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<B><FONT SIZE=3><P ALIGN="CENTER">UNITED STATES</B></FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</B></FONT></TD>
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<FONT SIZE=3><P ALIGN="CENTER">Washington, D.C. 20549</FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">FORM 8-K</B></FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">CURRENT REPORT</B></FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934</B></FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">Date of Report</B> </FONT><FONT SIZE=2>(Date of earliest event reported)</FONT><FONT SIZE=3>: <B>  January&nbsp;26, 2006</B></FONT></TD>
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<B><FONT SIZE=4><P ALIGN="CENTER">CULLEN/FROST BANKERS, INC.</B></FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(Exact name of issuer as specified in its charter)</FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">Texas</B></FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">0-7275</B></FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">74-1751768</B></FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(State or other jurisdiction</FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(Commission </FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(IRS Employer</FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">of incorporation)</FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">File Number)</FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">Identification No.)</FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">100 West Houston Street, San Antonio, Texas</B></FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">78205</B></FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(Address of principal executive offices)</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="CENTER">(Zip Code)</FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">(210) 220-4011</B></FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(Registrant's telephone number, including area code)</FONT></TD>
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<B><FONT SIZE=3><P ALIGN="CENTER">Not Applicable</B></FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(Former name or former address, if changed since last report)</FONT></TD>
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<FONT SIZE=3><P ALIGN="JUSTIFY">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below): </FONT></TD>
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<FONT SIZE=3><P ALIGN="JUSTIFY">[&nbsp;&nbsp;]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT></TD>
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<FONT SIZE=3><P ALIGN="JUSTIFY">[&nbsp;&nbsp;]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></TD>
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<FONT SIZE=3><P>[&nbsp;&nbsp;]  Pre-commencement communications pursuant to Rule 14d-2(b) under the&nbsp;Exchange Act<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17 CFR 240.14d-2(b))</FONT></TD>
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<FONT SIZE=3><P>[&nbsp;&nbsp;]  Pre-commencement communications pursuant to Rule 13e-4(c) under the&nbsp;Exchange Act<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17 CFR 240.13e-4(c))</FONT></TD>
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<FONT SIZE=3><P ALIGN="JUSTIFY"></P>
</FONT><U><FONT SIZE=1><P ALIGN="JUSTIFY">&nbsp;</P></U></FONT>
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<B><FONT SIZE=3><P ALIGN="JUSTIFY">Item 1.01&#9;Entry Into A Material Definitive Agreement</B></FONT></TD>
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<FONT SIZE=3><P ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;On January&nbsp;26, 2006, the Board of Directors of Cullen/Frost Bankers, Inc. (the "Corporation") approved changes to the Corporation's Director compensation arrangements. A description of the Corporation's Director compensation arrangements is as follows:  </FONT></TD>
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<B><FONT SIZE=3><P ALIGN="JUSTIFY">Director Compensation</B></FONT></TD>
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<FONT SIZE=3><P ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;Employees of the Corporation receive no fees for their services as members of the Board of Directors or any of its committees. Non-employee Directors receive an annual retainer fee of $16,000 and $2,000 for each Board meeting attended. In addition, non-employee Directors receive $1,000 for attending each meeting of a committee of the Board to which they have been appointed, except that the Chairman of the Audit Committee receives $1,500 for each meeting of the Audit Committee attended. Also, Committee Chairpersons and the Managing Director receive an annual retainer fee of $5,000. Non-employee Directors are also eligible to receive stock options each year under Cullen/ Frost's 1997 Director Stock Plan.</FONT></TD>
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<FONT SIZE=3><P ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;In addition, the Corporation's Board of Directors also serves as the Board of Directors for The Frost National Bank, a subsidiary of the Corporation. Non-employee Directors receive $2,000 for each meeting of such Board attended and $1,000 for attending each meeting of a committee of such Board to which they have been appointed. </FONT></TD>
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<FONT SIZE=3><P ALIGN="JUSTIFY"></P>
</FONT><FONT SIZE=1><P ALIGN="JUSTIFY">&nbsp;</P></FONT>
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<B><FONT SIZE=3><P ALIGN="CENTER">SIGNATURES</B></FONT></TD>
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<TR><TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
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<FONT SIZE=3><P ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 hereunto duly authorized.</FONT></TD>
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<B><FONT SIZE=3><P ALIGN="JUSTIFY">CULLEN/FROST BANKERS, INC.</B></FONT></TD>
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<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
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<FONT SIZE=2><P ALIGN="RIGHT">By:&nbsp;&nbsp;</FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">  /s/ Phillip D. Green</FONT></TD>
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<TD WIDTH="25%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=1><P></P></TD>
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<TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">Phillip D. Green</FONT></TD>
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<TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">Group Executive Vice President</FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">and Chief Financial Officer</FONT></TD>
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<FONT SIZE=3><P ALIGN="RIGHT">Dated:&nbsp;&nbsp;</FONT></TD>
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<FONT SIZE=3><P ALIGN="JUSTIFY">January&nbsp;26, 2006</FONT></TD>
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ITEM 8
UNITED STATES
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, 2006
CULLEN/FROST BANKERS, INC.
(Exact name of issuer as specified in its charter)
Texas
0-7275
74-1751768
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)
100 West Houston Street, San Antonio, Texas
78205
(Address of principal executive offices)
(Zip Code)
(210) 220-4011
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item 1.01	Entry Into A Material Definitive Agreement
On January 26, 2006, the Board of Directors of Cullen/Frost Bankers, Inc. (the "Corporation") approved changes to the Corporation's Director compensation arrangements. A description of the Corporation's Director compensation arrangements is as follows:
Director Compensation
Employees of the Corporation receive no fees for their services as members of the Board of Directors or any of its committees. Non-employee Directors receive an annual retainer fee of $16,000 and $2,000 for each Board meeting attended. In addition, non-employee Directors receive $1,000 for attending each meeting of a committee of the Board to which they have been appointed, except that the Chairman of the Audit Committee receives $1,500 for each meeting of the Audit Committee attended. Also, Committee Chairpersons and the Managing Director receive an annual retainer fee of $5,000. Non-employee Directors are also eligible to receive stock options each year under Cullen/ Frost's 1997 Director Stock Plan.
In addition, the Corporation's Board of Directors also serves as the Board of Directors for The Frost National Bank, a subsidiary of the Corporation. Non-employee Directors receive $2,000 for each meeting of such Board attended and $1,000 for attending each meeting of a committee of such Board to which they have been appointed.
SIGNATURES
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 hereunto duly authorized.
CULLEN/FROST BANKERS, INC.
By:
/s/ Phillip D. Green
Phillip D. Green
Group Executive Vice President
and Chief Financial Officer
Dated:
January 26, 2006