Core Insights - A renewed wave of spending from Chinese consumers is revitalizing the global luxury sector, alongside steady demand in the US [1] - The luxury market is recovering after a challenging year characterized by economic uncertainty [1] Group 1: Consumer Behavior - Chinese consumers are increasing their spending, which is significantly impacting the luxury market [1] - Steady demand from US consumers is also contributing to the recovery of the luxury sector [1] Group 2: Market Conditions - The luxury sector faced challenges in the previous year due to economic uncertainties, but is now showing signs of life [1] - The combination of renewed consumer spending in China and stable demand in the US is crucial for the sector's recovery [1]

Core Insights - Crude Value Insights provides an investment service and community focused on the oil and natural gas sector, emphasizing cash flow and the companies that generate it [1] - The service includes access to a 50+ stock model account, in-depth cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [1] Offerings - Subscribers can take advantage of a two-week free trial to explore the services related to oil and gas investments [2]

Core Viewpoint - Cullen/Frost Bankers, Inc. (CFR) has experienced operational stability despite recent frustrations common among regional banks, with a focus on long-term investment strategies that prioritize high-quality earnings and dividends [1] Group 1: Company Performance - Cullen/Frost Bankers, Inc. has shown operational leverage, indicating effective management and potential for sustainable growth [1] Group 2: Investment Strategy - The investment approach emphasizes a long-term, buy-and-hold strategy, particularly favoring stocks that can consistently deliver high-quality earnings, often found in the dividend and income sectors [1]

Core Insights - Cullen/Frost Bankers, Inc. (CFR) has faced challenges in recent months, similar to other regional banks, but operational performance remains strong with notable operating leverage [1] Group 1: Company Performance - The company has delivered welcome operating leverage, indicating effective management and operational efficiency [1] - A long-term, buy-and-hold investment strategy is favored for stocks like CFR that can consistently generate high-quality earnings [1] Group 2: Investment Perspective - The focus is on dividend and income stocks, suggesting a preference for stable returns and income generation [1]

Financial Performance - Net income available to common shareholders increased by $27.9 million, or 19.2%, for the three months ended September 30, 2025, and by $54.6 million, or 12.9%, for the nine months ended September 30, 2025, compared to the same periods in 2024[144]. - Return on average assets improved to 1.32% for the three months ended September 30, 2025, compared to 1.16% for the same period in 2024[145]. - Return on average common equity increased to 16.72% for the three months ended September 30, 2025, compared to 15.48% for the same period in 2024[145]. - Net income for the Banking segment increased by $25.5 million, or 17.9%, for the three months ended September 30, 2025, and by $51.8 million, or 12.5%, for the nine months ended September 30, 2025, compared to the same periods in 2024[201]. - Net income for the Frost Wealth Advisors segment increased by $1.7 million, or 22.3%, for the three months ended September 30, 2025, and by $1.7 million, or 6.6%, for the nine months ended September 30, 2025, compared to the same periods in 2024[207]. Revenue and Income Sources - Net interest income for the three months ended September 30, 2025, was $441.6 million, up from $404.3 million in the same period of 2024, representing an increase of $37.3 million[145]. - Non-interest income increased by $11.9 million to $125.6 million for the three months ended September 30, 2025, compared to $113.7 million in the same period of 2024[145]. - Total non-interest income increased by $11.9 million, or 10.5%, for the three months and $30.7 million, or 9.1%, for the nine months ended September 30, 2025, compared to the same periods in 2024[175]. - Trust and investment management fees rose by $3.8 million, or 9.3%, for the three months and $9.9 million, or 8.2%, for the nine months ended September 30, 2025[176]. - Service charges on deposit accounts increased by $4.0 million, or 14.7%, for the three months and $10.9 million, or 13.9%, for the nine months ended September 30, 2025[178]. Expenses and Costs - Total non-interest expense increased by $29.1 million, or 9.0%, for the three months ended September 30, 2025, and by $81.1 million, or 8.4%, for the nine months ended September 30, 2025, compared to the same periods in 2024[192]. - Salaries and wages increased by $12.5 million, or 8.0%, for the three months ended September 30, 2025, and by $36.3 million, or 8.0%, for the nine months ended September 30, 2025, compared to the same periods in 2024[193]. - Employee benefits expense increased by $5.4 million, or 18.6%, for the three months ended September 30, 2025, and by $15.6 million, or 16.6%, for the nine months ended September 30, 2025, compared to the same periods in 2024[194]. - Other non-interest expense increased by $4.2 million, or 6.9%, for the three months ended September 30, 2025, and by $18.0 million, or 9.9%, for the nine months ended September 30, 2025, compared to the same periods in 2024[199]. Credit and Loans - Credit loss expense decreased by $12.6 million to $6.8 million for the three months ended September 30, 2025, compared to $19.4 million for the same period in 2024[145]. - Credit loss expense totaled $6.779 million for the three months and $32.978 million for the nine months ended September 30, 2025, compared to $19.386 million and $48.823 million in 2024[174]. - Total accruing past due loans amounted to $132.9 million, or 0.62% of total loans, as of September 30, 2025, compared to $117.5 million, or 0.57%, at December 31, 2024[221]. - The total allowance for credit losses on loans was $280.2 million as of September 30, 2025, representing 1.31% of total loans[229]. - The allowance allocated to commercial and industrial loans increased by $9.1 million to $96.7 million, or 1.55% of total commercial and industrial loans[229]. Assets and Deposits - Total assets increased to $51,344,145 as of September 30, 2025, from $49,240,256 a year earlier, representing a growth of approximately 4.3%[157]. - The company’s total deposits reached $42,071,151 for the quarter ending September 30, 2025, compared to $40,733,070 for the same period in 2024, reflecting an increase of approximately 3.3%[156]. - Interest-bearing deposits totaled $28,232,079 with a cost of 1.94% for the quarter ending September 30, 2025, down from $27,074,557 and 2.41% in the same quarter of 2024[156]. - The average balance of taxable securities rose to $13.32 billion, generating $372.36 million in income, compared to $12.27 billion and $296.64 million in the previous year[157]. - As of September 30, 2025, the company had approximately $7.3 billion held in an interest-bearing account at the Federal Reserve, with a total borrowing capacity with the FHLB of approximately $6.8 billion[260]. Dividends and Shareholder Equity - Dividends per common share increased to $1.00 for the three months ended September 30, 2025, compared to $0.95 for the same period in 2024[145]. - The company declared a year-to-date dividend of $2.95 per share for 2025, with a dividend payout ratio of 40.1%[259]. - Shareholders' equity increased to $4.5 billion at September 30, 2025, from $3.9 billion at December 31, 2024, driven by net income of $482.3 million[255]. - The accumulated other comprehensive income/loss component of shareholders' equity showed a net, after-tax, unrealized loss of $924.4 million at September 30, 2025, improved from a loss of $1.3 billion at December 31, 2024[256]. Economic Outlook - The average U.S. unemployment rate is projected to be 4.41% for the remainder of 2025, with a forecasted average of 4.44% in 2026[236]. - The average oil price is expected to be $64.61 per barrel during the remainder of 2025, decreasing to $61.73 per barrel in 2026[236]. - The projected average 10-year Treasury rate is 4.35% during the remainder of 2025 and 4.40% in 2026[236]. - The average Texas unemployment rate is projected to be 4.22% for the remainder of 2025, with a forecasted average of 4.17% in 2026[236].

Financial Data and Key Metrics Changes - In Q3 2025, Cullen/Frost Bankers, Inc. earned $172.7 million, or $2.67 per share, representing a 19.2% increase from $144.8 million, or $2.24 per share, in the same quarter last year [4] - Return on average assets and average common equity were 1.32% and 16.72%, respectively, compared to 1.16% and 15.48% in Q3 last year [4] Business Line Data and Key Metrics Changes - Average deposits increased to $42.1 billion, up 3.3% from $40.7 billion in Q3 last year, while average loans grew to $21.5 billion, a 6.8% increase from $20.1 billion in Q2 last year [5] - Consumer checking households grew by 5.4% year over year, marking the strongest quarter in new checking household growth since the post-Silicon Valley flight to safety [6] - The overall consumer real estate loan portfolio reached $3.5 billion, growing by $547 million year over year, or 18.7% [7] Market Data and Key Metrics Changes - Period-end commercial loans grew by 5.1% year over year, with energy loans up 17% and C&I loans up 6.8% [7] - New commercial relationships reached 3,082 year to date, setting the pace for the largest number of new relationships in a year [8] Company Strategy and Development Direction - The company continues to focus on organic growth through strategic expansion, which has generated positive results, with expansion deposits and loans standing at $2.9 billion and $2.1 billion, respectively [5] - Expansion locations contributed $0.09 of EPS accretion, with Houston 1.0 generating $0.14 per share [12] - The company is optimistic about its strategy and believes it is well-positioned to succeed in competitive markets [11] Management's Comments on Operating Environment and Future Outlook - Management noted increasing competition in the market but expressed confidence in their ability to compete effectively [29] - The company expects net interest income growth for the full year to fall in the range of 7% to 8%, with an anticipated improvement in net interest margin of about 12 to 15 basis points [18] - Credit quality remains strong, with non-performing assets declining to $47 million from $64 million last quarter [9] Other Important Information - The company utilized $69.3 million of its $150 million approved share repurchase plan to buy back approximately 549,000 shares [20] - The effective tax rate expectation for full year 2025 remains unchanged at 16% to 17% [19] Q&A Session Summary Question: Thoughts on NIM with Fed cuts coming - Management indicated that while Fed cuts may impact NIM, they expect it to remain relatively stable due to backbook repricing and upcoming maturities [24] Question: Expense growth moderation - Management is focused on reducing expense growth from high single digits to mid-single digits, but specific guidance for 2026 is not yet available [25] Question: Competitive pressures in the market - Management acknowledged increased competition but remains confident in their ability to compete effectively, citing a strong pipeline and customer relationships [28][30] Question: Capital generation and buyback strategy - Management clarified that stock buybacks do not indicate a lack of optimism for growth; rather, they are utilizing excess capital to benefit shareholders [43][44] Question: Loan growth trends and competition - Management noted that while competition exists, they expect to continue growing despite headwinds from commercial real estate paydowns [65][67]

Financial Performance - Net income available to common shareholders for Q3 2025 was $172.7 million, up 19.3% from $144.8 million in Q3 2024, with diluted EPS increasing to $2.67 from $2.24[2][3] - Non-interest income for Q3 2025 totaled $125.6 million, up 10.5% from $113.7 million in Q3 2024[6] - Non-interest expense was $352.5 million in Q3 2025, an increase of 9.0% from $323.4 million in Q3 2024[6][7] - Credit loss expense for Q3 2025 was $6.8 million, down from $19.4 million in Q3 2024, with net loan charge-offs of $6.6 million compared to $9.6 million a year earlier[7] - Net income available to common shareholders for Q3 2025 was $172.7 million, compared to $155.3 million in Q2 2025, reflecting a 11.2% increase[16] - Earnings per common share (diluted) for Q3 2025 was $2.67, up from $2.39 in Q2 2025, indicating a 11.8% growth[16] - Net income available to common shareholders reached $477,299, a 12.9% increase from $422,684 in 2024[20] - Earnings per common share (basic) improved to $7.36, up from $6.52, marking a growth of 12.8%[20] Income and Expenses - Net interest income on a taxable-equivalent basis for Q3 2025 was $463.7 million, a 9.1% increase from $425.2 million in Q3 2024[3][6] - Net interest income for Q3 2025 was $441.6 million, an increase from $429.6 million in Q2 2025, representing a 2.3% quarter-over-quarter growth[16] - Total non-interest income reached $125.6 million in Q3 2025, up from $117.3 million in Q2 2025, marking a 7.3% increase[16] - Net interest income for the nine months ended September 30, 2025, increased to $1,287,442, up from $1,191,094 in 2024, representing a growth of 8.1%[20] - Total non-interest income rose to $366,931, compared to $336,274 in the previous year, reflecting an increase of 9.1%[20] Loans and Deposits - Average loans increased by $1.4 billion, or 6.8%, to $21.5 billion in Q3 2025 compared to $20.1 billion in Q3 2024[3][5] - Average loans for Q3 2025 were $21.5 billion, up from $21.1 billion in Q2 2025, showing a 1.8% increase[18] - Loans averaged $21,103 million, up from $19,618 million, representing an increase of 7.6%[22] - Average deposits rose by $1.3 billion, or 3.3%, to $42.1 billion in Q3 2025 from $40.7 billion in Q3 2024[3][5] Capital and Ratios - The Common Equity Tier 1 capital ratio was 14.14% at the end of Q3 2025, exceeding Basel III minimum requirements[6] - Common Equity Tier 1 Risk-Based Capital Ratio improved to 14.14% in Q3 2025 from 13.98% in Q2 2025[18] - Common Equity Tier 1 Risk-Based Capital Ratio improved to 14.14%, compared to 13.55% in the previous year[22] Asset Management - Total assets as of Q3 2025 were $52.5 billion, an increase from $51.4 billion in Q2 2025, representing a 2.1% growth[18] - Total assets as of September 30, 2025, were $52,533, an increase from $51,008 in 2024, indicating a growth of 3.0%[22] Dividends - The board declared a fourth-quarter cash dividend of $1.00 per common share, payable on December 15, 2025[8] - Cash dividends per common share remained stable at $1.00 for both Q3 2025 and Q2 2025[16] - Cash dividends per common share increased to $2.95, compared to $2.79 in the previous year, reflecting a growth of 5.7%[20] Strategic Focus - Cullen/Frost is focused on expanding its market presence and enhancing digital banking tools to improve customer experience[4] Loan Quality - The allowance for credit losses on loans was $280.2 million, representing 1.31% of period-end loans in Q3 2025, consistent with Q2 2025[18] - Non-accrual loans decreased to $44.8 million in Q3 2025 from $62.4 million in Q2 2025, a reduction of 28.0%[18]

Core Points - Cullen/Frost Bankers, Inc. will host a conference call on October 30, 2025, to discuss its third quarter 2025 earnings [1] - The earnings release will be available at approximately 8:00 a.m. Central Time on the company's investor relations website [1] Conference Call Details - The conference call will begin at 1:00 p.m. CT and will be hosted by key executives including Phil Green, Dan Geddes, and A.B. Mendez [2] - A question and answer session will follow the prepared remarks, allowing analysts to engage with the executives [2] Access Information - The live webcast can be accessed via the company's investor relations website, and it will be archived for playback after 5:00 p.m. CT on the day of the call [3] - A domestic telephone number for the conference call is provided, with a recommendation to dial in 5 to 10 minutes early for efficient registration [3]

Core Insights - Cullen/Frost Bankers (CFR) has a strong track record of exceeding earnings estimates, particularly in the last two quarters, with an average surprise of 5.41% [1][5] - For the last reported quarter, the company achieved earnings of $2.39 per share, surpassing the Zacks Consensus Estimate of $2.28 per share by 4.82% [2] - The previous quarter also saw a positive surprise, with actual earnings of $2.30 per share against an expected $2.17 per share, resulting in a 5.99% surprise [2] Earnings Estimates and Predictions - Estimates for Cullen/Frost have been increasing, driven by its history of earnings surprises, and the stock currently has a positive Zacks Earnings ESP of +1.40% [5][8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with historical data indicating that nearly 70% of stocks with this combination exceed consensus estimates [6][8] - The Zacks Earnings ESP measures the Most Accurate Estimate against the Zacks Consensus Estimate, reflecting the latest analyst revisions prior to earnings releases [7] Investment Considerations - While many companies may beat consensus EPS estimates, this does not always correlate with stock price increases, making it essential to consider the Earnings ESP before quarterly releases [9] - Investors are encouraged to utilize the Earnings ESP Filter to identify promising stocks ahead of earnings announcements [9]

Core Viewpoint - The article compares First Horizon National (FHN) and Cullen/Frost Bankers (CFR) to determine which stock is more attractive to value investors [1] Group 1: Zacks Rank and Earnings Outlook - First Horizon National has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Cullen/Frost Bankers has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank is based on recent positive revisions to earnings estimates, suggesting that FHN has an improving earnings outlook [3] Group 2: Valuation Metrics - FHN has a forward P/E ratio of 12.79, compared to CFR's forward P/E of 13.52, indicating that FHN may be undervalued [5] - FHN's PEG ratio is 1.06, while CFR's PEG ratio is significantly higher at 2.66, suggesting FHN has better growth potential relative to its valuation [5] - FHN's P/B ratio is 1.3, while CFR's P/B ratio is 2.01, further supporting the notion that FHN is more attractively valued [6] Group 3: Value Grades - FHN has a Value grade of B, while CFR has a Value grade of C, indicating that FHN is viewed more favorably by value investors [6] - The combination of Zacks Rank and Style Scores suggests that FHN is the better option for value investors at this time [6]