registrant's telephone number,
                  including area code)

                               N/A
   -------------------------------------------------------------
   (Former name or former address, if changed since last report)

<PAGE>

Items 1-4. Not Applicable.

Item 5.    Other Events.
           ------------

     On January 26, 1999, the Board of Directors of 
Cullen/Frost Bankers, Inc., a Texas corporation (the 
"Company"), declared a dividend payable March 15, 1999 (the 
"Payment Time") of one right (a "Right") for each 
outstanding share of common stock, par value $0.01 per share 
("Common Stock"), of the Company held of record at the close 
of business on February 8, 1999 (the "Record Time"), or 
issued thereafter and prior to the Separation Time (as 
hereinafter defined) and thereafter pursuant to options and 
convertible securities outstanding at the Separation Time.  
The Rights will be issued pursuant to a Shareholder 
Protection Rights Agreement, dated as of January 26, 1999 
(the "Rights Agreement"), between the Company and 
Cullen/Frost National Bank, as Rights Agent (the "Rights 
Agent").  Each Right entitles its registered holder to 
purchase from the Company, after the Separation Time, one 
one-hundredth of a share of Junior Participating Preferred 
Stock, par value $0.01 per share ("Participating Preferred 
Stock"), for $200 (the "Exercise Price"), subject to 
adjustment.

     The Rights will be evidenced by the Common Stock 
certificates until the close of business on the earlier of 
(either, the "Separation Time") (i) the tenth business day 
(or such later date as the Board of Directors of the Company 
may from time to time fix by resolution adopted prior to the 
Separation Time that would otherwise have occurred) after 
the date on which any Person (as defined in the Rights 
Agreement) commences a tender or exchange offer which, if 
consummated, would result in such Person's becoming an 
Acquiring Person, as defined below, and (ii) the tenth day 
(the "Flip-in Date") after the first date (or such earlier 
or later date as the Board of Directors of Cullen/Frost 
Bankers, Inc. may from time to time fix) of public 
announcement by the Company that any Person has become an 
Acquiring Person (the date of such public announcement 
being, the "Stock Acquisition Date"); provided that if the
                                      --------
foregoing results in the Separation Time being prior to the 
Payment Time, the Separation Time shall be the Payment Time; 
and provided further that if a tender or exchange offer 
    ----------------
referred to in clause (i) is cancelled, terminated or 
otherwise withdrawn prior to the Separation Time without the 
purchase of any shares of stock pursuant thereto, such offer 

                       Page 2 of 9
<PAGE>

shall be deemed never to have been made.  An Acquiring 
Person is any Person having Beneficial Ownership (as defined 
in the Rights Agreement) of 10% or more of the outstanding 
shares of Common Stock, which term shall not include (i) the 
Company, any wholly-owned subsidiary of the Company or any 
employee stock ownership or other employee benefit plan of 
the Company, (ii) any person who is the Beneficial Owner of 
10% or more of the outstanding Common Stock as of the date 
of the Rights Agreement or who shall become the Beneficial 
Owner of 10% or more of the outstanding Common Stock solely 
as a result of an acquisition of Common Stock by the 
Company, until such time as such Person acquires additional 
Common Stock, other than through a dividend or stock split, 
(iii) any Person who becomes the Beneficial Owner of 10% or 
more of the outstanding Common Stock without any plan or 
intent to seek or affect control of the Company if such 
Person promptly divests sufficient securities such that such 
10% or greater Beneficial Ownership ceases or (iv) any 
Person who Beneficially Owns shares of Common Stock 
consisting solely of (A) shares acquired pursuant to the 
grant or exercise of an option granted by the Company in 
connection with an agreement to merge with, or acquire, the 
Company entered into prior to a Flip-in Date, (B) shares 
owned by such Person and its Affiliates and Associates at 
the time of such grant, (C) shares, amounting to less than 
1% of the outstanding Common Stock, acquired by Affiliates 
and Associates of such Person after the time of such grant 
and (D) shares of Common Stock (or securities convertible 
into, exchangeable into or exercisable for Common Stock) 
which are held by such Person in trust accounts, managed 
accounts and the like or otherwise held in a fiduciary 
capacity, that are Beneficially Owned by third persons who 
are not Affiliates or Associates of such Person or acting 
together with such Person to hold such shares, or which are 
held by such Person in respect of a debt previously 
contracted.  The Rights Agreement provides that, until the 
Separation Time, the Rights will be transferred with and 
only with the Common Stock.  Common Stock certificates 
issued after the Payment Time but prior to the Separation 
Time shall evidence one Right for each share of Common Stock 
represented thereby and shall contain a legend incorporating 
by reference the terms of the Rights Agreement (as such may 
be amended from time to time).  Notwithstanding the absence 
of the aforementioned legend, certificates evidencing shares 
of Common Stock outstanding at the Payment Time shall also 
evidence one Right for each share of Common Stock evidenced 
thereby.  Promptly following the Separation Time, separate 
certificates evidencing the Rights ("Rights Certificates") 

                        Page 3 of 9
<PAGE>

will be mailed to holders of record of Common Stock at the 
Separation Time.

     The Rights will not be exercisable until the Business 
Day (as defined in the Rights Agreement) following the 
Separation Time and will become exercisable only upon the 
expiration or redemption of the Company's presently 
outstanding rights (which are scheduled to expire on July 
25, 1999).  The Rights will expire on the earliest of (i) 
the Exchange Time (as defined below), (ii) the close of 
business on February 8, 2009, and (iii) the date on which 
the Rights are redeemed as described below (in any such 
case, the "Expiration Time").

     The Exercise Price and the number of Rights 
outstanding, or in certain circumstances the securities 
purchasable upon exercise of the Rights, are subject to 
adjustment from time to time to prevent dilution in the 
event of a Common Stock dividend on, or a subdivision or a 
combination into a smaller number of shares of, Common 
Stock, or the issuance or distribution of any securities or 
assets in respect of, in lieu of or in exchange for Common 
Stock.  

     In the event that prior to the Expiration Time a Flip-
in Date occurs, the Company shall take such action as shall 
be necessary to ensure and provide, to the extent permitted 
by applicable law, that each Right (other than Rights 
Beneficially Owned by the Acquiring Person or any affiliate 
or associate thereof, which Rights shall become void) shall 
constitute the right to purchase from the Company, upon the 
exercise thereof in accordance with the terms of the Rights 
Agreement, that number of shares of Common Stock of the 
Company having an aggregate Market Price (as defined in the 
Rights Agreement), on the Stock Acquisition Date that gave 
rise to the Flip-in Date, equal to twice the Exercise Price 
for an amount in cash equal to the then current Exercise 
Price.  In addition, the Board of Directors of the Company 
may, at its option, at any time after a Flip-in Date and 
prior to the time that an Acquiring Person becomes the 
Beneficial Owner of more than 50% of the outstanding shares 
of Common Stock, elect to exchange all (but not less than 
all) the then outstanding Rights (other than Rights 
Beneficially Owned by the Acquiring Person or any affiliate 
or associate thereof, which Rights become void) for shares 
of Common Stock at an exchange ratio of one share of Common 
Stock per Right, appropriately adjusted to reflect any stock 
split, stock dividend or similar 

                        Page 4 of 9
<PAGE>

transaction occurring after the date of the Separation Time 
(the "Exchange Ratio").  Immediately upon such action by the 
Board of Directors (the "Exchange Time"), the right to 
exercise the Rights will terminate and each Right will 
thereafter represent only the right to receive a number of 
shares of Common Stock equal to the Exchange Ratio.  

     Whenever the Company shall become obligated, as 
described in the preceding paragraph, to issue shares of 
Common Stock upon exercise of or in exchange for Rights, the 
Company, at its option, may substitute therefor shares of 
Participating Preferred Stock, at a ratio of one one-
hundredth of a share of Participating Preferred Stock for 
each share of Common Stock so issuable.

     In the event that prior to the Expiration Time the 
Company enters into, consummates or permits to occur a 
transaction or series of transactions after the time an 
Acquiring Person has become such in which, directly or 
indirectly, (i) the Company shall consolidate or merge or 
participate in a binding share exchange with any other 
Person if, at the time of the consolidation, merger or share 
exchange or at the time the Company enters into an agreement 
with respect to such consolidation, merger or share 
exchange, the Acquiring Person controls the Board of 
Directors of the Company and (A) any term of or arrangement 
concerning the treatment of shares of capital stock in such 
merger, consolidation or share exchange relating to the 
Acquiring Person is not identical to the terms and 
arrangements relating to other holders of Common Stock or 
(B) the Person with whom such transaction or series of 
transactions occurs is the Acquiring Person or an Affiliate 
or Associate thereof, (ii) the Company shall sell or 
otherwise transfer (or one or more of its subsidiaries shall 
sell or otherwise transfer) assets (A) aggregating more than 
50% of the assets (measured by either book value or fair 
market value) or (B) generating more than 50% of the 
operating income or cash flow, of the Company and its 
subsidiaries (taken as a whole) to any other Person (other 
than the Company or one or more of its wholly owned 
subsidiaries) or to two or more such Persons which are 
affiliated or otherwise acting in concert, if, at the time 
of such sale or transfer of assets or at the time the 
Company (or any such subsidiary) enters into an agreement 
with respect to such sale or transfer, the Acquiring Person 
controls the Board of Directors of the Company or (iii) any 
Acquiring Person shall (A) sell, purchase, lease, exchange, 

                          Page 5 of 9
<PAGE>

mortgage, pledge, transfer or otherwise acquire or dispose 
of, to, from, or with, as the case may be, the Company or 
any of its Subsidiaries, over any period of 12 consecutive 
calendar months, assets (x) having an aggregate fair market 
value of more than $15,000,000 or (y) on terms and 
conditions less favorable to the Company than the Company 
would be able to obtain through arm's-length negotiations 
with an unaffiliated third party, (B) receive any 
compensation for services from the Company or any of its 
subsidiaries, other than compensation for full-time 
employment as a regular employee at rates in accordance with 
the Company's (or its subsidiaries') past practices, (C) 
receive the benefit, directly or indirectly (except 
proportionately as a stockholder), over any period of 12 
consecutive calendar months, of any loans, advances, 
guarantees, pledges, insurance, reinsurance or other 
financial assistance or any tax credits or other tax 
advantage provided by the Company or any of its subsidiaries 
involving an aggregate principal amount in excess of 
$5,000,000 or an aggregate cost or transfer of benefits from 
the Company or any of its subsidiaries in excess of 
$5,000,000 or, in any case, on terms and conditions less 
favorable to the Company than the Company would be able to 
obtain through arm's-length negotiations with a third party, 
or (D) increase by more than 1% its proportionate share of 
the outstanding shares of any class of equity securities or 
securities convertible into any class of equity securities 
of the Company or any of its subsidiaries as a result of any 
acquisition from the company (with or without 
consideration), any reclassification of securities 
(including any reverse stock split), or recapitalization, of 
the Company, or any merger or consolidation of the Company 
with any of its subsidiaries or any other transaction or 
series of transactions (whether or not with or into or 
otherwise involving an Acquiring Person), (a "Flip-over 
Transaction or Event"), the Company shall take such action 
as shall be necessary to ensure, and shall not enter into, 
consummate or permit to occur such Flip-over Transaction or 
Event until it shall have entered into a supplemental 
agreement with the Person engaging in such Flip-over 
Transaction or Event or the parent corporation thereof (the 
"Flip-over Entity"), for the benefit of the holders of the 
Rights, providing, that upon consummation or occurrence of 
the Flip-over Transaction or Event (i) each Right shall 
thereafter constitute the right to purchase from the Flip-
over Entity, upon exercise thereof in accordance with the 
terms of the Rights Agreement, that number of shares of 
common stock of the Flip-over Entity having an aggregate 
Market Price on the date of consummation

                       Page 6 of 9

<PAGE>

or occurrence of such Flip-over Transaction or Event equal 
to twice the Exercise Price for an amount in cash equal to 
the then current Exercise Price and (ii) the Flip-over 
Entity shall thereafter be liable for, and shall assume, by 
virtue of such Flip-over Transaction or Event and such 
supplemental agreement, all the obligations and duties of 
the Company pursuant to the Rights Agreement.  For purposes 
of the foregoing description, the term "Acquiring Person" 
shall include any Acquiring Person and its Affiliates and 
Associates counted together as a single Person.

     The Board of Directors of the Company may, at its 
option, at any time prior to the close of business on the 
Flip-in Date, redeem all (but not less than all) the then 
outstanding Rights at a price of $.01 per Right) (the 
"Redemption Price"), as provided in the Rights Agreement.  
Immediately upon the action of the Board of Directors of the 
Company electing to redeem the Rights, without any further 
action and without any notice, the right to exercise the 
Rights will terminate and each Right will thereafter 
represent only the right to receive the Redemption Price in 
cash for each Right so held.  

     The holders of Rights will, solely by reason of their 
ownership of Rights, have no rights as stockholders of the 
Company, including, without limitation, the right to vote or 
to receive dividends.

     The Rights will not prevent a takeover of the Company.  
However, the Rights may cause substantial dilution to a 
person or group that acquires 10% or more of the Common 
Stock unless the Rights are first redeemed by the Board of 
Directors of the Company.  Nevertheless, the Rights should 
not interfere with a transaction that is in the best 
interests of the Company and its stockholders because the 
Rights can be redeemed on or prior to the close of business 
on the Flip-in Date, before the consummation of such 
transaction.

     As of January 26, 1999 there were 26,719,488 shares of 
Common Stock issued (of which 26,718,488 shares were 
outstanding and 0 shares were held in treasury) and 2,651,854
shares reserved for issuance pursuant to employee benefit plans.
As long as the Rights are attached to the Common Stock, the
Company will issue one Right with each new share of Common Stock
so that all such shares will have Rights attached.

                            Page 7 of 9
<PAGE>

     The Rights Agreement (which includes as Exhibit A the 
forms of Rights Certificate and Election to Exercise and as 
Exhibit B the form of Junior Participating Preferred Stock) 
is attached hereto as an exhibit and is incorporated herein 
by reference.  The foregoing description of the Rights is 
qualified in its entirety by reference to the Rights 
Agreement and such exhibits thereto.

Item 6.      Not Applicable.

Item 7.      Exhibits.
             --------

    (4)      Rights Agreement, which includes as Exhibit A
             the forms of Rights Certificate and Election to
             Exercise and as Exhibit B the form of Statement
             of Resolution Establishing a Series of Shares
             of Junior Participating Preferred Stock.

    (99)     Press release, dated January 26, 1999, issued
             by the Company.

                          

                             Page 8 of 9

<PAGE>

                                SIGNATURE



	     Pursuant to the requirements of the Securities Exchange 
Act of 1934, the registrant has duly caused this report to 
be signed on its behalf by the undersigned thereunto duly 
authorized.

                                  CULLEN/FROST BANKERS, INC.



                                  By/s/Phillip D. Green
                                  --------------------------------------
                                  Name: Phillip D. Green
                                  Title: Senior Executive Vice President
                                         and Chief Financial Officer



Date: January 29, 1999

                              Page 9 of 9
<PAGE>

                              EXHIBIT INDEX
                              -------------

Exhibit
Number   Description                                         Method of Filing
-------  -------------------------------------------------   ----------------
 (4)     Rights Agreement, which includes as Exhibit A the   Filed herewith
         forms of Rights Certificate and Election to Exer-
         cise and as Exhibit B the form of Statement of
         Resolution Establishing a Series of Shares of 
         Junior Participating Preferred Stock.

(99)     Press release, dated January 26, 1999, issued by    Filed herewith
         the Company.
[{"type": "8-K", "sequence": "1", "description": "FORM 8-K SHAREHOLDERS PROTECTION RIGHTS AGREEMENT", "secsgml_size_bytes": 19516}]
{"company-data": {"conformed-name": "CULLEN FROST BANKERS INC", "cik": "0000039263", "assigned-sic": "6021", "irs-number": "741751768", "state-of-incorporation": "TX", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-13221", "film-number": "99517571"}, "business-address": {"street1": "100 W HOUSTON ST", "street2": "P O BOX 1600", "city": "SAN ANTONIO", "state": "TX", "zip": "78205", "phone": "2102204841"}, "former-company": {"former-conformed-name": "FROST BANK CORP", "date-changed": "19770823"}}
SECURITIES AND EXCHANGE COMMISSION
                  Washington, D.C. 20549

                         ____________

                            FORM 8-K

                         CURRENT REPORT

              Pursuant to Section 13 or 15(d) of the

                Securities Exchange Act of 1934 
                    _______________________

                Date of Report (Date of earliest 
                 event reported) January 26, 1999 

     Texas                   0-7275                74-1751768
-------------          -------------------      ---------------
(State of           (Commission File Number)       (IRS Employer
 incorporation)                                 Identification No.)

            P.O. Box 1600
            100 West Houston St.
            San Antonio, Texas                     78296-1400
----------------------------------------         ---------------
(Address of principal executive offices)           (Zip Code)

                         (210) 220-4011         
                -------------------------------
                (Registrant's telephone number,
                  including area code)

                               N/A
   -------------------------------------------------------------
   (Former name or former address, if changed since last report)
Items 1-4. Not Applicable.

Item 5.    Other Events.
           ------------

     On January 26, 1999, the Board of Directors of 
Cullen/Frost Bankers, Inc., a Texas corporation (the 
"Company"), declared a dividend payable March 15, 1999 (the 
"Payment Time") of one right (a "Right") for each 
outstanding share of common stock, par value $0.01 per share 
("Common Stock"), of the Company held of record at the close 
of business on February 8, 1999 (the "Record Time"), or 
issued thereafter and prior to the Separation Time (as 
hereinafter defined) and thereafter pursuant to options and 
convertible securities outstanding at the Separation Time.  
The Rights will be issued pursuant to a Shareholder 
Protection Rights Agreement, dated as of January 26, 1999 
(the "Rights Agreement"), between the Company and 
Cullen/Frost National Bank, as Rights Agent (the "Rights 
Agent").  Each Right entitles its registered holder to 
purchase from the Company, after the Separation Time, one 
one-hundredth of a share of Junior Participating Preferred 
Stock, par value $0.01 per share ("Participating Preferred 
Stock"), for $200 (the "Exercise Price"), subject to 
adjustment.

     The Rights will be evidenced by the Common Stock 
certificates until the close of business on the earlier of 
(either, the "Separation Time") (i) the tenth business day 
(or such later date as the Board of Directors of the Company 
may from time to time fix by resolution adopted prior to the 
Separation Time that would otherwise have occurred) after 
the date on which any Person (as defined in the Rights 
Agreement) commences a tender or exchange offer which, if 
consummated, would result in such Person's becoming an 
Acquiring Person, as defined below, and (ii) the tenth day 
(the "Flip-in Date") after the first date (or such earlier 
or later date as the Board of Directors of Cullen/Frost 
Bankers, Inc. may from time to time fix) of public 
announcement by the Company that any Person has become an 
Acquiring Person (the date of such public announcement 
being, the "Stock Acquisition Date"); provided that if the
                                      --------
foregoing results in the Separation Time being prior to the 
Payment Time, the Separation Time shall be the Payment Time; 
and provided further that if a tender or exchange offer 
    ----------------
referred to in clause (i) is cancelled, terminated or 
otherwise withdrawn prior to the Separation Time without the 
purchase of any shares of stock pursuant thereto, such offer 

                       Page 2 of 9
shall be deemed never to have been made.  An Acquiring 
Person is any Person having Beneficial Ownership (as defined 
in the Rights Agreement) of 10% or more of the outstanding 
shares of Common Stock, which term shall not include (i) the 
Company, any wholly-owned subsidiary of the Company or any 
employee stock ownership or other employee benefit plan of 
the Company, (ii) any person who is the Beneficial Owner of 
10% or more of the outstanding Common Stock as of the date 
of the Rights Agreement or who shall become the Beneficial 
Owner of 10% or more of the outstanding Common Stock solely 
as a result of an acquisition of Common Stock by the 
Company, until such time as such Person acquires additional 
Common Stock, other than through a dividend or stock split, 
(iii) any Person who becomes the Beneficial Owner of 10% or 
more of the outstanding Common Stock without any plan or 
intent to seek or affect control of the Company if such 
Person promptly divests sufficient securities such that such 
10% or greater Beneficial Ownership ceases or (iv) any 
Person who Beneficially Owns shares of Common Stock 
consisting solely of (A) shares acquired pursuant to the 
grant or exercise of an option granted by the Company in 
connection with an agreement to merge with, or acquire, the 
Company entered into prior to a Flip-in Date, (B) shares 
owned by such Person and its Affiliates and Associates at 
the time of such grant, (C) shares, amounting to less than 
1% of the outstanding Common Stock, acquired by Affiliates 
and Associates of such Person after the time of such grant 
and (D) shares of Common Stock (or securities convertible 
into, exchangeable into or exercisable for Common Stock) 
which are held by such Person in trust accounts, managed 
accounts and the like or otherwise held in a fiduciary 
capacity, that are Beneficially Owned by third persons who 
are not Affiliates or Associates of such Person or acting 
together with such Person to hold such shares, or which are 
held by such Person in respect of a debt previously 
contracted.  The Rights Agreement provides that, until the 
Separation Time, the Rights will be transferred with and 
only with the Common Stock.  Common Stock certificates 
issued after the Payment Time but prior to the Separation 
Time shall evidence one Right for each share of Common Stock 
represented thereby and shall contain a legend incorporating 
by reference the terms of the Rights Agreement (as such may 
be amended from time to time).  Notwithstanding the absence 
of the aforementioned legend, certificates evidencing shares 
of Common Stock outstanding at the Payment Time shall also 
evidence one Right for each share of Common Stock evidenced 
thereby.  Promptly following the Separation Time, separate 
certificates evidencing the Rights ("Rights Certificates") 

                        Page 3 of 9
will be mailed to holders of record of Common Stock at the 
Separation Time.

     The Rights will not be exercisable until the Business 
Day (as defined in the Rights Agreement) following the 
Separation Time and will become exercisable only upon the 
expiration or redemption of the Company's presently 
outstanding rights (which are scheduled to expire on July 
25, 1999).  The Rights will expire on the earliest of (i) 
the Exchange Time (as defined below), (ii) the close of 
business on February 8, 2009, and (iii) the date on which 
the Rights are redeemed as described below (in any such 
case, the "Expiration Time").

     The Exercise Price and the number of Rights 
outstanding, or in certain circumstances the securities 
purchasable upon exercise of the Rights, are subject to 
adjustment from time to time to prevent dilution in the 
event of a Common Stock dividend on, or a subdivision or a 
combination into a smaller number of shares of, Common 
Stock, or the issuance or distribution of any securities or 
assets in respect of, in lieu of or in exchange for Common 
Stock.  

     In the event that prior to the Expiration Time a Flip-
in Date occurs, the Company shall take such action as shall 
be necessary to ensure and provide, to the extent permitted 
by applicable law, that each Right (other than Rights 
Beneficially Owned by the Acquiring Person or any affiliate 
or associate thereof, which Rights shall become void) shall 
constitute the right to purchase from the Company, upon the 
exercise thereof in accordance with the terms of the Rights 
Agreement, that number of shares of Common Stock of the 
Company having an aggregate Market Price (as defined in the 
Rights Agreement), on the Stock Acquisition Date that gave 
rise to the Flip-in Date, equal to twice the Exercise Price 
for an amount in cash equal to the then current Exercise 
Price.  In addition, the Board of Directors of the Company 
may, at its option, at any time after a Flip-in Date and 
prior to the time that an Acquiring Person becomes the 
Beneficial Owner of more than 50% of the outstanding shares 
of Common Stock, elect to exchange all (but not less than 
all) the then outstanding Rights (other than Rights 
Beneficially Owned by the Acquiring Person or any affiliate 
or associate thereof, which Rights become void) for shares 
of Common Stock at an exchange ratio of one share of Common 
Stock per Right, appropriately adjusted to reflect any stock 
split, stock dividend or similar 

                        Page 4 of 9
transaction occurring after the date of the Separation Time 
(the "Exchange Ratio").  Immediately upon such action by the 
Board of Directors (the "Exchange Time"), the right to 
exercise the Rights will terminate and each Right will 
thereafter represent only the right to receive a number of 
shares of Common Stock equal to the Exchange Ratio.  

     Whenever the Company shall become obligated, as 
described in the preceding paragraph, to issue shares of 
Common Stock upon exercise of or in exchange for Rights, the 
Company, at its option, may substitute therefor shares of 
Participating Preferred Stock, at a ratio of one one-
hundredth of a share of Participating Preferred Stock for 
each share of Common Stock so issuable.

     In the event that prior to the Expiration Time the 
Company enters into, consummates or permits to occur a 
transaction or series of transactions after the time an 
Acquiring Person has become such in which, directly or 
indirectly, (i) the Company shall consolidate or merge or 
participate in a binding share exchange with any other 
Person if, at the time of the consolidation, merger or share 
exchange or at the time the Company enters into an agreement 
with respect to such consolidation, merger or share 
exchange, the Acquiring Person controls the Board of 
Directors of the Company and (A) any term of or arrangement 
concerning the treatment of shares of capital stock in such 
merger, consolidation or share exchange relating to the 
Acquiring Person is not identical to the terms and 
arrangements relating to other holders of Common Stock or 
(B) the Person with whom such transaction or series of 
transactions occurs is the Acquiring Person or an Affiliate 
or Associate thereof, (ii) the Company shall sell or 
otherwise transfer (or one or more of its subsidiaries shall 
sell or otherwise transfer) assets (A) aggregating more than 
50% of the assets (measured by either book value or fair 
market value) or (B) generating more than 50% of the 
operating income or cash flow, of the Company and its 
subsidiaries (taken as a whole) to any other Person (other 
than the Company or one or more of its wholly owned 
subsidiaries) or to two or more such Persons which are 
affiliated or otherwise acting in concert, if, at the time 
of such sale or transfer of assets or at the time the 
Company (or any such subsidiary) enters into an agreement 
with respect to such sale or transfer, the Acquiring Person 
controls the Board of Directors of the Company or (iii) any 
Acquiring Person shall (A) sell, purchase, lease, exchange, 

                          Page 5 of 9
mortgage, pledge, transfer or otherwise acquire or dispose 
of, to, from, or with, as the case may be, the Company or 
any of its Subsidiaries, over any period of 12 consecutive 
calendar months, assets (x) having an aggregate fair market 
value of more than $15,000,000 or (y) on terms and 
conditions less favorable to the Company than the Company 
would be able to obtain through arm's-length negotiations 
with an unaffiliated third party, (B) receive any 
compensation for services from the Company or any of its 
subsidiaries, other than compensation for full-time 
employment as a regular employee at rates in accordance with 
the Company's (or its subsidiaries') past practices, (C) 
receive the benefit, directly or indirectly (except 
proportionately as a stockholder), over any period of 12 
consecutive calendar months, of any loans, advances, 
guarantees, pledges, insurance, reinsurance or other 
financial assistance or any tax credits or other tax 
advantage provided by the Company or any of its subsidiaries 
involving an aggregate principal amount in excess of 
$5,000,000 or an aggregate cost or transfer of benefits from 
the Company or any of its subsidiaries in excess of 
$5,000,000 or, in any case, on terms and conditions less 
favorable to the Company than the Company would be able to 
obtain through arm's-length negotiations with a third party, 
or (D) increase by more than 1% its proportionate share of 
the outstanding shares of any class of equity securities or 
securities convertible into any class of equity securities 
of the Company or any of its subsidiaries as a result of any 
acquisition from the company (with or without 
consideration), any reclassification of securities 
(including any reverse stock split), or recapitalization, of 
the Company, or any merger or consolidation of the Company 
with any of its subsidiaries or any other transaction or 
series of transactions (whether or not with or into or 
otherwise involving an Acquiring Person), (a "Flip-over 
Transaction or Event"), the Company shall take such action 
as shall be necessary to ensure, and shall not enter into, 
consummate or permit to occur such Flip-over Transaction or 
Event until it shall have entered into a supplemental 
agreement with the Person engaging in such Flip-over 
Transaction or Event or the parent corporation thereof (the 
"Flip-over Entity"), for the benefit of the holders of the 
Rights, providing, that upon consummation or occurrence of 
the Flip-over Transaction or Event (i) each Right shall 
thereafter constitute the right to purchase from the Flip-
over Entity, upon exercise thereof in accordance with the 
terms of the Rights Agreement, that number of shares of 
common stock of the Flip-over Entity having an aggregate 
Market Price on the date of consummation

                       Page 6 of 9
or occurrence of such Flip-over Transaction or Event equal 
to twice the Exercise Price for an amount in cash equal to 
the then current Exercise Price and (ii) the Flip-over 
Entity shall thereafter be liable for, and shall assume, by 
virtue of such Flip-over Transaction or Event and such 
supplemental agreement, all the obligations and duties of 
the Company pursuant to the Rights Agreement.  For purposes 
of the foregoing description, the term "Acquiring Person" 
shall include any Acquiring Person and its Affiliates and 
Associates counted together as a single Person.

     The Board of Directors of the Company may, at its 
option, at any time prior to the close of business on the 
Flip-in Date, redeem all (but not less than all) the then 
outstanding Rights at a price of $.01 per Right) (the 
"Redemption Price"), as provided in the Rights Agreement.  
Immediately upon the action of the Board of Directors of the 
Company electing to redeem the Rights, without any further 
action and without any notice, the right to exercise the 
Rights will terminate and each Right will thereafter 
represent only the right to receive the Redemption Price in 
cash for each Right so held.  

     The holders of Rights will, solely by reason of their 
ownership of Rights, have no rights as stockholders of the 
Company, including, without limitation, the right to vote or 
to receive dividends.

     The Rights will not prevent a takeover of the Company.  
However, the Rights may cause substantial dilution to a 
person or group that acquires 10% or more of the Common 
Stock unless the Rights are first redeemed by the Board of 
Directors of the Company.  Nevertheless, the Rights should 
not interfere with a transaction that is in the best 
interests of the Company and its stockholders because the 
Rights can be redeemed on or prior to the close of business 
on the Flip-in Date, before the consummation of such 
transaction.

     As of January 26, 1999 there were 26,719,488 shares of 
Common Stock issued (of which 26,718,488 shares were 
outstanding and 0 shares were held in treasury) and 2,651,854
shares reserved for issuance pursuant to employee benefit plans.
As long as the Rights are attached to the Common Stock, the
Company will issue one Right with each new share of Common Stock
so that all such shares will have Rights attached.

                            Page 7 of 9
The Rights Agreement (which includes as Exhibit A the 
forms of Rights Certificate and Election to Exercise and as 
Exhibit B the form of Junior Participating Preferred Stock) 
is attached hereto as an exhibit and is incorporated herein 
by reference.  The foregoing description of the Rights is 
qualified in its entirety by reference to the Rights 
Agreement and such exhibits thereto.

Item 6.      Not Applicable.

Item 7.      Exhibits.
             --------

    (4)      Rights Agreement, which includes as Exhibit A
             the forms of Rights Certificate and Election to
             Exercise and as Exhibit B the form of Statement
             of Resolution Establishing a Series of Shares
             of Junior Participating Preferred Stock.

    (99)     Press release, dated January 26, 1999, issued
             by the Company.

                          

                             Page 8 of 9
SIGNATURE

	     Pursuant to the requirements of the Securities Exchange 
Act of 1934, the registrant has duly caused this report to 
be signed on its behalf by the undersigned thereunto duly 
authorized.

                                  CULLEN/FROST BANKERS, INC.

                                  By/s/Phillip D. Green
                                  --------------------------------------
                                  Name: Phillip D. Green
                                  Title: Senior Executive Vice President
                                         and Chief Financial Officer

Date: January 29, 1999

                              Page 9 of 9
EXHIBIT INDEX
                              -------------

Exhibit
Number   Description                                         Method of Filing
-------  -------------------------------------------------   ----------------
 (4)     Rights Agreement, which includes as Exhibit A the   Filed herewith
         forms of Rights Certificate and Election to Exer-
         cise and as Exhibit B the form of Statement of
         Resolution Establishing a Series of Shares of 
         Junior Participating Preferred Stock.

(99)     Press release, dated January 26, 1999, issued by    Filed herewith
         the Company.