Filed by Cullen/Frost Bankers, Inc. pursuant to Rule 425 under the Securities
Act of 1933,
as amended

Subject Company: Horizon Capital Bank

Commission File No.: 0-7275

Date: July 27, 2005

Forward Looking Statements

   Certain statements contained in this filing that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), notwithstanding that such statements are not specifically identified. In addition, certain statements may be contained in the future filings of Cullen/Frost Bankers, Inc. with the Securities and Exchange Commission ("SEC"), in press releases, and in oral and written statements made by or with the approval of Cullen/Frost that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) statements about the benefits of the merger between Cullen/Frost and Horizon Capital Bank, including future financial and operating results, cost savings, enhanced revenues and accretion to reported earnings that may be realized from the merger; (ii) statements of plans, objectives and expectations of Cullen/Frost or Horizon or their managements or Boards of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes", "anticipates", "expects", "intends", "targeted", "continue", "remain", "will", "should", "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

   Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (i) the risk that the businesses of Cullen/Frost and Horizon will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; (ii) expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame; (iii) revenues following the merger may be lower than expected; (iv) deposit attrition, operating costs, customer loss and business disruption following the merger, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected; (v) the ability to obtain governmental approvals of the merger on the proposed terms and schedule; (vi) the failure of Horizon's shareholders to approve the merger; (vii) local, regional, national and international economic conditions and the impact they may have on Cullen/Frost and Horizon and their customers and Cullen/Frost's and Horizon's assessment of that impact; (viii) changes in the level of non-performing assets and charge-offs; (ix) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (x) inflation, interest rate, securities market and monetary fluctuations; (xi) changes in the competitive environment among financial holding companies and banks; and (xii) changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which Cullen/Frost and Horizon must comply. Additional factors that could cause Cullen/Frost's results to differ materially from those described in the forward-looking statements can be found in Cullen/Frost's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC. All subsequent written and oral forward-looking statements concerning the proposed transaction or other matters and attributable to Cullen/Frost or Horizon or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements referenced above. Forward-looking statements speak only as of the date on which such statements are made. Cullen/Frost and Horizon undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

Additional Information

   In connection with the proposed merger with Horizon Capital Bank, Cullen/Frost Bankers, Inc. filed with the SEC on July 6, 2005, a Registration Statement on Form S-4 (File No. 333-126429) that included a Proxy Statement of Horizon Capital Bank and a Prospectus of Cullen/Frost, as well as other relevant documents concerning the proposed transaction. Shareholders are urged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain important information. You can obtain a free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Cullen/Frost at the SEC's Internet site (http://www.sec.gov). You can also obtain these documents, free of charge, at http://www.frostbank.com under the tab "About Frost" and then under the heading "Investor Relations" and then under "SEC Filings". Copies of the Proxy Statement/Prospectus and the SEC filings that are incorporated by reference in the Proxy Statement/Prospectus can also be obtained, free of charge, by directing a request to Greg Parker, Executive Vice President & Director of Investor Relations, Cullen/Frost Bankers, Inc., P.O. Box 1600, San Antonio, Texas 78296, (210) 220-5632.

On July 27, 2005, Cullen/Frost Bankers, Inc. issued a press release regarding its financial results for the quarter ended June 30, 2005. The text of the press release follows:

Greg Parker

Investor Relations

210/220-5632

     or

Renee Sabel

Media Relations

210/220-5416

FOR IMMEDIATE RELEASE

JULY 27, 2005

CULLEN/FROST REPORTS SECOND QUARTER

RESULTS AND TIMING OF EARNINGS CONFERENCE CALL

SAN ANTONIO - Cullen/Frost Bankers, Inc. (NYSE: CFR) today reported a 19 percent increase in second quarter 2005 net income of $40.7 million, or $.77 per diluted share, compared to $34.1 million, or $.65 per diluted share for the same quarter of 2004. Returns on average assets and average equity were 1.67 percent and 19.35 percent, respectively, for the second quarter of 2005, compared to 1.43 percent and 18.11 percent for the same quarter of 2004.

Noted financial data for the second quarter of 2005 follows:

w

Net interest income on a taxable-equivalent basis was $95.9 million for the second quarter of 2005, a 16.2 percent increase over the $82.6 million reported for the same quarter a year earlier. The net interest margin rose by 40 basis points, from 4.02 percent to 4.42 percent. Contributing to these increases was a rise in general market rates - influenced by periodic increases in the Fed Funds rate, which rose from 1.25 percent on June 30, 2004 to 3.25 percent on June 30, 2005 - along with a 5.4 percent growth in earning assets, with a larger proportion of these assets being in higher yielding loans.

w

   For the second quarter, income from trust fees was $14.5 million, a 6.1 percent increase over the $13.7 million reported the previous year. Driving this growth in investment fees were improvements in the equities market when compared to a year earlier, and the addition of new trust accounts.

   Other income was up $3.7 million from the second quarter last year, as the Corporation recognized income of $2.4 million related to net proceeds from the settlement of legal claims relating to the departure of certain revenue producing employees in the benefits area of our Austin insurance operations.

   Service charges on deposits for the quarter were $19.5 million, compared to $22.5 million for the second quarter of 2004. This decrease was primarily related to a drop in treasury management fees from commercial accounts impacted by an increase in the earnings credit rate compared to a year earlier. During a rising interest rate environment, customers earn more credit for their deposit balances, which in turn reduces the amount of fees paid for these services.

w

Non-interest expense was $89.5 million, up $4.3 million, or 5.0 percent over the $85.2 million reported for the same period last year. Salaries and wages, combined with employee benefits, were up $2.3 million, or 4.8 percent from the same quarter of 2004, primarily due to normal annual merit increases and higher staff levels. Other expenses were up $1.6 million, or 7.3 percent, compared to the second quarter last year, and were impacted by increases in charitable donations and professional services expense.

w

For the second quarter of 2005, the provision for possible loan losses was $2.2 million, compared to net charge-offs of $1.6 million. The provision for possible loan losses for the second quarter of 2004 was $2.0 million, compared to net charge-offs of $4.1 million. At the end of the second quarter, the allowance for possible loan losses as a percentage of period-end loans was 1.38 percent, compared to 1.67 percent at the same date last year. Non-performing assets at June 30, 2005 were $41.3 million compared to $46.2 million for the second quarter of 2004.

Cullen/Frost Bankers, Inc. is a financial holding company, headquartered in San Antonio, with assets of $10 billion at June 30, 2005. The corporation provides a full range of commercial and consumer banking products, investment and brokerage services, insurance products and investment banking services. Its subsidiary, Frost Bank, operates 78 financial centers across Texas in Austin, Boerne, Corpus Christi, Dallas, Fort Worth, Galveston, Harlingen, Houston, McAllen, New Braunfels, San Antonio and San Marcos. Founded in 1868, Frost is the largest national bank based in Texas, helping Texans with their financial needs during three centuries. Cullen/Frost Bankers' stock is traded on the New York Stock Exchange under the symbol CFR.

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

(In thousands, except per share amounts)

2005

2004

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

CONDENSED INCOME STATEMENTS

Net interest income

$

94,078

$

90,103

$

87,888

$

83,976

$

81,242

Net interest income(1)

95,926

91,789

89,416

85,419

82,576

Provision for possible loan
losses

2,175

2,400

--

--

2,000

Non-interest income:

 Trust fees

14,541

14,290

13,886

13,213

13,704

 Service charges on deposit   accounts

19,462

19,367

20,855

22,409

22,468

 Insurance commissions and fees

6,193

8,610

6,536

8,048

6,234

 Other charges, commissions and   fees

4,821

4,288

5,709

4,383

4,952

 Net gain (loss) on securities   transactions

--

--

--

(1,638

)

--

 Other

12,716

11,484

8,765

9,219

8,978

 Total non-interest income

57,733

58,039

55,751

55,634

56,336

Non-interest expense:

 Salaries and wages

40,454

40,000

40,588

39,836

38,855

 Employee benefits

10,315

12,037

9,568

9,532

9,592

 Net occupancy

7,408

7,344

7,157

7,524

7,364

 Furniture and equipment

5,925

5,802

5,999

5,662

5,661

 Intangible amortization

1,278

1,371

1,370

1,285

1,287

 Other

24,070

23,933

22,053

22,660

22,440

 Total non-interest expense

89,450

90,487

86,735

86,499

85,199

Income before income taxes

60,186

55,255

56,904

53,111

50,379

Income taxes

19,502

17,888

18,573

17,140

16,261

Net income

$

40,684

$

37,367

$

38,331

$

35,971

$

34,118

PER SHARE DATA

Net income - basic

$

0.78

$

0.72

$

0.74

$

0.70

$

0.67

Net income - diluted

0.77

0.70

0.71

0.68

0.65

Cash dividends

0.30

0.265

0.265

0.265

0.265

Book value at end of quarter

16.81

15.59

15.84

15.89

14.41

OUTSTANDING SHARES

Period-end shares

52,308

51,817

51,924

51,988

51,520

Weighted-average shares - basic

51,884

51,653

52,083

51,568

51,281

Dilutive effect of stock
  compensation

1,246

1,416

1,555

1,562

1,441

Weighted-average shares - diluted

53,130

53,069

53,638

53,130

52,722

SELECTED ANNUALIZED RATIOS

Return on average assets

1.67

%

1.54

%

1.52

%

1.50

%

1.43

%

Return on average equity

19.35

18.31

18.18

18.45

18.11

Net interest income to average earning assets(1)

4.42

4.29

4.04

4.09

4.02

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

2005

2004

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

BALANCE SHEET SUMMARY

 ($ in millions)

Average Balance:

  Loans

$

5,483

$

5,286

$

5,023

$

4,844

$

4,792

  Earning assets

8,697

8,666

8,851

8,317

8,254

  Total assets

9,786

9,840

10,028

9,515

9,617

  Non-interest-bearing demand
   deposits

2,869

2,897

2,947

2,891

2,959

  Interest-bearing deposits

5,005

5,058

5,035

4,878

4,743

  Total deposits

7,874

7,955

7,982

7,769

7,702

  Shareholders' equity

844

828

839

776

758

Period-End Balance:

  Loans

$

5,589

$

5,403

$

5,165

$

4,948

$

4,813

  Earning assets

8,903

8,768

8,892

8,544

8,132

  Goodwill and intangible
   assets

112

115

117

118

112

  Total assets

9,951

9,849

9,953

9,825

9,570

  Total deposits

8,011

8,003

8,106

7,822

7,934

  Shareholders' equity

879

808

822

826

742

  Adjusted shareholders'
   equity(1)

890

849

833

822

785

ASSET QUALITY

  ($ in thousands)

Allowance for possible

  loan losses

$

77,103

$

76,538

$

75,810

$

77,114

$

80,485

   As a percentage of

    period-end loans

1.38

%

1.42

%

1.47

%

1.56

%

1.67

%

Net charge-offs

$

1,610

$

1,672

$

1,304

$

3,371

$

4,102

   Annualized as a percentage

    of average loans

0.12

%

0.13

%

0.10

%

0.28

%

0.34

%

Non-performing assets:

  Non-accrual loans

$

34,205

$

32,884

$

30,443

$

42,701

$

41,046

  Foreclosed assets

7,130

8,189

8,673

7,734

5,152

   Total

$

41,335

$

41,073

$

39,116

$

50,435

$

46,198

  As a percentage of:

   Total loans and

    foreclosed assets

0.74

%

0.76

%

0.76

%

1.02

%

0.96

%

   Total assets

0.42

0.42

0.39

0.51

0.48

CONSOLIDATED CAPITAL RATIOS

Tier 1 Risk-Based

  Capital Ratio

12.84

%

12.73

%

12.83

%

13.18

%

13.08

%

Total Risk-Based

  Capital Ratio

15.82

15.82

15.99

16.48

16.52

Leverage Ratio

10.06

9.51

9.18

9.62

9.12

Equity to Assets Ratio

   (period-end)

8.84

8.20

8.26

8.41

7.76

Equity to Assets Ratio

   (average)

8.62

8.41

8.37

8.15

7.88

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

(In thousands, except per share amounts)

Six Months Ended

June 30,

2005

2004

CONDENSED INCOME STATEMENTS

Net interest income

$

184,181

$

159,574

Net interest income(1)

187,672

162,267

Provision for possible loan losses

4,575

2,500

Non-interest income

Trust fees

28,831

26,811

Service charges on deposit accounts

38,829

44,151

Insurance commissions and fees

14,803

16,397

Other charges, commissions and fees

9,109

9,261

Net gain (loss) securities transactions

-

(1,739

)

Other

24,200

18,844

Total non-interest income

115,772

113,725

Non-interest expense

Salaries and wages

80,454

77,615

Employee benefits

22,352

21,076

Net occupancy

14,752

14,694

Furniture and equipment

11,727

11,110

Intangible amortization

2,649

2,691

Other

48,003

44,610

Total non-interest expense

179,937

171,796

Income before income taxes

115,441

99,003

Income taxes

37,390

31,980

Net income

$

78,051

$

67,023

PER SHARE DATA

Net income - basic

$

1.51

$

1.30

Net income - diluted

1.47

1.27

Cash dividends

0.565

0.505

Book value at end of period

16.81

14.41

OUTSTANDING SHARES

Period-end shares

52,308

51,520

Weighted-average shares - basic

51,769

51,474

Dilutive effect of stock compensation

1,331

1,438

Weighted-average shares - diluted

53,100

52,912

SELECTED ANNUALIZED RATIOS

Return on average assets

1.60

1.42

Return on average equity

18.83

17.49

Net interest income to average earning assets(1)

4.35

4.03

(1)

Taxable-equivalent basis assuming a 35% tax rate.

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

As of or for the

Six Months Ended

June 30,

2005

2004

BALANCE SHEET SUMMARY

  ($ in millions)

Average Balance:

Loans

$

5,385

$

4,711

Earning assets

8,682

8,118

Total assets

9,810

9,470

Non-interest-bearing demand deposits

2,882

2,910

Interest-bearing deposits

5,032

4,747

Total deposits

7,914

7,657

Shareholders' equity

836

771

Period-End Balance:

Loans

$

5,589

$

4,813

Earning assets

8,903

8,132

Goodwill and intangible assets

112

112

Total assets

9,951

9,570

Total deposits

8,011

7,934

Shareholders' equity

879

742

Adjusted shareholders' equity(1)

890

785

ASSET QUALITY

($ in thousands)

Allowance for possible loan losses

$

77,103

$

80,485

As a percentage of period-end loans

1.38

%

1.67

%

Net charge-offs:

$

3,282

$

5,516

Annualized as a percentage of average loans

0.12

%

0.23

%

Non-performing assets:

Non-accrual loans

$

34,205

$

41,046

Foreclosed assets

7,130

5,152

  Total

$

41,335

$

46,198

As a percentage of:

  Total loans and foreclosed assets

0.74

%

0.96

%

  Total assets

0.42

0.48

CONSOLIDATED CAPITAL RATIOS

Tier 1 Risk-Based Capital Ratio

12.84

%

13.08

%

Total Risk-Based Capital Ratio

15.82

16.52

Leverage Ratio

10.06

9.12

Equity to Assets Ratio (period-end)

8.84

7.76

Equity to Assets Ratio (average)

8.52

8.14

(1)

Shareholders' equity excluding accumulated other comprehensive income (loss).