Administration August 11, 2002

Frost Opens Sec Lending Division

November 20, 2001 (PLANSPONSOR.com) - Frost Bank has established Frost Securities Lending, a new division that facilitates transactions for institutional investors and plan sponsors, providing an opportunity to earn enhanced returns on their portfolios.

Reported by

Nevin E. Adams

Securities lending involves the loaning of securities by one portfolio to another for a fee. Many market activities still require the ability to physically deliver securities, most commonly to prevent a failed sale or to facilitate a short sale. This need for physical delivery sometimes creates a need to be able to obtain physical securities in shorter timeframes than permitted by normal trading permits.

This need is greater for securities that are in short supply, are heavily traded (such as those held by index funds) or are difficult to acquire (such as some international securities).

“Loan” Star State

Frost Securities Lending, based in Dallas, will work with both lenders and borrowers in this process. The bank says it has already secured more than 1.5 billion dollars in assets.

The company was created when a prior institution consolidated its securities lending practices out of state, and a team of securities lending veterans that wanted to remain in Texas approached Frost Bank.

According to Paul Grimm, senior vice president and manager of Frost Securities Lending, the philosophy of Frost Securities Lending will differ slightly from traditional securities lending practices, embracing both the institutional investor and broker/dealers as customers.