Core Viewpoint - Cullen/Frost Bankers, Inc. (CFR) reported a strong first-quarter 2025 performance with earnings per share of $2.30, reflecting a 6.9% increase year-over-year, surpassing the Zacks Consensus Estimate by 5.9% [1][2] Financial Performance - The net income available to common shareholders was $149.3 million, up 11.4% from the prior-year quarter [2] - Total revenues reached $560.4 million, marking a 7.2% year-over-year increase and exceeding the Zacks Consensus Estimate by 1.8% [3] - Net interest income (NII) on a taxable-equivalent basis increased by 6.1% to $436.4 million year-over-year, while the net interest margin (NIM) expanded by 12 basis points to 3.60% [3] - Non-interest income improved by 11.3% year-over-year to $124 million, driven by increases in all components except for other non-interest income [4] Expenses and Credit Quality - Non-interest expenses rose by 6.7% year-over-year to $349.8 million, with a notable increase of 9.3% to $377.7 million when excluding special surcharge expenses related to FDIC insurance [5] - Credit loss expenses were recorded at $13.1 million, slightly down from $13.7 million in the prior-year quarter, but the allowance for credit losses on loans increased to 1.32% of total loans [7] Capital Ratios and Profitability - The Tier 1 risk-based capital ratio improved to 14.30%, up from 13.89% a year earlier, while the total risk-based capital ratio rose to 15.76% from 15.35% [8] - Return on average assets and return on average common equity were reported at 1.19% and 15.54%, respectively, compared to 1.09% and 15.22% in the prior-year quarter [9] Strategic Outlook - The company is well-positioned for revenue growth due to steady improvements in NII and non-interest income, supported by a solid capital position and efforts to expand in Texas markets [10]

Financial Performance - Net income available to common shareholders for Q1 2025 was $149.3 million, or $2.30 per diluted share, representing an increase of 11.4% from $134.0 million, or $2.06 per diluted share in Q1 2024[136] - Net income for the three months ended March 31, 2025 increased by $14.0 million, or 10.6%, compared to the same period in 2024[184] - Total assets reached $50.92 billion as of March 31, 2025, compared to $49.32 billion a year earlier[148] - Shareholders' equity rose to $4.04 billion in Q1 2025, compared to $3.69 billion in Q1 2024[148] Revenue Components - Net interest income for Q1 2025 was $416.2 million, up from $390.1 million in Q1 2024, driven by a $26.2 million increase[136] - Non-interest income increased to $124.0 million in Q1 2025 from $111.4 million in Q1 2024, reflecting a $12.6 million rise[136] - Total non-interest income increased by $12.6 million, or 11.3%, for the three months ended March 31, 2025, compared to the same period in 2024[161] - Non-interest income for the three months ended March 31, 2025 increased by $7.4 million, or 11.2%, driven by higher service charges on deposit accounts and increased insurance commissions[187] Expenses - Non-interest expense rose to $348.1 million in Q1 2025, compared to $326.2 million in Q1 2024, an increase of $21.8 million[136] - Total non-interest expense increased by $21.8 million, or 6.7%, for the three months ended March 31, 2025, compared to the same period in 2024[175] - Salaries and wages increased by $12.9 million, or 8.7%, for the three months ended March 31, 2025, due to annual merit increases and a rise in employee numbers[176] - Employee benefits expense rose by $6.2 million, or 17.2%, for the three months ended March 31, 2025, primarily due to increases in 401(k) plan expenses and payroll taxes[177] Interest Income and Yield - Net interest income represented 77.0% of total revenue during the first three months of 2025[139] - The average taxable-equivalent yield on loans decreased by 43 basis points to 6.57% during the three months ended March 31, 2025[152] - The average taxable-equivalent yield on securities increased by 31 basis points to 3.63% during the same period[154] - The net interest spread increased to 2.87% during the three months ended March 31, 2025, compared to 2.59% in the same period in 2024[157] Loans and Credit Quality - Loans increased by $149.1 million, or 0.7%, reaching $20.9 billion as of March 31, 2025[195] - The total allowance for credit losses on loans was $275.5 million as of March 31, 2025, representing 1.32% of total loans[210] - The allowance allocated to commercial and industrial loans increased by $6.7 million to $94.3 million, or 1.53% of total commercial and industrial loans[210] - The total past due loans increased to $133.9 million, with a past due percentage of 0.64% as of March 31, 2025[204] Economic Outlook - The March 2025 Baseline Scenario projects U.S. Nominal GDP growth rates of 4.67% for the remainder of 2025 and 4.41% through the first quarter of 2027[216] - The average annualized U.S. unemployment rate is projected to be 4.10% during the remainder of 2025 and 4.34% through the end of the forecast period[216] Dividends - Dividends per common share increased to $0.95 in Q1 2025 from $0.92 in Q1 2024[136] - The company paid a quarterly dividend of $0.95 per common share during Q1 2025, with a payout ratio of 41.3%, compared to $0.92 and a 44.6% payout ratio in Q1 2024[238] Interest Rate Environment - The Federal Reserve's target range for the federal funds rate was 4.25% to 4.50% as of March 31, 2025, with projections indicating a potential decrease to 3.9% by the end of 2025[144] - The average rate paid on interest-bearing liabilities decreased by 42 basis points to 2.12% during the three months ended March 31, 2025[156] Risk Management - The company’s hedging policies include the use of various derivative financial instruments to manage interest rate exposure[158] - Credit concentration overlays were implemented to address risks associated with large credit relationships within the loan portfolio[228]

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 ...