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Cullen/Frost Bankers Inc

CULLEN/FROST REPORTS FIRST QUARTER RESULTS

Board increases quarterly common dividend by 5.3 percent to $1.00

SAN 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 reported a year earlier. Returns on average assets and average common equity were 1.19 percent and 15.54 percent, respectively, for the first quarter of 2025 compared to 1.09 percent and 15.22 percent, respectively, for the same period a year earlier.

For the first quarter of 2025, net interest income on a taxable-equivalent basis was $436.4 million, up 6.1 percent compared to the same quarter in 2024. Average loans for the first quarter of 2025 increased $1.7 billion, or 8.8 percent, to $20.8 billion, from the $19.1 billion reported for the first quarter a year earlier, and increased $442.9 million, or 2.2 percent, compared to the fourth quarter of 2024. Average deposits for the first quarter increased $933.4 million, or 2.3 percent, to $41.7 billion, compared to the $40.7 billion reported for last year's first quarter, and decreased $227.5 million, or 0.5 percent, compared to the fourth quarter of 2024.

"In the first quarter we continued to see solid loan growth, and our deposit trends returned to our normal first quarter seasonality. We remain focused on generating continued, sustainable organic growth and expanding to offer the Frost experience to more customers throughout the state, and our strong first quarter results demonstrate that our strategy is working," said Cullen/Frost Chairman and CEO Phil Green.

"We continue to make investments in our own long-term growth, and those investments are bearing fruit. In the next month we plan to open our 199th location, in the Fort Worth region, and our 200th Frost location in Pflugerville, just north of Austin. At that point we will have increased our total location count by more than 50 percent since we launched our organic expansion program in December of 2018. I want to thank our dedicated employees who are overseeing these expansion efforts, and all of our employees who continue to be the driving force behind our company's performance."

Noted financial data for the first quarter of 2025 follows:

  • The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios at the end of the first quarter of 2025 were 13.84 percent, 14.30 percent and 15.76 percent, respectively, and continue to be in excess of well-capitalized levels and exceed Basel III minimum requirements.

  • Net interest income on a taxable-equivalent basis was $436.4 million for the first quarter of 2025, an increase of 6.1 percent, compared to $411.4 million for the first quarter of 2024. Net interest margin was 3.60 percent for the first quarter of 2025 compared to 3.48 percent for the first quarter of 2024 and 3.53 percent for the fourth quarter of 2024.

  • Non-interest income for the first quarter of 2025 totaled $124.0 million, an increase of $12.6 million, or 11.3 percent, from the $111.4 million reported for the first quarter of 2024. Trust and investment management fees increased $3.8 million, or 9.8 percent, compared to the first quarter of 2024. The increase in trust and investment management fees during the first quarter was primarily related to an increase in investment management fees (up $2.9 million) and estate fees (up $429,000). Investment management fees are generally based on the market value of assets within customer accounts and are thus impacted by price movements in the equity and bond markets. Service charges on deposit accounts increased $3.8 million, or 15.4 percent, compared to the first quarter of 2024. The increase in the first quarter was primarily related to increases in commercial and consumer overdraft charges (up $2.3 million), driven by continued increases in the number of active customer accounts, and commercial service charges (up $1.8 million). Insurance commissions and fees increased $2.7 million, or 14.9 percent, compared to the first quarter of 2024. The increase was mainly driven by an increase in benefit plan commissions (up $1.2 million), property and casualty commissions (up $675,000), and property and casualty contingent income (up $632,000).

  • Non-interest expense was $348.1 million for the first quarter of 2025, up $21.8 million, or 6.7 percent, compared to the $326.2 million reported for the first quarter a year earlier. Excluding the additional FDIC special assessment that we accrued during the first quarter of 2024, total non-interest expense during the first quarter of 2025 would have increased by $29.6 million, or 9.3 percent, compared to the same period last year. Salaries and wages expense increased $12.9 million, or 8.7 percent, compared to the first quarter of 2024. The increase in salaries and wages was primarily related to increases in salaries due to annual merit and market increases and to an increase in the number of employees. The increase in the number of employees was partly related to our investment in organic expansion in various markets. Employee benefits expense increased by $6.2 million, or 17.2 percent, compared to the first quarter of 2024. The increase in employee benefits expense was primarily related to increases in 401(k) plan expense (up $3.0 million), payroll taxes (up $1.8 million) and medical/dental benefits expense (up $1.5 million). Technology, furniture, and equipment expense increased $5.1 million, or 14.6 percent, compared to the first quarter of 2024. The increase was primarily related to increased cloud services expense (up $2.5 million), software maintenance (up $1.3 million), and depreciation on furniture and equipment (up $616,000), among other things. Other non-interest expense increased $3.7 million, or 6.1 percent, compared to the first quarter of 2024. The increase included increases in professional services expense (up $1.0 million); donations expense (up $1.0 million), primarily related to a donation to the Frost Charitable Foundation; and business development expense (up $556,000), among other things.

  • For the first quarter of 2025, the company reported a credit loss expense of $13.1 million, and reported net loan charge-offs of $9.7 million. This compares to a credit loss expense of $16.2 million and net loan charge-offs of $14.0 million for the fourth quarter of 2024 and a credit loss expense of $13.7 million and net loan charge-offs of $7.3 million for the first quarter of 2024. The allowance for credit losses on loans as a percentage of total loans was 1.32 percent at March 31, 2025, compared to 1.30 percent at December 31, 2024 and 1.29 percent at March 31, 2024. Non-accrual loans were $83.5 million at the end of the first quarter of 2025, compared to $78.9 million at the end of the fourth quarter of 2024 and $71.5 million at the end of the first quarter of 2024.

The Cullen/Frost board declared a second-quarter cash dividend of $1.00 per common share, representing a 5.3 percent increase compared to the previous quarterly dividend of $0.95 per share. The dividend on common stock is payable June 13, 2025 to shareholders of record on May 30 of this year. The board of directors also declared a cash dividend of $11.125 per share of Series B Preferred Stock (or $0.278125 per depositary share). The depositary shares representing the Series B Preferred Stock are traded on the NYSE under the symbol "CFR PrB." The Series B Preferred Stock dividend is payable June 16, 2025 to shareholders of record on May 30 of this year.

Cullen/Frost Bankers, Inc. will host a conference call on Thursday, May 1, 2025, at 1 p.m. Central Time (CT) to discuss the results for the quarter. The media and other interested parties are invited to access the call in a "listen only" mode at 1-877-709-8150 or via webcast on our investor relations website linked below. Playback of the conference call will be available after 5 p.m. CT on the day of the call until midnight Sunday, May 4, 2025 at 1-877-660-6853 with Conference ID # of 13753159. A replay of the call will also be available by webcast at the URL listed below after 5 p.m. CT on the day of the call.

Cullen/Frost investor relations website: https://investor.frostbank.com/

Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding company, headquartered in San Antonio, with $52.0 billion in assets at March 31, 2025. One of the 50 largest U.S. banks, Frost provides a wide range of banking, investments and insurance services to businesses and individuals across Texas in the Austin, Dallas, Fort Worth, Gulf Coast, Houston, Permian Basin, and San Antonio regions. Founded in 1868, Frost has helped clients with their financial needs during three centuries. Additional information is available at www.frostbank.com.

Forward-Looking Statements and Factors that Could Affect Future Results

Certain statements contained in this Earnings Release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the SEC, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of Cullen/Frost or its management or Board of Directors, including those relating to products, services or operations; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may," and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

  • The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board and the implementation of tariffs and other protectionist trade policies.
  • Inflation, interest rate, securities market, and monetary fluctuations.
  • Local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact.
  • Changes in the financial performance and/or condition of our borrowers.
  • Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs.
  • Changes in estimates of future credit loss reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.
  • Changes in our liquidity position.
  • Impairment of our goodwill or other intangible assets.
  • The timely development and acceptance of new products and services and perceived overall value of these products and services by users.
  • Changes in consumer spending, borrowing, and saving habits.
  • Greater than expected costs or difficulties related to the integration of new products and lines of business.
  • Technological changes.
  • The cost and effects of cyber incidents or other failures, interruptions, or security breaches of our systems or those of our customers or third-party providers.
  • Acquisitions and integration of acquired businesses.
  • Changes in the reliability of our vendors, internal control systems or information systems.
  • Our ability to increase market share and control expenses.
  • Our ability to attract and retain qualified employees.
  • Changes in our organization, compensation, and benefit plans.
  • The soundness of other financial institutions.
  • Volatility and disruption in national and international financial and commodity markets.
  • Changes in the competitive environment in our markets and among banking organizations and other financial service providers.
  • Government intervention in the U.S. financial system.
  • Political or economic instability.
  • Acts of God or of war or terrorism.
  • The potential impact of climate change.
  • The impact of pandemics, epidemics, or any other health-related crisis.
  • The costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals.
  • The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) and their application with which we and our subsidiaries must comply.
  • The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.
  • Our success at managing the risks involved in the foregoing items.

In addition, financial markets, international relations, and global supply chains have recently been significantly impacted by U.S. trade policies and practices including the implementation of targeted tariffs on imports and the subsequent 90-day pause on certain of those tariffs. Due to the rapidly evolving and changing state of U.S. trade policies, the amount and duration of any tariffs and their ultimate impact on us, our customers, financial markets, and the overall U.S. and global economies is currently uncertain. Nonetheless, prolonged uncertainty, elevated tariff levels or their wide-spread use in U.S. trade policy could weaken economic conditions and adversely impact the ability of borrowers to repay outstanding loans or the value of collateral securing these loans or adversely affect financial markets. To the extent that these risks may have a negative impact on the financial condition of borrowers or financial markets, it could also have a material adverse effect on our business, financial condition and results of operations.

Forward-looking statements speak only as of the date on which such statements are made. We do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

(In thousands, except per share amounts)












2025


2024


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


1st Qtr

CONDENSED INCOME STATEMENTS










Net interest income

$ 416,220


$ 413,518


$ 404,331


$ 396,712


$ 390,051

Net interest income (1)

436,404


433,726


425,160


417,621


411,367

Credit loss expense

13,070


16,162


19,386


15,787


13,650

Non-interest income:










Trust and investment management fees

42,931


43,765


41,016


41,404


39,085

Service charges on deposit accounts

28,621


27,909


27,412


26,114


24,795

Insurance commissions and fees

21,019


14,215


14,839


13,919


18,296

Interchange and card transaction fees

5,402


5,764


5,428


5,351


4,474

Other charges, commissions, and fees

13,586


15,208


13,060


13,020


12,060

Net gain (loss) on securities transactions

(14)


(112)


16


—


—

Other

12,466


16,075


11,936


11,382


12,667

  Total non-interest income

124,011


122,824


113,707


111,190


111,377











Non-interest expense:










Salaries and wages

160,857


165,520


156,637


151,237


148,000

Employee benefits

42,157


28,614


29,060


28,802


35,970

Net occupancy

33,277


32,102


32,497


32,374


31,778

Technology, furniture, and equipment

40,118


39,775


37,766


35,951


34,995

Deposit insurance

7,184


6,924


7,238


8,383


14,724

Other

64,473


63,232


60,212


60,217


60,750

  Total non-interest expense

348,066


336,167


323,410


316,964


326,217

Income before income taxes

179,095


184,013


175,242


175,151


161,561

Income taxes

28,173


29,161


28,741


29,652


25,871

Net income

150,922


154,852


146,501


145,499


135,690

Preferred stock dividends

1,669


1,669


1,668


1,669


1,669

Net income available to common shareholders

$ 149,253


$ 153,183


$ 144,833


$ 143,830


$ 134,021











PER COMMON SHARE DATA










Earnings per common share - basic

$       2.30


$       2.37


$       2.24


$       2.21


$       2.06

Earnings per common share - diluted

2.30


2.36


2.24


2.21


2.06

Cash dividends per common share

0.95


0.95


0.95


0.92


0.92

Book value per common share at end of quarter

61.74


58.46


62.41


55.02


54.36











OUTSTANDING COMMON SHARES










Period-end common shares

64,283


64,197


63,931


63,989


64,251

Weighted-average common shares - basic

64,255


64,116


63,958


64,193


64,216

Dilutive effect of stock compensation

74


121


127


140


156

Weighted-average common shares - diluted

64,329


64,237


64,085


64,333


64,372











SELECTED ANNUALIZED RATIOS










Return on average assets

1.19 %


1.19 %


1.16 %


1.18 %


1.09 %

Return on average common equity

15.54


15.58


15.48


17.08


15.22

Net interest income to average earning assets

3.60


3.53


3.56


3.54


3.48











(1) Taxable-equivalent basis assuming a 21% tax rate.

 

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)



2025


2024


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


1st Qtr

BALANCE SHEET SUMMARY










($ in millions)










Average Balance:










Loans

$   20,788


$   20,346


$   20,084


$   19,652


$   19,112

Earning assets

47,424


47,577


46,100


45,527


45,883

Total assets

50,925


51,008


49,467


48,960


49,324

Non-interest-bearing demand deposits

13,798


14,051


13,659


13,679


13,976

Interest-bearing deposits

27,860


27,834


27,074


26,831


26,748

Total deposits

41,658


41,885


40,733


40,510


40,724

Shareholders' equity

4,041


4,057


3,868


3,533


3,687











Period-End Balance:










Loans

$   20,904


$   20,755


$   20,055


$   19,996


$   19,388

Earning assets

48,409


48,878


47,424


45,344


46,164

Total assets

52,005


52,520


51,008


48,843


49,505

Total deposits

42,391


42,723


41,721


40,318


40,806

Shareholders' equity

4,114


3,899


4,135


3,666


3,638

Adjusted shareholders' equity (1)

5,243


5,151


5,051


4,975


4,914











ASSET QUALITY










($ in thousands)










Allowance for credit losses on loans:

$ 275,488


$ 270,151


$ 263,129


$ 256,307


$ 250,297

As a percentage of period-end loans

1.32 %


1.30 %


1.31 %


1.28 %


1.29 %











Net charge-offs:

$     9,691


$   13,962


$     9,640


$     9,726


$     7,349

Annualized as a percentage of average loans

0.19 %


0.27 %


0.19 %


0.20 %


0.15 %











Non-accrual loans:

$   83,534


$   78,866


$ 104,877


$   74,987


$   71,515

As a percentage of total loans

0.40 %


0.38 %


0.52 %


0.38 %


0.37 %

As a percentage of total assets

0.16


0.15


0.21


0.15


0.14











CONSOLIDATED CAPITAL RATIOS










Common Equity Tier 1 Risk-Based Capital Ratio

13.84 %


13.62 %


13.55 %


13.35 %


13.41 %

Tier 1 Risk-Based Capital Ratio

14.30


14.07


14.02


13.82


13.89

Total Risk-Based Capital Ratio

15.76


15.53


15.50


15.27


15.35

Leverage Ratio

8.84


8.63


8.80


8.62


8.44

Equity to Assets Ratio (period-end)

7.91


7.42


8.11


7.51


7.35

Equity to Assets Ratio (average)

7.94


7.95


7.82


7.22


7.47











(1) Shareholders' equity excluding accumulated other comprehensive income (loss).



Cullen/Frost Bankers, Inc.

TAXABLE-EQUIVALENT YIELD/COST AND AVERAGE BALANCES (UNAUDITED)



2025


2024


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


1st Qtr

TAXABLE-EQUIVALENT YIELD/COST (1)










Earning Assets:










Interest-bearing deposits

4.39 %


4.71 %


5.32 %


5.40 %


5.40 %

Federal funds sold

4.79


5.16


5.65


5.78


5.76

Resell agreements

4.60


4.88


5.48


5.60


5.60

Securities(2)

3.63


3.44


3.40


3.38


3.32

Loans, net of unearned discounts

6.57


6.77


7.12


7.08


7.00

Total earning assets

4.99


5.05


5.26


5.23


5.13











Interest-Bearing Liabilities:










Interest-bearing deposits:










Savings and interest checking

0.24 %


0.29 %


0.38 %


0.39 %


0.42 %

Money market deposit accounts

2.27


2.47


2.80


2.83


2.82

Time accounts

3.97


4.32


4.73


4.77


4.73

Total interest-bearing deposits

1.94


2.14


2.41


2.39


2.34

Total deposits

1.30


1.42


1.60


1.58


1.54

Federal funds purchased

4.40


4.71


5.33


5.39


5.38

Repurchase agreements

3.13


3.34


3.72


3.75


3.76

Junior subordinated deferrable interest debentures

6.32


6.87


7.14


7.47


7.34

Subordinated notes payable and other notes

4.69


4.69


4.69


4.69


4.69

Total interest-bearing liabilities

2.12


2.32


2.60


2.59


2.54











Net interest spread

2.87


2.73


2.66


2.64


2.59

Net interest income to total average earning assets

3.60


3.53


3.56


3.54


3.48











AVERAGE BALANCES










($ in millions)










Assets:










Interest-bearing deposits

$   7,238


$   8,577


$   7,073


$   7,156


$   7,356

Federal funds sold

3


3


4


5


5

Resell agreements

10


11


41


85


85

Securities - carrying value(2)

19,384


18,640


18,898


18,629


19,324

Securities - amortized cost(2)

20,839


19,944


20,324


20,400


20,813

Loans, net of unearned discount

20,788


20,346


20,084


19,652


19,112

Total earning assets

$ 47,424


$ 47,577


$ 46,100


$ 45,527


$ 45,883











Liabilities:










Interest-bearing deposits:










Savings and interest checking

$   9,969


$   9,693


$   9,470


$   9,716


$   9,918

Money market deposit accounts

11,432


11,683


11,122


11,009


11,058

Time accounts

6,458


6,458


6,482


6,106


5,773

Total interest-bearing deposits

27,860


27,834


27,074


26,831


26,748

Total deposits

41,658


41,885


40,733


40,510


40,724

Federal funds purchased

18


24


20


40


33

Repurchase agreements

4,147


3,946


3,777


3,827


3,787

Junior subordinated deferrable interest debentures

123


123


123


123


123

Subordinated notes payable and other notes

100


100


100


100


100

Total interest-bearing funds

$ 32,248


$ 32,027


$ 31,094


$ 30,921


$ 30,791











(1) Taxable-equivalent basis assuming a 21% tax rate.

(2) Average securities include unrealized gains and losses on securities available for sale while yields are based on average amortized cost.

A.B. Mendez
Investor Relations
210.220.5234

or

Bill Day
Media Relations
210.220.5427

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SOURCE Cullen/Frost Bankers, Inc.