Financial Data and Key Metrics Changes - In Q3 2025, Cullen/Frost Bankers, Inc. earned $172.7 million, or $2.67 per share, representing a 19.2% increase from $144.8 million, or $2.24 per share, in the same quarter last year [4] - Return on average assets and average common equity were 1.32% and 16.72%, respectively, compared to 1.16% and 15.48% in Q3 last year [4] Business Line Data and Key Metrics Changes - Average deposits increased to $42.1 billion, up 3.3% from $40.7 billion in Q3 last year, while average loans grew to $21.5 billion, a 6.8% increase from $20.1 billion in Q2 last year [5] - Consumer checking households grew by 5.4% year over year, marking the strongest quarter in new checking household growth since the post-Silicon Valley flight to safety [6] - The overall consumer real estate loan portfolio reached $3.5 billion, growing by $547 million year over year, or 18.7% [7] Market Data and Key Metrics Changes - Period-end commercial loans grew by 5.1% year over year, with energy loans up 17% and C&I loans up 6.8% [7] - New commercial relationships reached 3,082 year to date, setting the pace for the largest number of new relationships in a year [8] Company Strategy and Development Direction - The company continues to focus on organic growth through strategic expansion, which has generated positive results, with expansion deposits and loans standing at $2.9 billion and $2.1 billion, respectively [5] - Expansion locations contributed $0.09 of EPS accretion, with Houston 1.0 generating $0.14 per share [12] - The company is optimistic about its strategy and believes it is well-positioned to succeed in competitive markets [11] Management's Comments on Operating Environment and Future Outlook - Management noted increasing competition in the market but expressed confidence in their ability to compete effectively [29] - The company expects net interest income growth for the full year to fall in the range of 7% to 8%, with an anticipated improvement in net interest margin of about 12 to 15 basis points [18] - Credit quality remains strong, with non-performing assets declining to $47 million from $64 million last quarter [9] Other Important Information - The company utilized $69.3 million of its $150 million approved share repurchase plan to buy back approximately 549,000 shares [20] - The effective tax rate expectation for full year 2025 remains unchanged at 16% to 17% [19] Q&A Session Summary Question: Thoughts on NIM with Fed cuts coming - Management indicated that while Fed cuts may impact NIM, they expect it to remain relatively stable due to backbook repricing and upcoming maturities [24] Question: Expense growth moderation - Management is focused on reducing expense growth from high single digits to mid-single digits, but specific guidance for 2026 is not yet available [25] Question: Competitive pressures in the market - Management acknowledged increased competition but remains confident in their ability to compete effectively, citing a strong pipeline and customer relationships [28][30] Question: Capital generation and buyback strategy - Management clarified that stock buybacks do not indicate a lack of optimism for growth; rather, they are utilizing excess capital to benefit shareholders [43][44] Question: Loan growth trends and competition - Management noted that while competition exists, they expect to continue growing despite headwinds from commercial real estate paydowns [65][67]