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].

Core Viewpoint - The article presents a bullish case for Cullen/Frost (CFR), highlighting its high-quality deposit franchise and long-term investment potential [1]. Group 1: Company Overview - Cullen/Frost is characterized by a strong deposit franchise, which is essential for its financial stability and growth [1]. Group 2: Investment Strategy - The investment approach discussed emphasizes a long-term, buy-and-hold strategy, particularly favoring stocks that can consistently deliver high-quality earnings [1].

Core Viewpoint - Cullen/Frost Bankers, Inc. (CFR) reported a strong performance in Q4 2024, with earnings per share (EPS) of $2.36, reflecting an 8.3% increase year-over-year and surpassing the Zacks Consensus Estimate by 8.8% [1][2] Financial Performance - The net income available to common shareholders was $153.2 million, up from $100.9 million in the prior-year quarter [2] - Total revenues for Q4 2024 were $556.4 million, a 6.3% increase year-over-year, exceeding the Zacks Consensus Estimate by 2.3% [4] - For the full year 2024, revenues reached $2.15 billion, surpassing the Zacks Consensus Estimate by 0.9% and increasing by 3.4% year-over-year [4] Income and Expenses - Net interest income (NII) on a taxable-equivalent basis rose 2% to $433.7 million year-over-year, with a net interest margin (NIM) expansion of 12 basis points to 3.56% [5] - Non-interest income improved by 8% to $122.8 million year-over-year, driven by increases in all components except for other non-interest income [5] - Non-interest expenses decreased by 8% year-over-year to $336.2 million, although excluding special surcharge expenses, they increased by 7.2% [6] Loan and Deposit Growth - Total loans as of December 31, 2024, were $20.8 billion, reflecting a 3.5% sequential increase, while total deposits amounted to $42.7 billion, up 2.4% from the previous quarter [7] Credit Quality - Credit loss expenses were reported at $16.2 million, slightly up from $16 million in the prior-year quarter, with the allowance for credit losses on loans at 1.30%, down 1 basis point [8] - Net charge-offs as a percentage of average loans increased by 4 basis points year-over-year to 0.27% [8] Capital and Profitability Ratios - The Tier 1 risk-based capital ratio improved to 14.07% from 13.73% year-over-year, while the total risk-based capital ratio rose to 15.53% from 15.18% [9] - Return on average assets and return on average common equity were 1.19% and 15.58%, respectively, compared to 0.82% and 13.51% in the prior-year quarter [10] Strategic Positioning - The company is well-positioned for revenue growth due to steady improvement in loan balances and a solid capital position, with efforts to expand its presence in Texas markets appearing encouraging [12]

Core Insights - Cullen/Frost Bankers (CFR) reported a revenue of $556.44 million for the quarter ended December 2024, reflecting a year-over-year increase of 6.3% [1] - The earnings per share (EPS) for the quarter was $2.36, up from $2.18 in the same quarter last year, exceeding the consensus EPS estimate of $2.17 by 8.76% [1] - The reported revenue surpassed the Zacks Consensus Estimate of $544.02 million, resulting in a revenue surprise of 2.28% [1] Financial Metrics - Net loan charge-offs to average loans were reported at 0.3%, higher than the four-analyst average estimate of 0.2% [4] - Total earning assets averaged $47.58 billion, slightly above the four-analyst average estimate of $47.44 billion [4] - Net Interest Margin (FTE) was recorded at 3.5%, compared to the estimated 3.6% by four analysts [4] - Book value per common share at the end of the quarter was $58.46, below the three-analyst average estimate of $60.33 [4] - Total Non-Performing Loans/Non-accrual loans amounted to $78.87 million, significantly lower than the two-analyst average estimate of $97.31 million [4] - Total Non-Interest Income reached $122.82 million, exceeding the average estimate of $111.93 million based on four analysts [4] - Net Interest Income (FTE) was $433.73 million, slightly above the four-analyst average estimate of $432.09 million [4] - Other charges, commissions, and fees totaled $15.21 million, higher than the three-analyst average estimate of $12.97 million [4] - Insurance commissions and fees were reported at $14.22 million, compared to the average estimate of $13.60 million based on three analysts [4] - Trust and investment management fees reached $43.77 million, exceeding the three-analyst average estimate of $41.12 million [4] - Net Interest Income was $413.52 million, above the three-analyst average estimate of $410.97 million [4] - Service charges on deposit accounts totaled $27.91 million, surpassing the three-analyst average estimate of $26.48 million [4] Stock Performance - Shares of Cullen/Frost have returned +3.4% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - Cullen/Frost Bankers reported quarterly earnings of $2.36 per share, exceeding the Zacks Consensus Estimate of $2.17 per share, marking an earnings surprise of 8.76% [1][2] Financial Performance - The company achieved revenues of $556.44 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.28% and showing an increase from $523.66 million year-over-year [2] - Over the last four quarters, Cullen/Frost has consistently surpassed consensus EPS estimates and topped revenue estimates three times [2] Stock Performance - Cullen/Frost shares have increased approximately 3.4% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.03 on revenues of $538.29 million, and for the current fiscal year, it is $8.52 on revenues of $2.16 billion [7] - The estimate revisions trend for Cullen/Frost is favorable, which could influence future stock movements [6][5] Industry Context - The Banks - Southwest industry, to which Cullen/Frost belongs, is currently ranked in the top 4% of over 250 Zacks industries, suggesting a positive outlook for the sector [8]

Financial Performance - Net income available to common shareholders for Q4 2024 was $153.2 million, an increase of $52.3 million or 51.8% compared to $100.9 million in Q4 2023[2] - Fourth quarter diluted earnings per common share for 2024 was $2.36, up 52.3% from $1.55 in Q4 2023[2] - For the full year 2024, net income available to common shareholders was $575.9 million, a decrease of 2.6% from $591.3 million in 2023[4] - Net income available to common shareholders decreased to $575.9 million in 2024 from $591.3 million in 2023, a decline of 2.9%[23] - Earnings per common share (basic) for 2024 was $8.88, down from $9.11 in 2023, reflecting a decrease of 2.5%[23] Income and Expenses - Non-interest income for Q4 2024 was $122.8 million, an increase of $9.1 million or 8.0% from $113.8 million in Q4 2023[8] - Non-interest expense for Q4 2024 was $336.2 million, down $29.1 million or 8.0% compared to $365.2 million in Q4 2023[10] - Net interest income for Q4 2024 was $413,518,000, an increase from $404,331,000 in Q3 2024, reflecting a growth of 0.3%[19] - Net interest income for 2024 increased to $1,604.6 million, up from $1,558.7 million in 2023, representing a growth of 2.5%[23] - Total non-interest income rose to $459.1 million in 2024, compared to $428.5 million in 2023, marking an increase of 7.1%[23] Loans and Deposits - Average loans for Q4 2024 increased by $1.7 billion, or 9.3%, to $20.3 billion compared to $18.6 billion in Q4 2023[5] - Average deposits for Q4 2024 increased by $701.7 million, or 1.7%, to $41.9 billion compared to $41.2 billion in Q4 2023[5] - Total deposits reached $42,723,000,000 in Q4 2024, an increase from $41,721,000,000 in Q3 2024, reflecting a growth of 2.4%[21] - Total deposits as of December 31, 2024, were $42.7 billion, an increase from $41.9 billion in 2023, showing a growth of 1.9%[25] Credit Quality - The company reported a credit loss expense of $16.2 million for Q4 2024, compared to $19.4 million in Q3 2024[10] - The allowance for credit losses on loans increased to $270,151,000 in Q4 2024, up from $263,129,000 in Q3 2024, indicating a rise of 3.9%[21] - Non-accrual loans decreased to $78,866,000 in Q4 2024, down from $104,877,000 in Q3 2024, a reduction of 25%[21] - The allowance for credit losses on loans increased to $270.2 million, up from $246.0 million in 2023, indicating a rise of 9.3%[25] - Non-accrual loans increased to $78.9 million, compared to $60.9 million in 2023, representing a growth of 29.6%[25] Capital Ratios - The Tier 1 Risk-Based Capital Ratio was 14.07% in Q4 2024, compared to 14.02% in Q3 2024, indicating a slight improvement[21] - Common Equity Tier 1 Risk-Based Capital Ratio improved to 13.62% in 2024 from 13.25% in 2023, an increase of 2.8%[25] - The leverage ratio increased to 8.63% in 2024, up from 8.35% in 2023, indicating a strengthening of capital position[25] Shareholder Returns - The board declared a first-quarter cash dividend of $0.95 per common share, payable on March 14, 2025[11] - The company authorized a $150 million stock repurchase program, expiring on January 28, 2026[12] Book Value - The book value per common share at the end of Q4 2024 was $58.46, down from $62.41 in Q3 2024, a decrease of 6.3%[19] - Book value per common share at the end of the quarter rose to $58.46, compared to $55.64 in 2023, reflecting an increase of 3.3%[23]

Core Insights - Cullen/Frost Bankers, Inc. reported a net income of $153.2 million for Q4 2024, an increase of $52.3 million from $100.9 million in Q4 2023, with adjusted earnings per diluted share rising to $2.36 from $1.55 [1][2][15] - The company declared a first-quarter cash dividend of $0.95 per common share and authorized a $150 million stock repurchase program [6][7] Financial Performance - For Q4 2024, net interest income was $433.7 million, up 5.8% from $409.9 million in Q4 2023, with average loans increasing by $1.7 billion, or 9.3%, to $20.3 billion [3][5] - Annual net income available to common shareholders for 2024 was $575.9 million, a decrease of 2.6% from $591.3 million in 2023 [2][17] - The company’s return on average assets and average common equity for Q4 2024 were 1.19% and 15.58%, respectively, compared to 0.82% and 13.51% in Q4 2023 [1][15] Capital and Asset Quality - As of December 31, 2024, the Common Equity Tier 1, Tier 1, and Total Risk-Based Capital Ratios were 13.62%, 14.07%, and 15.53%, respectively, exceeding Basel III requirements [5][16] - The allowance for credit losses on loans was 1.30% of total loans at year-end 2024, with non-accrual loans totaling $78.9 million [6][19] Dividends and Share Repurchase - The board declared a cash dividend of $11.125 per share of Series B Preferred Stock, payable on March 17, 2025 [6][7] - The new share repurchase program allows for the purchase of up to $150 million of common stock over one year, expiring January 28, 2026 [7][8] Operational Highlights - Average total deposits for 2024 were $41.0 billion, down 1.1% from $41.4 billion in 2023, while average total loans increased by 10.7% [4][18] - Non-interest income for Q4 2024 was $122.8 million, an increase of 8.0% from $113.8 million in Q4 2023, driven by higher trust and investment management fees [5][13]

Group 1 - US regional banks exhibit significant variability in loan and deposit growth prospects as well as credit quality, influenced by their geographic locations [1] Group 2 - Elliott Gue is recognized as a leading energy strategist with extensive experience in the energy sector, having contributed to various publications and media outlets [2] - The Energy & Income Advisor, launched by Elliott Gue, focuses on identifying profitable opportunities in the energy sector, including growth stocks and high-yielding utilities [2]

Cullen/Frost Bankers (CFR) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on J ...

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Even though momentum is a popular stock char ...