CULLEN/FROST REPORTS FOURTH QUARTER AND 2024 ANNUAL RESULTS

Published: 2025-01-30 09:01:16 ET CFR

Board declares first quarter dividend on common and preferred stock, and authorizes $150 million stock repurchase program

SAN ANTONIO, Jan. 30, 2025 /PRNewswire/ -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported fourth quarter and full-year results for 2024. Net income available to common shareholders for the fourth quarter of 2024 was $153.2 million, representing a $52.3 million increase compared to $100.9 million reported for the fourth quarter of 2023. Results for the fourth quarter of 2023 were impacted by a $51.5 million ($40.7 million net of tax) special surcharge associated with FDIC insurance. Excluding the FDIC surcharge in the year-ago period, fourth quarter 2024 net income available to common shareholders increased by $11.6 million, or 8.2 percent, compared to $141.6 million for the fourth quarter of 2023. On a per-share basis, the company reported net income available to common shareholders of $2.36 per diluted common share for the fourth quarter of 2024, compared to $1.55 per diluted common share for the fourth quarter of 2023. Excluding the after-tax impact of the FDIC surcharge in the fourth quarter of 2023, fourth quarter 2024 diluted earnings per common share increased 8.3 percent compared to $2.18 per diluted common share for the fourth quarter of 2023. The FDIC special surcharge did not affect the fourth quarter of 2024, however, we recognized a total of $9.0 million in such surcharges in the first and second quarters of 2024. For the fourth quarter of 2024, returns on average assets and average common equity were 1.19 percent and 15.58 percent, respectively, compared to 0.82 percent and 13.51 percent for the same period in 2023. Excluding the special FDIC insurance surcharge, returns on average assets and average common equity for the fourth quarter of 2023 would have been approximately 1.14 percent and 18.96 percent.

The company also reported 2024 annual net income available to common shareholders of $575.9 million, a decrease of 2.6 percent compared to 2023 earnings available to common shareholders of $591.3 million. Excluding the aforementioned special FDIC surcharge amounts, annual net income available to common shareholders for 2024 would have been $583.0 million, representing a decrease of $49.0 million, or 7.8 percent, compared to $632.0 million for 2023. On a per-share basis, 2024 earnings were $8.87 per diluted common share compared to $9.10 per diluted common share reported in 2023. Excluding the after-tax impact of the FDIC surcharge in both periods, 2024 diluted earnings per common share were $8.98 compared to $9.72 per diluted common share reported in 2023. For the year 2024, returns on average assets and average common equity were 1.16 percent and 15.81 percent respectively, compared to 1.19 percent and 18.66 percent reported in 2023.

"Our solid financial results for the fourth quarter were the result of continued focus and execution on the part of Frost bankers throughout the company," said Cullen/Frost Chairman and CEO Phil Green. "Our people show their commitment to excellence in the way that they carry out our mission each day. That results in an unparalleled customer experience, and ultimately in our consistent growth in new customer relationships. In the fourth quarter, we saw average deposits return to growth on both a linked-quarter and a year-over-year basis."

For the fourth quarter of 2024, net interest income on a taxable-equivalent basis was $433.7 million, up $23.8 million or 5.8 percent compared to $409.9 million for fourth quarter of 2023. Average loans for the fourth quarter of 2024 increased $1.7 billion, or 9.3 percent, to $20.3 billion, from the $18.6 billion reported for the fourth quarter a year earlier, and increased 1.3 percent compared to $20.1 billion for the third quarter of 2024. Average deposits for the quarter increased $701.7 million, or 1.7 percent to $41.9 billion compared to $41.2 billion in last year's fourth quarter, and increased 2.8 percent compared to $40.7 billion for the third quarter of 2024. Compared to the third quarter of 2024, fourth quarter average non-interest-bearing deposits increased by 2.9 percent and average interest-bearing deposits increased by 2.8 percent.

For full year 2024, average total loans were $19.8 billion, an increase of approximately $1.9 billion, or 10.7 percent, from the $17.9 billion reported in 2023. Average total deposits for 2024 were $41.0 billion, down $472.8 million, or 1.1 percent, compared to the $41.4 billion reported for full year 2023.

Noted financial data for the fourth quarter:

The Cullen/Frost board declared a first-quarter cash dividend of $0.95 per common share, payable March 14, 2025, to shareholders of record on February 28 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 on March 17, 2025, to shareholders of record on February 28 of this year.

In addition, the company's board of directors approved a new share repurchase program with authorization to purchase up to $150 million of Cullen/Frost common stock over a one-year period expiring on January 28, 2026. Share repurchases under the authorization may be made through a variety of methods, which may include open market purchases, in privately negotiated transactions, block trades, accelerated share repurchase transactions, and/or through other legally permissible means. The timing and amount of any share repurchases under the authorization will be determined by management at its discretion and based on market conditions and other considerations. The share repurchase program may be suspended or discontinued at any time at the company's discretion and does not obligate Cullen/Frost to purchase any amount of common stock.

Cullen/Frost Bankers, Inc. will host a conference call on Thursday, January 30, 2025, at 1:00 p.m. Central Time (CT) to discuss the results for the quarter and the year. The media and other interested parties are invited to access the call in a "listen only" mode at 877-709-8150. Playback of the conference call will be available after 5:00 p.m. CT on the day of the call until midnight Sunday, February 2 at 877-660-6853, with the Conference ID# of

13750974. A replay of the call will also be available by webcast at the URL listed below after 5:00 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 $52.5 billion in assets at December 31, 2024. 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 frostbank.com.

Forward-Looking Statements and Factors that Could Affect Future Results

Certain statements contained in this press release that 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:

In addition, financial markets and global supply chains may continue to be adversely affected by the current or anticipated impact of global wars/military conflicts, terrorism, or other geopolitical events.

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)

2024

2023

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

4th Qtr

CONDENSED INCOME STATEMENTS

Net interest income

$ 413,518

$ 404,331

$ 396,712

$ 390,051

$ 388,152

Net interest income (1)

433,726

425,160

417,621

411,367

409,904

Credit loss expense

16,162

19,386

15,787

13,650

15,981

Non-interest income:

Trust and investment management fees

43,765

41,016

41,404

39,085

40,163

Service charges on deposit accounts

27,909

27,412

26,114

24,795

24,535

Insurance commissions and fees

14,215

14,839

13,919

18,296

12,743

Interchange and card transaction fees

5,764

5,428

5,351

4,474

4,608

Other charges, commissions and fees

15,208

13,060

13,020

12,060

12,104

Net gain (loss) on securities transactions

(112)

—

Other

16,075

11,936

11,382

12,667

19,598

Total non-interest income

122,824

113,707

111,190

111,377

113,751

Non-interest expense:

Salaries and wages

165,520

156,637

151,237

148,000

146,616

Employee benefits

28,614

29,060

28,802

35,970

28,065

Net occupancy

32,102

32,497

32,374

31,778

30,752

Technology, furniture and equipment

39,775

37,766

35,951

34,995

34,484

Deposit insurance

6,924

7,238

8,383

14,724

58,109

Other

63,232

60,212

60,217

60,750

67,196

Total non-interest expense

336,167

323,410

316,964

326,217

365,222

Income before income taxes

184,013

175,242

175,151

161,561

120,700

Income taxes

29,161

28,741

29,652

25,871

18,149

Net income

154,852

146,501

145,499

135,690

102,551

Preferred stock dividends

1,669

1,668

1,669

Net income available to common shareholders

$ 153,183

$ 144,833

$ 143,830

$ 134,021

$ 100,882

PER COMMON SHARE DATA

Earnings per common share - basic

$ 2.37

$ 2.24

$ 2.21

$ 2.06

$ 1.55

Earnings per common share - diluted

2.36

2.24

2.21

2.06

1.55

Cash dividends per common share

0.95

0.92

Book value per common share at end of quarter

58.46

62.41

55.02

54.36

55.64

OUTSTANDING COMMON SHARES

Period-end common shares

64,197

63,931

63,989

64,251

64,185

Weighted-average common shares - basic

64,116

63,958

64,193

64,216

64,139

Dilutive effect of stock compensation

121

127

140

156

176

Weighted-average common shares - diluted

64,237

64,085

64,333

64,372

64,315

SELECTED ANNUALIZED RATIOS

Return on average assets

1.19 %

1.16 %

1.18 %

1.09 %

0.82 %

Return on average common equity

15.58

15.48

17.08

15.22

13.51

Net interest income to average earning assets (1)

3.53

3.56

3.54

3.48

3.41

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

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

2024

2023

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

4th Qtr

BALANCE SHEET SUMMARY

($ in millions)

Average Balance:

Loans

$ 20,346

$ 20,084

$ 19,652

$ 19,112

$ 18,609

Earning assets

47,577

46,100

45,527

45,883

45,579

Total assets

51,008

49,467

48,960

49,324

49,087

Non-interest-bearing demand deposits

14,051

13,659

13,679

13,976

14,697

Interest-bearing deposits

27,834

27,074

26,831

26,748

26,487

Total deposits

41,885

40,733

40,510

40,724

41,184

Shareholders' equity

4,057

3,868

3,533

3,687

3,108

Period-End Balance:

Loans

$ 20,755

$ 20,055

$ 19,996

$ 19,388

$ 18,824

Earning assets

48,878

47,424

45,344

46,164

47,124

Total assets

52,520

51,008

48,843

49,505

50,845

Total deposits

42,723

41,721

40,318

40,806

41,921

Shareholders' equity

3,899

4,135

3,666

3,638

3,716

Adjusted shareholders' equity (1)

5,151

5,051

4,975

4,914

4,836

ASSET QUALITY

($ in thousands)

Allowance for credit losses on loans:

$ 270,151

$ 263,129

$ 256,307

$ 250,297

$ 245,996

As a percentage of period-end loans

1.30 %

1.31 %

1.28 %

1.29 %

1.31 %

Net charge-offs:

$ 13,962

$ 9,640

$ 9,726

$ 7,349

$ 10,884

Annualized as a percentage of average loans

0.27 %

0.19 %

0.20 %

0.15 %

0.23 %

Non-accrual loans:

$ 78,866

$ 104,877

$ 74,987

$ 71,515

$ 60,907

As a percentage of total loans

0.38 %

0.52 %

0.38 %

0.37 %

0.32 %

As a percentage of total assets

0.15

0.21

0.15

0.14

0.12

CONSOLIDATED CAPITAL RATIOS

Common Equity Tier 1 Risk-Based Capital Ratio

13.62 %

13.55 %

13.35 %

13.41 %

13.25 %

Tier 1 Risk-Based Capital Ratio

14.07

14.02

13.82

13.89

13.73

Total Risk-Based Capital Ratio

15.53

15.50

15.27

15.35

15.18

Leverage Ratio

8.63

8.80

8.62

8.44

8.35

Equity to Assets Ratio (period-end)

7.42

8.11

7.51

7.35

7.31

Equity to Assets Ratio (average)

7.95

7.82

7.22

7.47

6.33

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

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

(In thousands, except per share amounts)

Year Ended December 31,

2024

2023

2022

CONDENSED INCOME STATEMENTS

Net interest income

$ 1,604,612

$ 1,558,664

$ 1,291,283

Net interest income (1)

1,687,873

1,651,695

1,386,981

Credit loss expense

64,985

46,171

3,000

Non-interest income:

Trust and investment management fees

165,270

153,315

154,679

Service charges on deposit accounts

106,230

93,504

91,891

Insurance commissions and fees

61,269

58,271

53,210

Interchange and card transaction fees

21,017

19,419

18,231

Other charges, commissions and fees

53,348

49,026

41,590

Net gain (loss) on securities transactions

(96)

—

Other

52,060

54,941

45,217

Total non-interest income

459,098

428,542

404,818

Non-interest expense:

Salaries and wages

621,394

547,718

492,096

Employee benefits

122,446

115,306

88,608

Net occupancy

128,751

124,396

112,495

Technology, furniture and equipment

148,487

135,286

120,771

Deposit insurance

37,269

76,589

15,603

Other

244,411

229,367

194,701

Total non-interest expense

1,302,758

1,228,662

1,024,274

Income before income taxes

695,967

712,373

668,827

Income taxes

113,425

114,400

89,677

Net income

582,542

597,973

579,150

Preferred stock dividends

6,675

Net income available to common shareholders

$ 575,867

$ 591,298

$ 572,475

PER COMMON SHARE DATA

Earnings per common share - basic

$ 8.88

$ 9.11

$ 8.84

Earnings per common share - diluted

8.87

9.10

8.81

Cash dividends per common share

3.74

3.58

3.24

Book value per common share at end of quarter

58.46

55.64

46.49

OUTSTANDING COMMON SHARES

Period-end common shares

64,197

64,185

64,355

Weighted-average common shares - basic

64,121

64,204

64,157

Dilutive effect of stock compensation

142

201

364

Weighted-average common shares - diluted

64,263

64,405

64,521

SELECTED ANNUALIZED RATIOS

Return on average assets

1.16 %

1.19 %

1.11 %

Return on average common equity

15.81

18.66

16.86

Net interest income to average earning assets (1)

3.53

3.45

2.82

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

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

Year Ended December 31,

2024

2023

2022

BALANCE SHEET SUMMARY ($ in millions)

Average Balance:

Loans

$ 19,801

$ 17,893

$ 16,739

Earning assets

46,275

46,186

48,293

Total assets

49,694

49,604

51,513

Non-interest-bearing demand deposits

13,841

15,340

18,203

Interest-bearing deposits

27,124

26,098

26,368

Total deposits

40,965

41,438

44,571

Shareholders' equity

3,787

3,313

3,541

Period-End Balance:

Loans

$ 20,755

$ 18,824

$ 17,155

Earning assets

48,878

47,124

49,402

Total assets

52,520

50,845

52,892

Total deposits

42,723

41,921

43,954

Shareholders' equity

3,899

3,716

3,137

Adjusted shareholders' equity (1)

5,151

4,836

4,486

ASSET QUALITY ($ in thousands)

Allowance for credit losses on loan:

$ 270,151

$ 245,996

$ 227,621

As a percentage of period-end loans

1.30 %

1.31 %

1.33 %

Net charge-offs:

$ 40,677

$ 34,486

$ 15,766

Annualized as a percentage of average loans

0.21 %

0.19 %

0.09 %

Non-accrual loans:

$ 78,866

$ 60,907

$ 37,833

As a percentage of total loans

0.38 %

0.32 %

0.22 %

As a percentage of total assets

0.15

0.12

0.07

CONSOLIDATED CAPITAL RATIOS

Common Equity Tier 1 Risk-Based Capital Ratio

13.62 %

13.25 %

12.85 %

Tier 1 Risk-Based Capital Ratio

14.07

13.73

13.35

Total Risk-Based Capital Ratio

15.53

15.18

14.84

Leverage Ratio

8.63

8.35

7.29

Equity to Assets Ratio (period-end)

7.42

7.31

5.93

Equity to Assets Ratio (average)

7.62

6.68

6.87

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

Cullen/Frost Bankers, Inc.

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

2024

2023

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

4th Qtr

TAXABLE-EQUIVALENT YIELD/COST(1)

Earning Assets:

Interest-bearing deposits

4.71 %

5.32 %

5.40 %

5.39 %

Federal funds sold

5.16

5.65

5.78

5.76

5.73

Resell agreements

4.88

5.48

5.60

Securities(2)

3.44

3.40

3.38

3.32

3.24

Loans, net of unearned discounts

6.77

7.12

7.08

7.00

6.92

Total earning assets

5.05

5.26

5.23

5.13

5.00

Interest-Bearing Liabilities:

Interest-bearing deposits:

Savings and interest checking

0.29 %

0.38 %

0.39 %

0.42 %

0.40 %

Money market deposit accounts

2.47

2.80

2.83

2.82

2.83

Time accounts

4.32

4.73

4.77

4.73

4.59

Total interest-bearing deposits

2.14

2.41

2.39

2.34

2.27

Total deposits

1.42

1.60

1.58

1.54

1.46

Federal funds purchased

4.71

5.33

5.39

5.38

5.40

Repurchase agreements

3.34

3.72

3.75

3.76

3.75

Junior subordinated deferrable interest debentures

6.87

7.14

7.47

7.34

7.45

Subordinated notes payable and other notes

4.69

Total interest-bearing liabilities

2.32

2.60

2.59

2.54

2.48

Net interest spread

2.73

2.66

2.64

2.59

2.52

Net interest income to total average earning assets

3.53

3.56

3.54

3.48

3.41

AVERAGE BALANCES

($ in millions)

Assets:

Interest-bearing deposits

$ 8,577

$ 7,073

$ 7,156

$ 7,356

$ 7,047

Federal funds sold

Resell agreements

Securities - carrying value(2)

18,640

18,898

18,629

19,324

19,834

Securities - amortized cost(2)

19,944

20,324

20,400

20,813

21,969

Loans, net of unearned discount

20,346

20,084

19,652

19,112

18,609

Total earning assets

$ 47,577

$ 46,100

$ 45,527

$ 45,883

$ 45,579

Liabilities:

Interest-bearing deposits:

Savings and interest checking

$ 9,693

$ 9,470

$ 9,716

$ 9,918

$ 9,986

Money market deposit accounts

11,683

11,122

11,009

11,058

11,219

Time accounts

6,458

6,482

6,106

5,773

5,282

Total interest-bearing deposits

27,834

27,074

26,831

26,748

26,487

Total deposits

41,885

40,733

40,510

40,724

41,184

Federal funds purchased

Repurchase agreements

3,946

3,777

3,827

3,787

3,761

Junior subordinated deferrable interest debentures

123

Subordinated notes payable and other notes

100

Total interest-bearing funds

$ 32,027

$ 31,094

$ 30,921

$ 30,791

$ 30,488

(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. MendezInvestor Relations210.220.5234 orBill DayMedia Relations210.220.5427

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SOURCE Cullen/Frost Bankers, Inc.