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Cullen/Frost Bankers Inc

CULLEN/FROST REPORTS SECOND QUARTER RESULTS

Board declares third quarter dividend on common and preferred stock

SAN ANTONIO , July 31, 2025  /PRNewswire/ -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported second quarter 2025 results. Net income available to common shareholders for the second quarter of 2025 was $155.3 million compared to $143.8 million for the second quarter of 2024. On a per-share basis, net income available to common shareholders for the second quarter of 2025 was $2.39 per diluted common share, compared to $2.21 per diluted common share reported a year earlier. Returns on average assets and average common equity were 1.22 percent and 15.64 percent, respectively, for the second quarter of 2025 compared to 1.18 percent and 17.08 percent, respectively, for the same period a year earlier.

For the second quarter of 2025, net interest income on a taxable-equivalent basis was $450.6 million, up 7.9 percent compared to the same quarter in 2024. Average loans for the second quarter of 2025 increased $1.4 billion, or 7.2 percent, to $21.1 billion, from the $19.7 billion reported for the second quarter a year earlier, and increased $274.1 million, or 1.3 percent, compared to the first quarter of 2025. Average deposits for the second quarter increased $1.3 billion, or 3.1 percent, to $41.8 billion, compared to the $40.5 billion reported for last year's second quarter, and increased $102.4 million, or 0.2 percent, compared to the first quarter of 2025.

"Our strong performance in the second quarter demonstrates the durability of our organic growth model and is a testament to the consistent focus and execution of Frost bankers throughout the state and in every area of the company. We again posted solid loan growth, and despite the second quarter typically being a seasonally weak period for deposits, we saw a slight increase in average total deposits compared to the first quarter," said
Cullen/Frost Chairman and CEO Phil Green.

For the first six months of 2025, net income available to common shareholders was $304.6 million, up 9.6 percent compared to $277.9 million for the first six months of 2024. Diluted EPS available to common shareholders for the first six months of 2025 was $4.69 compared to $4.27 in the year-earlier period. Returns on average assets and average common equity for the first six months of 2025 were 1.20 percent and 15.59 percent, respectively, compared to 1.14 percent and 16.13 percent, respectively, for the same period in 2024.

Noted financial data for the second quarter of 2025 follows:

  • The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios at the end of the second quarter of 2025 were 13.98 percent, 14.43 percent and 15.88 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 $450.6 million for the second quarter of 2025, an increase of 7.9 percent, compared to $417.6 million for the second quarter of 2024. Net interest margin was 3.67 percent for the second quarter of 2025 compared to 3.54 percent for the second quarter of 2024 and 3.60 percent for the first quarter of 2025.
  • Non-interest income for the second quarter of 2025 totaled $117.3 million, an increase of $6.1 million, or 5.5 percent, from the $111.2 million reported for the second quarter of 2024. Trust and investment management fees increased $2.3 million, or 5.5 percent, compared to the second quarter of 2024. The increase in trust and investment management fees during the second quarter was primarily related to an increase in investment management fees (up $2.2 million). 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 $3.0 million, or 11.6 percent, compared to the second quarter of 2024. The increase in the second quarter was primarily related to increases in consumer and commercial overdraft charges (up $2.5 million), driven by continued increases in the number of active customer accounts, and commercial service charges (up $859,000), partly offset by a decrease in consumer service charges (down $370,000). Other charges, commissions, and fees increased $947,000, or 7.3 percent, compared to the second quarter of 2024. The increase was primarily related to increases in income from the placement of annuities (up $555,000) and commitment fees on unused lines of credit (up $380,000).
  • Non-interest expense was $347.1 million for the second quarter of 2025, up $30.2 million, or 9.5 percent, compared to the $317.0 million reported for the second quarter a year earlier. Salaries and wages expense increased $10.9 million, or 7.2 percent, compared to the second 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 $4.0 million, or 14.0 percent, compared to the second quarter of 2024. The increase in employee benefits expense was primarily related to increases in 401(k) plan expense (up $1.6 million), medical/dental benefits expense (up $1.4 million), and payroll taxes (up $635,000). Other non-interest expense increased $10.1 million, or 16.8 percent, compared to the second quarter of 2024. The increase included increases in advertising/promotions expense (up $4.2 million); sundry and other miscellaneous expense (up $2.1 million), and fraud losses (up $1.1 million), among other things. Technology, furniture, and equipment expense increased $4.6 million, or 12.9 percent, compared to the second quarter of 2024. The increase was primarily related to increased cloud services expense (up $2.6 million), software maintenance (up $1.3 million), and depreciation on furniture and equipment (up $732,000), among other things.
  • For the second quarter of 2025, the company reported a credit loss expense of $13.1 million, and reported net loan charge-offs of $11.2 million. This compares to a credit loss expense of $13.1 million and net charge-offs of $9.7 million for the first quarter of 2025 and a credit loss expense of $15.8 million and net charge-offs of $9.7 million for the second quarter of 2024. The allowance for credit losses on loans as a percentage of total loans was 1.31 percent at June 30, 2025, compared to 1.32 percent at March 31, 2025 and 1.28 percent at June 30, 2024. Non-accrual loans were $62.4 million at the end of the second quarter of 2025, compared to $83.5 million at the end of the first quarter of 2025 and $75.0 million at the end of the second quarter of 2024.

The Cullen/Frost board declared a third-quarter cash dividend of $1.00 per common share. The dividend on common stock is payable September 15, 2025 to shareholders of record on August 29 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 September 15, 2025 to shareholders of record on August 29 of this year.

Cullen/Frost Bankers, Inc. will host a conference call on Thursday, July 31, 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, August 3, 2025 at 1-877-660-6853 with Conference ID # of 13754258. 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 $51.4 billion in assets at June 30, 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 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 been significantly impacted by recent U.S. trade policies and practices. 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


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr

CONDENSED INCOME STATEMENTS










Net interest income

$ 429,604


$ 416,220


$ 413,518


$ 404,331


$ 396,712

Net interest income (1)

450,558


436,404


433,726


425,160


417,621

Credit loss expense

13,129


13,070


16,162


19,386


15,787

Non-interest income:










Trust and investment management fees

43,669


42,931


43,765


41,016


41,404

Service charges on deposit accounts

29,151


28,621


27,909


27,412


26,114

Insurance commissions and fees

13,879


21,019


14,215


14,839


13,919

Interchange and card transaction fees

5,619


5,402


5,764


5,428


5,351

Other charges, commissions, and fees

13,967


13,586


15,208


13,060


13,020

Net gain (loss) on securities transactions

—


(14)


(112)


16


—

Other

10,988


12,466


16,075


11,936


11,382

Total non-interest income

117,273


124,011


122,824


113,707


111,190











Non-interest expense:










Salaries and wages

162,149


160,857


165,520


156,637


151,237

Employee benefits

32,826


42,157


28,614


29,060


28,802

Net occupancy

34,640


33,277


32,102


32,497


32,374

Technology, furniture, and equipment

40,572


40,118


39,775


37,766


35,951

Deposit insurance

6,590


7,184


6,924


7,238


8,383

Other

70,351


64,473


63,232


60,212


60,217

Total non-interest expense

347,128


348,066


336,167


323,410


316,964

Income before income taxes

186,620


179,095


184,013


175,242


175,151

Income taxes

29,617


28,173


29,161


28,741


29,652

Net income

157,003


150,922


154,852


146,501


145,499

Preferred stock dividends

1,669


1,669


1,669


1,668


1,669

Net income available to common shareholders

$ 155,334


$ 149,253


$ 153,183


$ 144,833


$ 143,830











PER COMMON SHARE DATA










Earnings per common share - basic

$       2.39


$       2.30


$       2.37


$       2.24


$       2.21

Earnings per common share - diluted

2.39


2.30


2.36


2.24


2.21

Cash dividends per common share

1.00


0.95


0.95


0.95


0.92

Book value per common share at end of quarter

63.04


61.74


58.46


62.41


55.02











OUTSTANDING COMMON SHARES










Period-end common shares

64,319


64,283


64,197


63,931


63,989

Weighted-average common shares - basic

64,300


64,255


64,116


63,958


64,193

Dilutive effect of stock compensation

52


74


121


127


140

Weighted-average common shares - diluted

64,352


64,329


64,237


64,085


64,333











SELECTED ANNUALIZED RATIOS










Return on average assets

1.22 %


1.19 %


1.19 %


1.16 %


1.18 %

Return on average common equity

15.64


15.54


15.58


15.48


17.08

Net interest income to average earning assets

3.67


3.60


3.53


3.56


3.54











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

 

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)



2025


2024


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr

BALANCE SHEET SUMMARY










($ in millions)










Average Balance:










Loans

$   21,063


$   20,788


$   20,346


$   20,084


$   19,652

Earning assets

47,664


47,424


47,577


46,100


45,527

Total assets

51,191


50,925


51,008


49,467


48,960

Non-interest-bearing demand deposits

13,788


13,798


14,051


13,659


13,679

Interest-bearing deposits

27,972


27,860


27,834


27,074


26,831

Total deposits

41,760


41,658


41,885


40,733


40,510

Shareholders' equity

4,129


4,041


4,057


3,868


3,533











Period-End Balance:










Loans

$   21,254


$   20,904


$   20,755


$   20,055


$   19,996

Earning assets

47,756


48,409


48,878


47,424


45,344

Total assets

51,409


52,005


52,520


51,008


48,843

Total deposits

41,684


42,391


42,723


41,721


40,318

Shareholders' equity

4,200


4,114


3,899


4,135


3,666

Adjusted shareholders' equity (1)

5,341


5,243


5,151


5,051


4,975











ASSET QUALITY










($ in thousands)










Allowance for credit losses on loans:

$ 277,803


$ 275,488


$ 270,151


$ 263,129


$ 256,307

As a percentage of period-end loans

1.31 %


1.32 %


1.30 %


1.31 %


1.28 %











Net charge-offs:

$   11,151


$     9,691


$   13,962


$     9,640


$     9,726

Annualized as a percentage of average loans

0.21 %


0.19 %


0.27 %


0.19 %


0.20 %











Non-accrual loans:

$   62,393


$   83,534


$   78,866


$ 104,877


$   74,987

As a percentage of total loans

0.29 %


0.40 %


0.38 %


0.52 %


0.38 %

As a percentage of total assets

0.12


0.16


0.15


0.21


0.15











CONSOLIDATED CAPITAL RATIOS










Common Equity Tier 1 Risk-Based Capital Ratio

13.98 %


13.84 %


13.62 %


13.55 %


13.35 %

Tier 1 Risk-Based Capital Ratio

14.43


14.30


14.07


14.02


13.82

Total Risk-Based Capital Ratio

15.88


15.76


15.53


15.50


15.27

Leverage Ratio

8.98


8.84


8.63


8.80


8.62

Equity to Assets Ratio (period-end)

8.17


7.91


7.42


8.11


7.51

Equity to Assets Ratio (average)

8.07


7.94


7.95


7.82


7.22











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

 

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

(In thousands, except per share amounts)








Six Months Ended








June 30,








2025


2024

CONDENSED INCOME STATEMENTS










Net interest income







$ 845,824


$ 786,763

Net interest income (1)







886,963


828,988

Credit loss expense







26,199


29,437

Non-interest income:










Trust and investment management fees







86,600


80,489

Service charges on deposit accounts







57,772


50,909

Insurance commissions and fees







34,898


32,215

Interchange and card transaction fees







11,021


9,825

Other charges, commissions and fees







27,553


25,080

Net gain (loss) on securities transactions







(14)


—

Other







23,454


24,049

Total non-interest income







241,284


222,567











Non-interest expense:










Salaries and wages







323,006


299,237

Employee benefits







74,983


64,772

Net occupancy







67,917


64,152

Technology, furniture and equipment







80,690


70,946

Deposit insurance







13,774


23,107

Other







134,824


120,967

Total non-interest expense







695,194


643,181

Income before income taxes







365,715


336,712

Income taxes







57,790


55,523

Net income







307,925


281,189

Preferred stock dividends







3,338


3,338

Net income available to common shareholders







$ 304,587


$ 277,851











PER COMMON SHARE DATA










Earnings per common share - basic







$       4.69


$       4.27

Earnings per common share - diluted







4.69


4.27

Cash dividends per common share







$       1.95


$       1.84

Book value per common share at end of quarter







63.04


55.02











OUTSTANDING COMMON SHARES










Period-end common shares







64,319


63,989

Weighted-average common shares - basic







64,278


64,205

Dilutive effect of stock compensation







62


147

Weighted-average common shares - diluted







64,340


64,352











SELECTED ANNUALIZED RATIOS










Return on average assets







1.20 %


1.14 %

Return on average common equity







15.59


16.13

Net interest income to average earning assets







3.63


3.51











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

 

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)









As of or for the








Six Months Ended








June 30,








2025


2024

BALANCE SHEET SUMMARY










($ in millions)










Average Balance:










Loans







$   20,926


$   19,382

Earning assets







47,544


45,705

Total assets







51,064


49,142

Non-interest-bearing demand deposits







13,793


13,827

Interest-bearing deposits







27,916


26,790

Total deposits







41,709


40,617

Shareholders' equity







4,085


3,610











Period-End Balance:










Loans







$   21,254


$   19,996

Earning assets







47,756


45,344

Total assets







51,409


48,843

Total deposits







41,684


40,318

Shareholders' equity







4,200


3,666

Adjusted shareholders' equity (1)







5,341


4,975











ASSET QUALITY










($ in thousands)










Allowance for credit losses on loans:







$ 277,803


$ 256,307

As a percentage of period-end loans







1.31 %


1.28 %











Net charge-offs:







20,842


17,075

Annualized as a percentage of average loans







0.20 %


0.18 %











Non-accrual loans:







$   62,393


$   74,987

As a percentage of total loans







0.29 %


0.38 %

As a percentage of total assets







0.12


0.15











CONSOLIDATED CAPITAL RATIOS










Common Equity Tier 1 Risk-Based Capital Ratio







13.98 %


13.35 %

Tier 1 Risk-Based Capital Ratio







14.43


13.82

Total Risk-Based Capital Ratio







15.88


15.27

Leverage Ratio







8.98


8.62

Equity to Assets Ratio (period-end)







8.17


7.51

Equity to Assets Ratio (average)







8.00


7.35











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

 

Cullen/Frost Bankers, Inc.

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



2025


2024


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr

TAXABLE-EQUIVALENT YIELD/COST (1)










Earning Assets:










Interest-bearing deposits

4.41 %


4.39 %


4.71 %


5.32 %


5.40 %

Federal funds sold

4.71


4.79


5.16


5.65


5.78

Resell agreements

4.59


4.60


4.88


5.48


5.60

Securities(2)

3.79


3.63


3.44


3.40


3.38

Loans, net of unearned discounts

6.60


6.57


6.77


7.12


7.08

Total earning assets

5.07


4.99


5.05


5.26


5.23











Interest-Bearing Liabilities:










Interest-bearing deposits:










Savings and interest checking

0.24 %


0.24 %


0.29 %


0.38 %


0.39 %

Money market deposit accounts

2.28


2.27


2.47


2.80


2.83

Time accounts

3.86


3.97


4.32


4.73


4.77

Total interest-bearing deposits

1.93


1.94


2.14


2.41


2.39

Total deposits

1.29


1.30


1.42


1.60


1.58

Federal funds purchased

4.37


4.40


4.71


5.33


5.39

Repurchase agreements

3.23


3.13


3.34


3.72


3.75

Junior subordinated deferrable interest debentures

6.30


6.32


6.87


7.14


7.47

Subordinated notes payable and other notes

4.69


4.69


4.69


4.69


4.69

Total interest-bearing liabilities

2.12


2.12


2.32


2.60


2.59











Net interest spread

2.95


2.87


2.73


2.66


2.64

Net interest income to total average earning assets

3.67


3.60


3.53


3.56


3.54











AVERAGE BALANCES










($ in millions)










Assets:










Interest-bearing deposits

$   6,169


$   7,238


$   8,577


$   7,073


$   7,156

Federal funds sold

8


3


3


4


5

Resell agreements

23


10


11


41


85

Securities - carrying value(2)

20,401


19,384


18,640


18,898


18,629

Securities - amortized cost(2)

21,864


20,839


19,944


20,324


20,400

Loans, net of unearned discount

21,063


20,788


20,346


20,084


19,652

Total earning assets

$ 47,664


$ 47,424


$ 47,577


$ 46,100


$ 45,527











Liabilities:










Interest-bearing deposits:










Savings and interest checking

$   9,920


$   9,969


$   9,693


$   9,470


$   9,716

Money market deposit accounts

11,518


11,432


11,683


11,122


11,009

Time accounts

6,534


6,458


6,458


6,482


6,106

Total interest-bearing deposits

27,972


27,860


27,834


27,074


26,831

Total deposits

41,760


41,658


41,885


40,733


40,510

Federal funds purchased

25


18


24


20


40

Repurchase agreements

4,250


4,147


3,946


3,777


3,827

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

$ 32,471


$ 32,248


$ 32,027


$ 31,094


$ 30,921











(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

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/cullenfrost-reports-second-quarter-results-302517992.html

SOURCE Cullen/Frost Bankers, Inc.