Cullen/Frost Bankers(US:CFR)2025-10-30 19:14Financial 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].