Core Insights - Cullen/Frost Bankers (CFR) reported revenue of $567.83 million for the quarter ended June 2025, marking a year-over-year increase of 7.4% and exceeding the Zacks Consensus Estimate of $557.33 million by 1.88% [1] - The company's EPS for the same period was $2.39, up from $2.21 a year ago, and also surpassed the consensus EPS estimate of $2.28 by 4.82% [1] Financial Performance Metrics - Net loan charge-offs to average loans stood at 0.2%, matching the average estimate from four analysts [4] - Total earning assets averaged $47.66 billion, slightly below the four-analyst average estimate of $47.95 billion [4] - Net Interest Margin (FTE) was reported at 3.7%, aligning with the four-analyst average estimate [4] - Book value per common share at the end of the quarter was $63.04, slightly above the three-analyst average estimate of $62.96 [4] - Total Non-Performing Loans/Non-accrual loans were $62.39 million, significantly lower than the average estimate of $88.68 million from two analysts [4] - Total Non-Interest Income reached $117.27 million, exceeding the four-analyst average estimate of $116.73 million [4] - Net Interest Income (FTE) was reported at $450.56 million, above the four-analyst average estimate of $440.6 million [4] - Other charges, commissions, and fees totaled $13.97 million, surpassing the average estimate of $13.26 million from three analysts [4] - Insurance commissions and fees were $13.88 million, below the average estimate of $16.16 million from three analysts [4] - Trust and investment management fees amounted to $43.67 million, exceeding the average estimate of $41.43 million from three analysts [4] - Net Interest Income was reported at $429.6 million, above the three-analyst average estimate of $419.42 million [4] - Service charges on deposit accounts were $29.15 million, compared to the average estimate of $28.01 million from three analysts [4] Stock Performance - Shares of Cullen/Frost have returned -0.3% over the past month, while the Zacks S&P 500 composite has increased by 2.7% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Financial Performance - Cullen/Frost Bankers reported quarterly earnings of $2.39 per share, exceeding the Zacks Consensus Estimate of $2.28 per share, and up from $2.21 per share a year ago, representing an earnings surprise of +4.82% [1] - The company posted revenues of $567.83 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.88%, compared to year-ago revenues of $528.81 million [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.32 on revenues of $568.79 million, and for the current fiscal year, it is $9.27 on revenues of $2.27 billion [7] - The estimate revisions trend for Cullen/Frost was favorable ahead of the earnings release, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Market Comparison - Cullen/Frost shares have underperformed the market with a loss of about 0.2% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The Zacks Industry Rank for Banks - Southwest is currently in the top 15% of over 250 Zacks industries, suggesting a favorable industry outlook that can impact stock performance [8]

[Cullen/Frost Second Quarter 2025 Earnings Release](index=1&type=section&id=CULLEN%2FFROST%20REPORTS%20SECOND%20QUARTER%20RESULTS) [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Highlights) Cullen/Frost reported strong Q2 2025 results with increased net income, diluted EPS, and significant growth in average loans and deposits Key Performance Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income (Common) | $155.3 million | $143.8 million | +8.0% | | Diluted EPS | $2.39 | $2.21 | +8.1% | | Return on Average Assets | 1.22% | 1.18% | +4 bps | | Return on Average Common Equity | 15.64% | 17.08% | -144 bps | Average Balances and Net Interest Income | Metric | Q2 2025 | Q2 2024 | YoY Change | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Avg. Loans | $21.1 billion | $19.7 billion | +7.2% | $20.8 billion | +1.3% | | Avg. Deposits | $41.8 billion | $40.5 billion | +3.1% | $41.7 billion | +0.2% | | Net Interest Income (Taxable-Equiv.) | $450.6 million | $417.6 million | +7.9% | - | - | - Management attributes the strong performance to the durability of the company's **organic growth model**, highlighting **solid loan growth** and a **slight increase in average total deposits** despite seasonal weakness[4](index=4&type=chunk) [Year-to-Date 2025 Performance Highlights](index=2&type=section&id=Year-to-Date%202025%20Performance%20Highlights) Year-to-date 2025 results show a 9.6% increase in net income and a 9.8% rise in diluted EPS compared to 2024 Year-to-Date Key Performance Metrics | Metric | First Six Months 2025 | First Six Months 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income (Common) | $304.6 million | $277.9 million | +9.6% | | Diluted EPS | $4.69 | $4.27 | +9.8% | | Return on Average Assets | 1.20% | 1.14% | +6 bps | | Return on Average Common Equity | 15.59% | 16.13% | -54 bps | [Detailed Financial Analysis (Q2 2025)](index=2&type=section&id=Detailed%20Financial%20Analysis%20%28Q2%202025%29) Q2 2025 analysis reveals strong capital, expanded net interest margin, growth in non-interest income, and stable credit quality despite rising expenses [Capital Ratios and Net Interest Margin](index=2&type=section&id=Capital%20Ratios%20and%20Net%20Interest%20Margin) - Capital ratios at the end of Q2 2025 remain **well-capitalized** and **exceed Basel III minimums**, with a Common Equity Tier 1 ratio of **13.98%**[6](index=6&type=chunk) - Net interest margin was **3.67%** for Q2 2025, an increase from **3.54%** in Q2 2024 and **3.60%** in Q1 2025[6](index=6&type=chunk) [Non-Interest Income](index=2&type=section&id=Non-Interest%20Income) - Total non-interest income increased by **5.5% YoY** to **$117.3 million** in Q2 2025[6](index=6&type=chunk) - Key drivers of non-interest income growth YoY include: - Trust and investment management fees: **+$2.3 million (5.5%)**, mainly from higher investment management fees[6](index=6&type=chunk) - Service charges on deposit accounts: **+$3.0 million (11.6%)**, driven by increased overdraft charges from more active accounts[6](index=6&type=chunk) - Other charges, commissions, and fees: **+$0.9 million (7.3%)**, primarily from annuity placement income[6](index=6&type=chunk)[7](index=7&type=chunk) [Non-Interest Expense](index=3&type=section&id=Non-Interest%20Expense) - Total non-interest expense rose by **9.5% YoY** to **$347.1 million** in Q2 2025[7](index=7&type=chunk) - Key drivers of non-interest expense growth YoY include: - Salaries and wages: **+$10.9 million (7.2%)**, due to merit/market increases and higher employee count for expansion[7](index=7&type=chunk) - Employee benefits: **+$4.0 million (14.0%)**, from increased 401(k) and medical expenses[7](index=7&type=chunk) - Technology, furniture, and equipment: **+$4.6 million (12.9%)**, mainly from higher cloud services and software maintenance costs[7](index=7&type=chunk) - Other non-interest expense: **+$10.1 million (16.8%)**, driven by advertising, sundry expenses, and fraud losses[7](index=7&type=chunk) [Credit Quality](index=3&type=section&id=Credit%20Quality) Credit Quality Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Credit Loss Expense | $13.1 million | $13.1 million | $15.8 million | | Net Loan Charge-offs | $11.2 million | $9.7 million | $9.7 million | | Allowance for Credit Losses (% of loans) | 1.31% | 1.32% | 1.28% | | Non-accrual Loans | $62.4 million | $83.5 million | $75.0 million | [Dividends and Conference Call](index=5&type=section&id=Dividends%20and%20Conference%20Call) The Board declared Q3 2025 cash dividends for common and preferred shares, with a conference call scheduled for July 31, 2025 - A Q3 2025 cash dividend of **$1.00** per common share was declared, payable on September 15, 2025, to shareholders of record on August 29, 2025[9](index=9&type=chunk) - A cash dividend of **$11.125** per share of Series B Preferred Stock (or **$0.278125** per depositary share) was also declared, payable on the same dates[9](index=9&type=chunk) - The company will host a conference call to discuss the results on July 31, 2025, at 1 p.m. Central Time[10](index=10&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements%20and%20Factors%20that%20Could%20Affect%20Future%20Results) This section outlines forward-looking statements, emphasizing that actual results may vary due to inherent risks and uncertainties, with no obligation to update [Risk Factors](index=6&type=section&id=Risk%20Factors) Key risk factors include changes in economic conditions, monetary policies, credit quality, technology, competition, and regulatory developments - Forward-looking statements are not guarantees of future performance and involve risks and uncertainties[12](index=12&type=chunk)[13](index=13&type=chunk) - Key risk factors include: - Effects of trade, monetary, and fiscal policies, including interest rates and tariffs[15](index=15&type=chunk) - Inflation and market fluctuations[15](index=15&type=chunk) - Changes in economic conditions and borrower financial health[15](index=15&type=chunk) - Shifts in loan portfolio mix and non-performing assets[15](index=15&type=chunk) - Technological changes and cybersecurity incidents[15](index=15&type=chunk) - Competition in banking markets[15](index=15&type=chunk) - Legal, regulatory, and accounting policy changes[15](index=15&type=chunk) [Consolidated Financial Summary (Unaudited)](index=7&type=section&id=Cullen%2FFrost%20Bankers%2C%20Inc.%20CONSOLIDATED%20FINANCIAL%20SUMMARY%20%28UNAUDITED%29) [Quarterly Financial Data](index=7&type=section&id=Quarterly%20Financial%20Data) This section presents unaudited consolidated financial data for the five most recent quarters, including income statements, balance sheets, and capital ratios Quarterly Consolidated Financial Data | | 2nd Qtr 2025 | 1st Qtr 2025 | 2nd Qtr 2024 | | :--- | :--- | :--- | :--- | | **Income Statement** | | | | | Net Interest Income | $429.6 million | $416.2 million | $396.7 million | | Credit Loss Expense | $13.1 million | $13.1 million | $15.8 million | | Total Non-interest Income | $117.3 million | $124.0 million | $111.2 million | | Total Non-interest Expense | $347.1 million | $348.1 million | $317.0 million | | Net Income (Common) | $155.3 million | $149.3 million | $143.8 million | | Diluted EPS | $2.39 | $2.30 | $2.21 | | **Balance Sheet (Period-End)** | | | | | Total Loans | $21,254 million | $20,904 million | $19,996 million | | Total Assets | $51,409 million | $52,005 million | $48,843 million | | Total Deposits | $41,684 million | $42,391 million | $40,318 million | | **Asset Quality** | | | | | Non-accrual Loans | $62.4 million | $83.5 million | $75.0 million | | **Capital Ratios** | | | | | Common Equity Tier 1 | 13.98% | 13.84% | 13.35% | [Year-to-Date Financial Data](index=9&type=section&id=Year-to-Date%20Financial%20Data) This section provides a comparative summary of year-to-date financial performance, including income statements, balance sheets, and asset quality metrics Year-to-Date Consolidated Financial Data | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Income Statement** | | | | Net Interest Income | $845.8 million | $786.8 million | | Credit Loss Expense | $26.2 million | $29.4 million | | Total Non-interest Income | $241.3 million | $222.6 million | | Total Non-interest Expense | $695.2 million | $643.2 million | | Net Income (Common) | $304.6 million | $277.9 million | | Diluted EPS | $4.69 | $4.27 | | **Balance Sheet (Period-End)** | | | | Total Loans | $21,254 million | $19,996 million | | Total Assets | $51,409 million | $48,843 million | | Total Deposits | $41,684 million | $40,318 million | | **Asset Quality** | | | | Net Charge-offs | $20.8 million | $17.1 million | | Non-accrual Loans | $62.4 million | $75.0 million | [Taxable-Equivalent Yield/Cost and Average Balances](index=11&type=section&id=Taxable-Equivalent%20Yield%2FCost%20and%20Average%20Balances) This section details taxable-equivalent yields and costs on earning assets and interest-bearing liabilities, along with average balances, to explain net interest margin Taxable-Equivalent Yield/Cost and Average Balances (Q2 2025) | Metric (Q2 2025) | Yield/Cost | Average Balance ($M) | | :--- | :--- | :--- | | **Earning Assets** | | | | Loans, net of unearned discounts | 6.60% | $21,063 million | | Securities | 3.79% | $20,401 million | | Total earning assets | 5.07% | $47,664 million | | **Interest-Bearing Liabilities** | | | | Total interest-bearing deposits | 1.93% | $27,972 million | | Total interest-bearing funds | 2.12% | $32,471 million | | **Spreads** | | | | Net interest spread | 2.95% | - | | Net interest income to total avg. earning assets | 3.67% | - |

Company Overview - Cullen/Frost Bankers (CFR) is based in San Antonio and operates in the Finance sector, with a year-to-date share price change of 0.51% [3] - The company currently pays a dividend of $1.00 per share, resulting in a dividend yield of 2.96%, which is significantly higher than the Banks - Southwest industry's yield of 1.26% and the S&P 500's yield of 1.45% [3] Dividend Performance - The current annualized dividend of $4.00 represents a 7% increase from the previous year [4] - Over the past five years, Cullen/Frost Bankers has increased its dividend five times, achieving an average annual increase of 7.98% [4] - The company's current payout ratio is 42%, indicating that it pays out 42% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year 2025, the Zacks Consensus Estimate projects earnings of $9.27 per share, reflecting a year-over-year growth rate of 3.23% [5] - The company is positioned as an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [6]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Cullen/Frost Bankers (CFR) due to higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $2.28 per share, reflecting a +3.2% change year-over-year, and revenues of $557.33 million, which is a 5.4% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.22% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP of +4.45% indicates a likelihood of beating the consensus EPS estimate, supported by a Zacks Rank of 2 [11]. Historical Performance - Cullen/Frost has consistently beaten consensus EPS estimates, achieving this in the last four quarters, including a +5.99% surprise in the most recent quarter [12][13]. Conclusion - While the potential for an earnings beat exists, other factors may also influence stock movement, making it essential to consider the Earnings ESP and Zacks Rank before the earnings release [14][15][16].

Group 1 - TQP Research is managed by a Certified Public Accountant (CPA) with experience in structured finance and banking [1] - The investment approach is value-oriented, focusing on businesses that align with long-term success criteria established by notable investors like Warren Buffett and Charlie Munger [1] - Investment topics include market analysis, macroeconomic trends, large-cap blue chip companies, and undervalued micro-cap and small-cap stocks [1] Group 2 - TQP Research actively engages with the community and encourages questions and ideas from members [1]

Company Overview - Cullen/Frost Bankers (CFR) is headquartered in San Antonio and has experienced a price change of 2.45% this year [3] - The company currently pays a dividend of $1.00 per share, resulting in a dividend yield of 2.91%, which is higher than the Banks - Southwest industry's yield of 1.28% and the S&P 500's yield of 1.52% [3] Dividend Performance - The current annualized dividend of $4.00 represents a 7% increase from the previous year [4] - Over the last 5 years, the company has increased its dividend 5 times, averaging an annual increase of 7.98% [4] - The current payout ratio is 42%, indicating that the company pays out 42% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year 2025, the Zacks Consensus Estimate for earnings is $9.27 per share, with an expected increase of 3.23% from the previous year [5] - The company is positioned as an attractive dividend play, supported by solid earnings growth expectations [6] Investment Considerations - High-growth firms typically do not provide dividends, while established companies like Cullen/Frost are seen as better dividend options [6] - The stock has a strong Zacks Rank of 2 (Buy), indicating a compelling investment opportunity [6]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: Cullen/Frost Bankers (CFR) - Cullen/Frost Bankers currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [3][4]. - The stock has shown strong performance, with a 3.51% increase over the past week, compared to a 2.55% increase in the Zacks Banks - Southwest industry [6]. - Over the last three months, CFR shares have risen by 26.42%, and by 39.34% over the past year, outperforming the S&P 500's increases of 24.12% and 14.76%, respectively [7]. Trading Volume - CFR's average 20-day trading volume is 295,230 shares, which serves as a bullish indicator when combined with rising stock prices [8]. Earnings Outlook - In the past two months, two earnings estimates for CFR have been revised upwards, increasing the consensus estimate from $9.17 to $9.24 [10]. - For the next fiscal year, two estimates have also moved upwards, with no downward revisions during the same period [10]. Conclusion - Given the positive momentum indicators and earnings outlook, Cullen/Frost Bankers is positioned as a strong buy candidate for investors seeking short-term opportunities [12].

Core Viewpoint - Cullen/Frost Bankers, Inc. will host a conference call on July 31, 2025, to discuss its second quarter 2025 earnings [1]. Group 1: Conference Call Details - The conference call will start at 1:00 p.m. Central Time (CT) and will be led 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]. Group 2: Access Information - The earnings release will be available online at approximately 8:00 a.m. CT on the same day [1]. - The live webcast can be accessed through the company's investor relations website, and it will be archived for playback after 5:00 p.m. CT [3]. - For those wishing to join via telephone, a domestic number is provided, and it is recommended to dial in 5 to 10 minutes early for efficient registration [4].

Company Overview - Cullen/Frost Bankers (CFR) is headquartered in San Antonio and operates in the Finance sector [3] - The stock has experienced a price change of -5.77% since the beginning of the year [3] Dividend Information - Cullen/Frost Bankers currently pays a dividend of $1 per share, resulting in a dividend yield of 3.16% [3] - This yield is significantly higher than the Banks - Southwest industry's yield of 1.33% and the S&P 500's yield of 1.6% [3] - The company's annualized dividend of $4 has increased by 7% from the previous year [4] - Over the past five years, the company has raised its dividend five times, averaging an annual increase of 7.80% [4] - The current payout ratio is 42%, indicating that 42% of its trailing 12-month earnings per share (EPS) is distributed as dividends [4] Earnings Growth Expectations - For the fiscal year, Cullen/Frost Bankers anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 at $9.24 per share, reflecting a year-over-year growth rate of 2.90% [5] Investment Appeal - The company presents a compelling investment opportunity due to its attractive dividend and strong Zacks Rank of 1 (Strong Buy) [7] - Income investors are particularly drawn to dividends for various reasons, including tax advantages and reduced overall portfolio risk [6]