Cullen/Frost Bankers (CFR) Q1 2025 earnings summary

Executive summary

• Net income available to common shareholders rose 11.4% to $149.3 million ($2.30 per share) for Q1 2025, up from $134 million ($2.06 per share) in Q1 2024, driven by higher net interest and non-interest income.

• Return on average assets was 1.19% and return on average common equity was 15.54%, both higher than the prior year.

• Expansion strategy has increased financial centers by over 50% since 2018, with the 200th location opening soon.

• Board increased quarterly common dividend by 5.3% to $1.00 per share, payable June 13, 2025.

• 64,000 new households added, with expansion loans and deposits exceeding goals.

Financial highlights

• Net interest income (taxable-equivalent) grew 6.7% year-over-year to $416.2 million, with net interest margin up 12 bps to 3.60% year-over-year.

• Non-interest income increased 11.3% to $124.0 million, led by higher trust, investment management, service charges, and insurance commissions.

• Non-interest expense rose 6.7% to $348.1 million, mainly from higher salaries, benefits, and technology costs.

• Average loans grew 8.8% year-over-year to $20.8 billion; average deposits up 2.3% to $41.7 billion.

• Net charge-offs were $9.7 million (0.19% annualized of average loans), down from $14 million last quarter.

Outlook and guidance

• Net interest income growth for 2025 expected at 5%-7%, up from prior 4%-6% guidance.

• Net interest margin projected to improve by 12-15 basis points over 2024.

• Full-year average loan growth expected in mid to high single digits; average deposits up 2%-3%.

• Non-interest income growth forecasted at 2%-3%; non-interest expense growth in high single digits.

• Four 25 bps Fed rate cuts assumed in guidance.