Financial Data and Key Metrics Changes - In Q1 2025, CullenFrost earned $149.3 million or $2.3 per share, compared to $134 million or $2.06 per share in the same quarter last year, representing a year-over-year increase in earnings [5] - Return on average assets and average common equity were 1.19% and 15.54% respectively, compared to 1.09% and 15.22% in the same quarter last year [6] - Average deposits increased by 2.3% to $41.7 billion from $40.7 billion year-over-year, while average loans grew by 8.8% to $20.8 billion from $19.1 billion [6] Business Line Data and Key Metrics Changes - Average consumer deposits, making up 47% of the deposit base, grew by 3.8% year-over-year, while average consumer loan balances increased by 20.5% [8] - In the commercial business, average loan balances grew by $1.1 billion or 6.6% year-over-year, with commercial real estate (CRE) balances increasing by 8.9% and energy balances by 19.8% [11] - The company recorded 972 new commercial relationships in Q1, an 18% increase over the same quarter last year [13] Market Data and Key Metrics Changes - The overall expansion efforts generated $2.64 billion in deposits and $1.9 billion in loans, exceeding goals by 402% and 27% respectively [7] - The net unrealized loss on the available-for-sale portfolio decreased to $1.4 billion from $1.56 billion in the previous quarter [19] Company Strategy and Development Direction - The company continues to focus on organic growth, with plans to open its 200th financial center in the Austin region [6] - The strategy is described as durable and scalable, driving strong growth in the consumer banking business [8] - The company aims to maintain a conservative underwriting approach while exploring new opportunities in commercial lending [75] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability of businesses to pass on costs to customers despite economic uncertainties [39] - The company expects net interest income growth for the full year to fall in the range of 5% to 7%, an increase from prior guidance of 4% to 6% [23] - Management noted that consumer spending remains stable, supported by job growth in Texas [68] Other Important Information - The company has increased its dividend, demonstrating confidence in its financial position [49] - The insurance commissions and fees were up $6.8 million, with 80% of the growth attributed to net new business [82] Q&A Session Summary Question: How should we think about the deposit beta on interest-bearing deposits? - Management indicated that the cumulative beta is about 47%, with expectations that it will hold steady as rate cuts occur [31] Question: What is the trajectory of expenses for the full year? - Management expects expenses to be in the high single digits for the next three quarters, influenced by prior assessments [33] Question: What is the sentiment among commercial customers regarding investments? - Management noted that customers are looking for clarity before making decisions, but there is a high degree of confidence in their ability to manage costs [38] Question: Why is the loan growth outlook unchanged despite a strong pipeline? - Management explained that headwinds from CRE payoffs are affecting loan growth guidance, despite a strong pipeline of new opportunities [43] Question: What is the outlook for non-interest income growth? - Management expressed optimism for non-interest income growth driven by increased relationships and volume, particularly in insurance and mortgage [109]

Financial Data and Key Metrics Changes - In Q1 2025, Cullen/Frost earned $149.3 million or $2.3 per share, compared to $134 million or $2.06 per share in the same quarter last year, representing a year-over-year increase in earnings [4] - Return on average assets and average common equity were 1.19% and 15.54% respectively, compared to 1.09% and 15.22% in the same quarter last year [5] - Average deposits increased by 2.3% to $41.7 billion from $40.7 billion year-over-year, while average loans grew by 8.8% to $20.8 billion from $19.1 billion [5] Business Line Data and Key Metrics Changes - Average consumer deposits, making up 47% of the deposit base, grew by 3.8% year-over-year, while average consumer loan balances increased by 20.5% [7][8] - In the commercial banking sector, average loan balances grew by $1.1 billion or 6.6% year-over-year, with commercial real estate (CRE) balances increasing by 8.9% and energy balances by 19.8% [10] - New loan commitments totaled $1.28 billion in Q1 2025, up 1.5% from $1.26 billion in Q1 2024 [10] Market Data and Key Metrics Changes - The overall expansion efforts generated $2.64 billion in deposits and $1.9 billion in loans, exceeding goals by 27% and 402% respectively [6] - Non-performing assets declined to $85 million at the end of Q1 2025 from $93 million at year-end, representing 41 basis points of period-end loans [12] Company Strategy and Development Direction - The company continues to focus on organic growth and expansion, with plans to open its 200th financial center in the Austin region [5][6] - The strategy has resulted in a 50% increase in financial centers since late 2018, with ongoing identification of new Texas locations for expansion [6] - The company aims for its expansion efforts to be accretive to earnings beginning in 2026 [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the consumer banking business, citing strong customer satisfaction and a leading position in Texas for consumer banking satisfaction [8] - The company anticipates net interest income growth for the full year 2025 to be in the range of 5% to 7%, up from prior guidance of 4% to 6% [23] - Management noted that while some commercial customers are cautious, there is a high degree of confidence in their ability to pass on costs to consumers [37] Other Important Information - The net interest margin increased by 7 basis points to 3.6% due to higher yielding taxable securities and loans [18] - The investment portfolio averaged $19.4 billion during Q1 2025, with a net unrealized loss of $1.4 billion, a decrease from the previous quarter [19] - The company recorded a 15% year-over-year increase in insurance commissions, driven by better alignment with the commercial banking group [81] Q&A Session Summary Question: How should we think about the deposit beta on interest-bearing deposits? - The cumulative beta is about 47%, with spot beta around 50%, expected to hold as rate cuts occur [30] Question: What is the trajectory for expenses throughout the year? - Expenses are expected to be in the high single digits, with technology costs continuing to rise [32][34] Question: What is the sentiment among commercial customers regarding investments? - Some customers are waiting for clarity on tariffs and costs, but there is a high level of confidence in passing costs along [37] Question: Why is the loan growth guidance unchanged despite a strong pipeline? - Headwinds from commercial real estate payoffs are affecting loan growth, despite a strong pipeline [43] Question: What is the outlook for non-interest income growth? - Non-interest income growth is expected to be driven by increased volume from new relationships and insurance commissions [108]

Core Insights - Cullen/Frost Bankers (CFR) reported revenue of $560.42 million for Q1 2025, a year-over-year increase of 7.2% and exceeding the Zacks Consensus Estimate of $550.38 million by 1.82% [1] - The earnings per share (EPS) for the same quarter was $2.30, up from $2.15 a year ago, and also surpassed the consensus EPS estimate of $2.17 by 5.99% [1] Financial Metrics - Net loan charge-offs to average loans were 0.2%, better than the estimated 0.3% [4] - Total earning assets averaged $47.42 billion, slightly below the average estimate of $47.91 billion [4] - Net Interest Margin (FTE) was reported at 3.6%, matching the three-analyst average estimate [4] - Total Non-Performing Loans were $83.53 million, higher than the average estimate of $79.87 million [4] - Book value per common share at the end of the quarter was $61.74, exceeding the estimated $60.28 [4] - Total Non-Interest Income reached $124.01 million, surpassing the average estimate of $117.23 million [4] - Net Interest Income (FTE) was $436.40 million, slightly above the average estimate of $433.15 million [4] - Service charges on deposit accounts totaled $28.62 million, exceeding the estimated $26.79 million [4] - Net Interest Income was reported at $416.22 million, below the average estimate of $417.56 million [4] - Insurance commissions and fees were $21.02 million, higher than the estimated $18.29 million [4] - Trust and investment management fees reached $42.93 million, exceeding the average estimate of $41.20 million [4] - Other charges, commissions, and fees totaled $13.59 million, slightly above the estimated $13.38 million [4] Stock Performance - Shares of Cullen/Frost have returned -6.6% over the past month, compared to the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Cullen/Frost Bankers (CFR) came out with quarterly earnings of $2.30 per share, beating the Zacks Consensus Estimate of $2.17 per share. This compares to earnings of $2.15 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 5.99%. A quarter ago, it was expected that this financial holding company would post earnings of $2.17 per share when it actually produced earnings of $2.36, delivering a surprise of 8.76%.Over the last four qu ...

Financial Performance - Net income available to common shareholders for Q1 2025 was $149.3 million, up from $134.0 million in Q1 2024, representing a 11.8% increase[2] - Net income per diluted common share for Q1 2025 was $2.30, compared to $2.06 in Q1 2024, reflecting an increase of 11.6%[2] - Net income available to common shareholders for Q1 2025 was $149.25 million, compared to $153.18 million in Q4 2024, showing a decrease of 2.0%[17] - Earnings per common share (basic) for Q1 2025 was $2.30, slightly down from $2.37 in Q4 2024, a decline of 3.0%[17] Loan and Deposit Growth - Average loans increased by $1.7 billion, or 8.8%, to $20.8 billion in Q1 2025 compared to $19.1 billion in Q1 2024[3] - Average deposits rose by $933.4 million, or 2.3%, to $41.7 billion in Q1 2025 from $40.7 billion in Q1 2024[3] - Total deposits as of Q1 2025 were $41.66 billion, a slight decrease from $41.89 billion in Q4 2024, down by 0.5%[19] - Total deposits reached $41.658 billion in Q1 2025, a slight decrease from $41.885 billion in Q4 2024[20] Income and Expenses - Net interest income on a taxable-equivalent basis was $436.4 million for Q1 2025, a 6.1% increase from $411.4 million in Q1 2024[5] - Non-interest income totaled $124.0 million in Q1 2025, up $12.6 million, or 11.3%, from $111.4 million in Q1 2024[5] - Non-interest expense was $348.1 million for Q1 2025, an increase of $21.8 million, or 6.7%, compared to $326.2 million in Q1 2024[7] Credit and Capital Ratios - The company reported a credit loss expense of $13.1 million in Q1 2025, compared to $13.7 million in Q1 2024[8] - The allowance for credit losses on loans increased to $275.49 million in Q1 2025, up from $270.15 million in Q4 2024, reflecting a rise of 2.5%[19] - The Common Equity Tier 1 Risk-Based Capital Ratio improved to 13.84% in Q1 2025, compared to 13.62% in Q4 2024, an increase of 0.22 percentage points[19] Dividends and Expansion - The board declared a cash dividend of $1.00 per common share for Q2 2025, a 5.3% increase from the previous dividend of $0.95[9] - Cullen/Frost plans to open its 199th and 200th locations in Fort Worth and Pflugerville, respectively, marking a more than 50% increase in total locations since December 2018[5] Asset and Yield Metrics - Total earning assets averaged $47.424 billion in Q1 2025, slightly down from $47.577 billion in Q4 2024[20] - Interest-bearing deposits yield decreased to 4.39% in Q1 2025 from 5.40% in Q2 2024[20] - The yield on loans decreased to 6.57% in Q1 2025 from 6.77% in Q4 2024[20] - Total interest-bearing deposits yield decreased to 1.94% in Q1 2025 from 2.14% in Q4 2024[20] Other Financial Metrics - Non-accrual loans as a percentage of total loans were 0.40% in Q1 2025, slightly up from 0.38% in Q4 2024[19] - The return on average assets remained stable at 1.19% for both Q1 2025 and Q4 2024[17] - The book value per common share at the end of Q1 2025 was $61.74, an increase from $58.46 in Q4 2024, reflecting a growth of 3.9%[17] - Net interest spread improved to 2.87% in Q1 2025 compared to 2.73% in Q4 2024[20] - Total interest-bearing liabilities increased to $32.248 billion in Q1 2025 from $32.027 billion in Q4 2024[20] - Loans, net of unearned discounts, rose to $20.788 billion in Q1 2025, up from $20.346 billion in Q4 2024[20] - Securities carrying value increased to $19.384 billion in Q1 2025 from $18.640 billion in Q4 2024[20] - Federal funds sold remained stable at an average of $3 million in Q1 2025, consistent with Q4 2024[20]

Board increases quarterly common dividend by 5.3 percent to $1.00SAN ANTONIO, May 1, 2025 /PRNewswire/ -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported first quarter 2025 results. Net income available to common shareholders for the first quarter of 2025 was $149.3 million compared to $134.0 million for the first quarter of 2024. On a per-share basis, net income available to common shareholders for the first quarter of 2025 was $2.30 per diluted common share, compared to $2.06 per diluted common share ...

One bank that I have been a bit neutral on over the last year or so is Cullen/Frost Bankers, Inc. ( CFR ). With a market capitalization as of this writing of $7.19 billion, the enterprise is one ofCrude Value Insights offers you an investing service and community focused on oil and natural gas. We focus on cash flow and the companies that generate it, leading to value and growth prospects with real potential.Subscribers get to use a 50+ stock model account, in-depth cash flow analyses of E&P firms, and live ...

Core Viewpoint - Cullen/Frost Bankers, Inc. will host a conference call on May 1, 2025, to discuss its first 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, Chairman and CEO, Daniel J. Geddes, Group Executive Vice President and CFO, and A.B. Mendez, Senior Vice President and Director of Investor Relations [2] - A question and answer session will follow the prepared remarks, allowing analysts to engage with the executives [2] - Interested individuals can listen to the call via a provided telephone number or through a live webcast [3] Group 2: Access Information - The domestic telephone number for the conference call is 877-709-8150 [3] - The webcast will be archived and available for playback after 5:00 p.m. CT on the day of the call [3] - It is recommended that participants dial in 5 to 10 minutes early for efficient registration [4]

Core Insights - Frost Bank has achieved the highest ranking for retail banking customer satisfaction in Texas for 16 consecutive years according to the J.D. Power 2025 U.S. Retail Banking Satisfaction Study [1][3] - The bank scored an overall satisfaction index of 745, which is 68 points higher than the Texas region average [2] Customer Satisfaction Rankings - Frost Bank ranked No. 1 in six out of seven dimensions in the J.D. Power study: trust, people, account offerings, customer banking flexibility, time and money savings, and digital channels [2][3] - The J.D. Power study is recognized as the leading survey of consumer banking satisfaction in the United States, involving 110,000 customers [3] Company Overview - Frost Bank is a subsidiary of Cullen/Frost Bankers, Inc., which has $52.5 billion in assets as of December 31, 2024 [4] - The bank provides a comprehensive range of banking, investments, and insurance services across multiple regions in Texas [4]

Financial Performance and Position - Cullen/Frost had consolidated total assets of $52.5 billion as of December 31, 2024[17]. - Frost Bank, the principal operating subsidiary, reported total deposits of $43.1 billion at the same date[23]. - The estimated fair value of trust assets managed by Frost Bank was $51.4 billion, including managed assets of $26.2 billion and custody assets of $25.2 billion[25]. - The total amount of stock dividends received from the Federal Reserve by Frost Bank was $1.5 million in 2024, $1.4 million in 2023, and $1.2 million in 2022[39]. - Cullen/Frost could pay aggregate dividends of approximately $1.2 billion to Cullen/Frost without obtaining affirmative governmental approvals at December 31, 2024[47]. - As of December 31, 2024, Frost Bank was classified as "well capitalized" with a total risk-based capital ratio of 10.0% or greater, a CET1 capital ratio of 6.5% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, and a leverage ratio of 5.0% or greater[67]. Regulatory Compliance and Risks - Cullen/Frost is subject to extensive regulation under federal and state laws, impacting its operational flexibility[35]. - Cullen/Frost and Frost Bank are required to maintain a minimum Common Equity Tier 1 (CET1) ratio of 7.0% to comply with Basel III Capital Rules[59]. - The Federal Reserve Board requires prior approval for any acquisition of more than 5.0% of the voting shares of a commercial bank by a bank holding company[46]. - Cullen/Frost must comply with liquidity requirements, including maintaining an adequate level of unencumbered high-quality liquid assets[62]. - The Federal Reserve Board may impose limitations on a financial holding company's activities if it fails to meet capital and management requirements[45]. - The Basel III Capital Rules require a minimum Tier 1 capital ratio of 8.5% when including the capital conservation buffer[59]. - The Federal Reserve Board's policy restricts bank holding companies from paying dividends that exceed net income available to common shareholders over the past year[48]. - The FDIC requires certain insured depository institutions with over $50 billion in assets, including Frost Bank, to submit periodic resolution plans, with new amendments effective October 1, 2024[76]. - The Dodd-Frank Act mandates enhanced prudential standards for systemically important financial institutions, requiring a risk committee for bank holding companies with total consolidated assets of $50 billion or more[75]. - The FDIA prohibits undercapitalized institutions from making capital distributions or paying management fees, and requires them to submit a capital restoration plan[65]. - The FDIC has the authority to terminate deposit insurance if an institution is found to be in unsafe or unsound condition[72]. - The FDIC's assessment rates for deposit insurance are based on average total assets minus average tangible equity, with larger institutions subject to performance and loss-severity scores[71]. - The Volcker Rule restricts banks from engaging in proprietary trading and investing in hedge funds, but does not significantly impact Frost Bank's operations[77]. Business Strategy and Growth - Cullen/Frost aims to grow fee-based income and expand through both organic growth and potential acquisitions[20]. - The company evaluates merger and acquisition opportunities to enhance profitability and market presence[20]. - The company serves a diverse range of industries, including energy, healthcare, and telecommunications, without dependence on any single industry[19]. - Cullen/Frost's common stock is listed on the New York Stock Exchange under the symbol "CFR"[37]. Employee and Community Engagement - As of December 31, 2024, the company employed 5,854 full-time equivalent employees, with an average tenure of 9.3 years[105]. - The company was recognized on Forbes magazine's Best Employers list in 2024, reflecting its commitment to employee relations and corporate culture[106]. - The company is dedicated to providing a supportive workplace free of discrimination, promoting equal opportunity for all employees[107]. - In 2024, employees contributed over 24,000 hours to community service activities, reflecting the company's commitment to community engagement[108]. - The company has established a voluntary, employee-led team focused on improving community lives, enhancing employee engagement and satisfaction[108]. Credit and Market Risks - As of December 31, 2024, approximately 82.9% of the loan portfolio consisted of commercial and industrial, energy, construction, and commercial real estate mortgage loans, which are generally viewed as having a higher risk of default[117]. - Commercial real estate mortgage loans comprised approximately 34.5% of the loan portfolio as of December 31, 2024, indicating a significant exposure to credit risk in this sector[120]. - The company had $1.1 billion in energy loans, representing approximately 5.4% of the loan portfolio, highlighting potential volatility risks associated with crude oil prices[121]. - The company is subject to interest rate risk, which could adversely affect net interest income and overall earnings if interest rates on deposits rise faster than those on loans[114]. - The allowance for credit losses is subject to significant estimates and may require increases based on changing economic conditions, which could negatively impact net income[118]. - The company faces liquidity risk, which could be affected by downturns in the Texas economy or adverse regulatory actions[123]. - The company’s credit exposures are concentrated in industries susceptible to long-term risks from climate change and economic disruptions, which could adversely affect financial performance[116]. - As of December 31, 2024, approximately 54% of the company's deposits were uninsured, which poses a risk to liquidity[124]. - The company has experienced significant unrealized losses in its available-for-sale securities portfolio due to rising market interest rates, impacting book capital and tangible common equity[125]. Operational and Technological Risks - The company is subject to operational risks from potential failures in its analytical and forecasting models, which could lead to unexpected losses[126]. - The company has implemented a new residential mortgage product, but there are substantial risks and uncertainties associated with new product offerings[129]. - The financial services industry is undergoing rapid technological changes, and the company's success depends on its ability to adapt to these changes[130]. - Cybersecurity threats remain a significant concern, with potential breaches leading to operational disruptions and reputational damage[138]. - The company relies on external vendors for essential services, which introduces operational and cybersecurity risks[141]. - The company faces risks related to external vendors not performing according to service level agreements, which could disrupt operations and adversely affect financial condition[142]. - The company relies on accurate customer information for credit decisions, and reliance on misleading data could materially impact financial results[146]. Competitive and Economic Environment - Economic conditions in Texas significantly affect the company's profitability, with local market conditions impacting demand for products and customer repayment ability[147]. - The company operates in a highly competitive environment, facing competition from larger banks and fintechs, which may lead to pricing pressures[151]. - Regulatory scrutiny and compliance costs are increasing, potentially affecting profitability and operational flexibility[155]. - The repeal of federal prohibitions on interest payments on demand deposits could increase interest expenses and decrease net interest margins[157]. - Potential acquisitions may disrupt business operations and dilute shareholder value, with risks including exposure to unknown liabilities and asset quality issues[161]. - Regulatory approvals for acquisitions have become more difficult to obtain, which could impede strategic growth opportunities[163]. - The trading volume of the company's common stock is lower than that of larger financial services companies, which may lead to price volatility[165]. - The company has historically declared cash dividends on its common stock but is not obligated to continue doing so, which could negatively impact stock prices[166]. - The company's ability to declare dividends is subject to federal regulatory considerations, including capital adequacy guidelines[167]. - Economic conditions, including inflation and interest rates, are impacting profitability and could affect loan demand and credit quality[171]. - The U.S. government's budget deficit and potential political conflicts may increase the risk of default on government debt, affecting the company's investment securities[172]. - Climate change poses operational, credit, legal, and reputational risks that could adversely impact the company's business and financial condition[184]. - The company may need to raise additional capital in the future, which could be challenging depending on market conditions and financial health[175]. - Stock price volatility may hinder the ability to resell common stock at attractive prices, influenced by various market factors[178]. - Changes in accounting standards could materially impact the company's financial statements and reporting[180]. - The company faces intense competition for skilled personnel, which could affect its operational effectiveness and customer relationships[181].