Cullen/Frost Bankers (CFR) Q4 2024 earnings summary

Executive summary

• Fourth quarter 2024 net income was $153.2 million ($2.36/share), up from $100.9 million ($1.55/share) year-over-year; excluding the prior year's FDIC surcharge, net income rose 8.2% year-over-year.

• Full-year 2024 net income was $575.9 million ($8.87/share), down from $591.3 million ($9.10/share) in 2023; excluding FDIC surcharges, annual net income declined 7.8%.

• Return on average assets and equity in Q4 were 1.19% and 15.58%, respectively, both higher than the prior year.

• Board declared a $0.95 per share Q1 2025 dividend and authorized a $150 million stock repurchase program expiring January 2026.

• Organic growth strategy continues to drive expansion, with 200th location expected mid-2024 and strong performance in new markets.

Financial highlights

• Q4 2024 net interest income (taxable-equivalent) was $433.7 million, up 5.8% year-over-year; net interest margin was 3.53%.

• Average Q4 deposits rose to $41.9 billion from $41.2 billion year-over-year; average loans grew 9.3% to $20.3 billion.

• Consumer loans grew 21% annually, with $610 million increase in average balances; third consecutive year of 20%+ growth.

• Commercial loan balances up 8.3% year-over-year; CRE up 11%, energy up 20%, C&I up 2.4%.

• Net charge-offs for Q4 were $14 million (27 bps of average loans), up from $10.9 million a year ago.

Outlook and guidance

• 2025 guidance assumes two 25 bps Fed rate cuts (June, September); net interest income expected to grow 4–6%.

• Net interest margin projected to improve by ~10 bps; average loan growth in mid-high single digits, deposit growth 2–3%.

• Non-interest income growth expected at 1–2%; non-interest expense to rise in high single digits.

• Net charge-offs for 2025 expected at 20–25 bps of average loans; tax rate projected at 15–16%.

• Management highlighted growth in average deposits both sequentially and year-over-year in Q4 2024, with continued focus on customer relationship expansion.