Cullen/Frost Bankers, Inc.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 30 October 2025: press release. Guidance figures: 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net income and EPS rose: Net income available to common shareholders was $172.7 million, or $2.67 per diluted share, compared with $144.8 million, or $2.24, a year earlier. Source
• Net interest income up 9.1 percent: Taxable-equivalent net interest income increased 9.1 percent year over year, on the taxable-equivalent basis assuming a 21 percent tax rate. Source
• Non-interest income up 10.5 percent: Non-interest income totaled $125.6 million, up $11.9 million year over year, with increases across trust, service charge and other fee lines. Source
• Non-interest expense up 9.0 percent: Non-interest expense totaled $352.5 million. The company attributes the growth to salaries, employee benefits and technology costs. Source
• Average loans up sequentially: Average loans rose $389.2 million from the second quarter, or 1.8 percent, the company reported. Source
• Average deposits up sequentially: Average deposits rose $310.9 million from the second quarter, or 0.7 percent, as seasonal deposit flows began in the back half of the year. Source
• Allowance held at 1.31 percent: The allowance for credit losses on loans was 1.31 percent of total loans, unchanged from June 30 and from a year earlier. Source

“In the third quarter, our business saw continued steady loan growth as well as the beginning of our usual seasonal strength in deposit flows in the back half of the year.”

Cullen/Frost Chairman and CEO Phil Green

Guidance

Results and earnings per share

• Net income and EPS rose: Net income available to common shareholders was $172.7 million, or $2.67 per diluted share, compared with $144.8 million, or $2.24, a year earlier. Source
• Nine-month net income up 12.9 percent: Nine-month net income available to common shareholders reached $477.3 million, with diluted EPS of $7.36 against $6.51 in the first nine months of 2024. Source
• Returns on equity and assets improved: Return on average common equity was 16.72 percent and return on average assets was 1.32 percent, up from 15.48 and 1.16 percent a year earlier. Source

Net interest income and yields

• Net interest income up 9.1 percent: Taxable-equivalent net interest income increased 9.1 percent year over year, on the taxable-equivalent basis assuming a 21 percent tax rate. Source
• Loan yield fell year over year: The loan yield was 6.61 percent in the third quarter, compared with 6.60 percent in the second quarter and 7.12 percent a year earlier. Source
• Net interest spread widened: Net interest spread was 2.98 percent, compared with 2.95 percent in the second quarter and 2.66 percent in the third quarter of 2024. Source

“We continue to build momentum in our newer markets, and we are well-positioned to continue to deliver above-market organic growth in any interest rate environment.”

Cullen/Frost Chairman and CEO Phil Green

Non-interest income drivers

• Non-interest income up 10.5 percent: Non-interest income totaled $125.6 million, up $11.9 million year over year, with increases across trust, service charge and other fee lines. Source
• Trust fees rose on investment management: Investment management fees rose $2.9 million and estate fees rose $634,000 within the trust and investment management fee increase. Source
• Service charges rose on deposit accounts: Service charges on deposit accounts reached $31.4 million in the quarter, up from the third quarter of 2024. Source
• Other fees rose on annuities: Other charges, commissions and fees rose, with income from annuity placement up $470,000 and letter of credit fees up $441,000. Source

Expense growth

• Non-interest expense up 9.0 percent: Non-interest expense totaled $352.5 million. The company attributes the growth to salaries, employee benefits and technology costs. Source
• Salaries rose with merit and headcount: Salaries and wages rose $12.5 million, or 8.0 percent, reflecting annual merit and market increases and a larger number of employees. Source
• Employee benefits up 18.6 percent: Medical and dental benefits rose $3.7 million, 401(k) plan expense rose $1.4 million and payroll taxes rose $350,000 year over year. Source
• Technology costs rose on cloud: Technology, furniture and equipment expense rose $5.7 million, led by cloud services up $3.5 million and software maintenance up $1.9 million. Source

Loan and deposit balances

• Average loans up sequentially: Average loans rose $389.2 million from the second quarter, or 1.8 percent, the company reported. Source
• Average deposits up sequentially: Average deposits rose $310.9 million from the second quarter, or 0.7 percent, as seasonal deposit flows began in the back half of the year. Source
• Period-end deposits reached $42.5 billion: Period-end total deposits were $42.5 billion, compared with $41.7 billion a year earlier, per the balance sheet summary. Source

Asset quality

• Allowance held at 1.31 percent: The allowance for credit losses on loans was 1.31 percent of total loans, unchanged from June 30 and from a year earlier. Source
• Second-quarter credit costs were higher: Credit loss expense and net charge-offs in the second quarter were $13.1 million and $11.2 million, respectively. Source
• Non-accrual ratio fell year over year: Non-accrual loans were 0.21 percent of total loans, against 0.52 percent a year earlier and 0.29 percent in the second quarter. Source

Book value and dividends

• Book value per share rose: Book value per common share was $67.64 at quarter end, up from $62.41 a year earlier and $63.04 at June 30. Source
• Dividends year to date: Cash dividends per common share totaled $2.95 for the first nine months, compared with $2.79 a year earlier. Source
• Leverage ratio rose: Leverage ratio was 9.00 percent at quarter end, compared with 8.80 percent a year earlier and 8.98 percent at June 30. Source
• Common shares outstanding declined: Period-end common shares were 63.8 million, down from 64.3 million at June 30, 2025. Source

Strategy and markets

• New locations remain the strategy: Management said it remains focused on opening new locations, extending the Frost experience, and delivering digital banking tools. Source
• Organic expansion adds employees: Management linked part of the rise in employee count to investment in organic expansion across various markets. Source
• Newer markets gaining momentum: Management described momentum in newer markets and said the company is positioned for above-market organic growth in any rate environment. Source

Coming up, as management said on 30 October 2025

• Common dividend payment: The fourth-quarter common dividend is payable December 15, 2025 to shareholders of record on November 28. Source
• Preferred dividend payment: The Series B Preferred Stock dividend is payable December 15, 2025 to shareholders of record on November 28. Source

Figures management reported

Risks management discussed

• Operational: Fraud losses rose $2.8 million year over year and were included in the increase in other non-interest expense. Source
• External: Investment management fees move with asset values, so they are affected by equity and bond market price movements. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.