Cullen/Frost Bank Reports Strong First Quarter Results with Dividend Increase

Cullen/Frost Bank Reports First Quarter 2025 Results

Cullen/Frost Bankers, Inc. (NYSE: CFR) has disclosed its financial performance for the first quarter of 2025, indicating a remarkable growth in net income and a rise in dividends. The report was published on May 1, 2025, revealing net income available to common shareholders of $149.3 million, up from $134.0 million in the first quarter of 2024. This translated to an increase in earnings per diluted share to $2.30 from $2.06 on a year-over-year basis.

Chairman and CEO Phil Green expressed satisfaction with the bank's performance, attributing the growth to strong loan demand and a stable deposit base. “We continued to see solid loan growth and deposit trends returning to normal,” he stated, emphasizing Cullen/Frost's strategy of organic expansion across Texas.

The bank reported net interest income at $436.4 million, which represented a 6.1% increase compared to the previous year. Average loans rose significantly, increasing by 8.8% to $20.8 billion, highlighting the bank's effective lending strategies. Additionally, average deposits mounted to $41.7 billion, an increase of 2.3% compared to the same quarter last year.

Capital Ratios and Financial Stability

Cullen/Frost continues to exhibit strong capital ratios. The Common Equity Tier 1, Tier 1, and total risk-based capital ratios stood at 13.84%, 14.30%, and 15.76%, respectively, all exceeding the Basel III minimum requirements. This solid capital foundation amplifies the bank's ability to absorb potential financial shocks and maintain stability amid varying economic conditions.

Moreover, the non-interest income also saw a promising rise, totaling $124.0 million, an increase of 11.3% from the previous year. This comprises contributions from investment management fees, service charges, and insurance commissions, showcasing the diversified income streams that bolster overall profitability.

However, the bank also reported an increase in non-interest expenses to $348.1 million, reflecting an 6.7% rise year-over-year. This surge in expenses primarily resulted from increased salaries and wages due to merit increases and the hiring of new employees to fuel organic growth efforts. Employee benefits also escalated, emphasizing the bank's investment in its workforce.

Looking Ahead: Expansion Plans

Cullen/Frost has ambitious plans on the horizon, aiming to open its 199th and 200th locations in Fort Worth and Pflugerville, respectively, as part of its organic growth initiative launched in late 2018. This will mark a significant expansion in the bank's footprint, increasing locations by more than 50% since the program's inception.

In light of these developments, the Board of Directors declared a $1.00 cash dividend per common share, reflecting a 5.3% increase from the preceding dividend, signaling confidence in continued profitability and growth. The dividend is payable on June 13, 2025, to shareholders recorded by May 30, 2025.

As part of its commitment to transparency, Cullen/Frost will host a conference call to further discuss the quarterly results on May 1, 2025, inviting stakeholders to participate and understand the bank's financial health and strategic direction.

Overall, Cullen/Frost Bank appears to be on a robust trajectory, navigating the complexities of the financial environment adeptly while maintaining focus on growth and customer service. Investors and analysts alike will keenly observe the bank’s progression and strategic implementations in the upcoming quarters.