EX-99.1 2 a3q24formxex991xpressrelea.htm EX-99.1 - 3Q24 EARNINGS RELEASE Document


Exhibit 99.1


A.B. Mendez
Investor Relations
210.220.5234
or
Bill Day
Media Relations
210.220.5427


FOR IMMEDIATE RELEASE    
October 31, 2024



CULLEN/FROST REPORTS THIRD QUARTER RESULTS
Board declares fourth quarter dividend on common and preferred stock



SAN ANTONIO -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported third quarter 2024 results.
Net income available to common shareholders for the third quarter of 2024 was $144.8 million compared to $154.0 million for the third quarter of 2023. On a per-share basis, net income available to common shareholders for the third quarter of 2024 was $2.24 per diluted common share, compared to $2.38 per diluted common share reported a year earlier. Returns on average assets and average common equity were 1.16 percent and 15.48 percent, respectively, for the third quarter of 2024 compared to 1.25 percent and 18.93 percent, respectively, for the same period a year earlier.
For the third quarter of 2024, net interest income on a taxable-equivalent basis was $425.2 million, up 4.4 percent compared to the same quarter in 2023. Average loans for the third quarter of 2024 increased $2.1 billion, or 11.8 percent, to $20.1 billion, from the $18.0 billion reported for the third quarter a year earlier, and increased $431.6 million, or 2.2 percent, compared to the second quarter of 2024. Average deposits for the third quarter decreased $94.7 million, or 0.2 percent, to $40.7 billion, compared to the $40.8 billion reported for last year's third quarter, and increased $223.3 million, or 0.6 percent, compared to the second quarter of 2024. Average non-interest-bearing deposits were down $20.2 million, or 0.1 percent, from the second quarter. Average interest-bearing deposits were up $243.4 million, or 0.9 percent, from the second quarter.


“In the third quarter we saw the beginning of an expected seasonal increase in deposits and continued growth in loans and new relationships,” said Cullen/Frost Chairman and CEO Phil Green. "Frost bankers continued to provide outstanding experiences to customers across all of our regions and all areas of the business. That includes our Frost Mortgage product, where total loan originations have recently passed $200 million, allowing more customers to get a Frost experience as they go through one of the most important financial events of their lives.”

For the first nine months of 2024, net income available to common shareholders was $422.7 million, down 13.8 percent compared to $490.4 million for the first nine months of 2023. Diluted EPS available to common shareholders for the first nine months of 2024 was $6.51 compared to $7.54 in the year-earlier period. Returns on average assets and average common equity for the first nine months of 2024 were 1.15 percent and 15.90 percent, respectively, compared to 1.32 percent and 20.25 percent, respectively, for the same period in 2023.


Noted financial data for the third quarter of 2024 follows:

•The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios at the end of the third quarter of 2024 were 13.55 percent, 14.02 percent and 15.50 percent, respectively, and continue to be in excess of well-capitalized levels and exceed Basel III minimum requirements.
•Net interest income on a taxable-equivalent basis was $425.2 million for the third quarter of 2024, an increase of 4.4 percent, compared to $407.4 million for the third quarter of 2023. Net interest margin was 3.56 percent for the third quarter compared to 3.54 percent for the second quarter of 2024 and 3.44 percent for the third quarter of 2023.
•Non-interest income for the third quarter of 2024 totaled $113.7 million, an increase of $7.7 million, or 7.3 percent, from the $106.0 million reported for the third quarter of 2023. Trust and investment management fees increased $3.4 million, or 9.0 percent, compared to the third quarter of 2023. The increase in trust and investment management fees during the third quarter was primarily related to an increase in investment management fees (up $3.4 million). Service charges on deposit accounts increased $3.8 million, or 16.1 percent, compared to the third quarter of 2023. The increase in the third quarter was

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primarily related to increases in commercial and consumer overdraft charges (up $2.8 million) and commercial service charges (up $1.3 million). Insurance commissions and fees increased $1.2 million, or 8.8 percent, compared to the third quarter of 2023. The increase was mainly driven by an increase in commercial lines property & casualty commissions (up $944,000). Other non-interest income decreased by $1.4 million, or 10.5 percent, compared to the third quarter of 2023. The decrease was primarily related to a decrease in sundry and other miscellaneous income (down $1.4 million).    
•Non-interest expense was $323.4 million for the third quarter of 2024, up $30.2 million, or 10.3 percent, compared to the $293.3 million reported for the third quarter a year earlier. Salaries and wages expense increased $19.1 million, or 13.9 percent, compared to the third quarter of 2023. The increase in salaries and wages was primarily related to increases in salaries due to annual merit and market increases and to an increase in the number of employees. The increase in the number of employees was partly related to our investment in organic expansion in various markets. Employee benefits expense increased by $2.5 million, or 9.5 percent, compared to the third quarter of 2023. The increase in employee benefits expense was primarily related to increases in medical/dental benefits expense (up $1.3 million) and payroll taxes (up $1.2 million). Other non-interest expense increased $3.9 million, or 7.0 percent, compared to the third quarter of 2023. The increase in other non-interest expense during the third quarter of 2024 included increases in professional services expense (up $1.3 million), which was primarily related to information technology services; sundry and other miscellaneous expense (up $959,000); travel, meals and entertainment (up $618,000); and business development expense (up $592,000). Technology, furniture, and equipment expense increased $2.5 million, or 7.1 percent, compared to the third quarter of 2023. The increase was primarily related to increased cloud services expense (up $1.9 million), service contracts expense (up $854,000), and software amortization (up $371,000). The increases from these items were partly offset by a decrease in depreciation on furniture and equipment (down $612,000).
•For the third quarter of 2024, the company reported a credit loss expense of $19.4 million, and reported net loan charge-offs of $9.6 million. This compares to a credit loss expense of $15.8 million and net loan charge-offs of $9.7 million for the second quarter of 2024 and a credit loss expense of $11.2 million and net loan charge-offs of $5.0 million for the third quarter of 2023. The allowance for credit losses on loans as a percentage of total loans was 1.31 percent at September 30, 2024, compared to 1.28 percent at the

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end of the second quarter of 2024 and 1.32 percent at the end of the third quarter of 2023. Non-accrual loans were $104.9 million at the end of the third quarter of 2024, compared to $75.0 million at the end of the second quarter of 2024 and $67.2 million at the end of the third quarter of 2023.

The Cullen/Frost board declared a fourth-quarter cash dividend of $0.95 per common share. The dividend on common stock is payable December 13, 2024 to shareholders of record on November 29 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 December 16, 2024 to shareholders of record on November 29 of this year.
Cullen/Frost Bankers, Inc. will host a conference call on Thursday, October 31, 2024, at 1 p.m. Central Time (CT) to discuss the results for the quarter. The media and other interested parties are invited to access the call in a “listen only” mode at 1-877-709-8150 or via webcast on our investor relations website linked below. Playback of the conference call will be available after 5 p.m. CT on the day of the call until midnight Sunday, November 3, 2024 at 1-877-660-6853 with Conference ID # of 13749468. A replay of the call will also be available by webcast at the URL listed below after 5 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 $51.0 billion in assets at September 30, 2024. One of the 50 largest commercial banks in the U.S., Frost provides a wide range of banking, investments and insurance services to businesses and individuals across Texas in the Austin, Corpus Christi, Dallas, Fort Worth, Houston, Permian Basin, Rio Grande Valley and San Antonio regions. Founded in 1868, Frost has helped clients with their financial needs during three centuries. Additional information is available at www.frostbank.com.

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Forward-Looking Statements and Factors that Could Affect Future Results
Certain statements contained in this Earnings 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:
•The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board.
•Inflation, interest rate, securities market, and monetary fluctuations.
•Local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact.
•Changes in the financial performance and/or condition of our borrowers.
•Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs.
•Changes in estimates of future credit loss reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.
•Changes in our liquidity position.
•Impairment of our goodwill or other intangible assets.
•The timely development and acceptance of new products and services and perceived overall value of these products and services by users.
•Changes in consumer spending, borrowing, and saving habits.
•Greater than expected costs or difficulties related to the integration of new products and lines of business.
•Technological changes.
•The cost and effects of cyber incidents or other failures, interruptions, or security breaches of our systems or those of our customers or third-party providers.
•Acquisitions and integration of acquired businesses.
•Changes in the reliability of our vendors, internal control systems or information systems.
•Our ability to increase market share and control expenses.
•Our ability to attract and retain qualified employees.
•Changes in our organization, compensation, and benefit plans.
•The soundness of other financial institutions.
•Volatility and disruption in national and international financial and commodity markets.
•Changes in the competitive environment in our markets and among banking organizations and other financial service providers.
•Government intervention in the U.S. financial system.
•Political or economic instability.
•Acts of God or of war or terrorism.
•The potential impact of climate change.
•The impact of pandemics, epidemics, or any other health-related crisis.
•The costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals.
•The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) and their application with which we and our subsidiaries must comply.
•The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.
•Our success at managing the risks involved in the foregoing items.
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.

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Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
20242023
3rd Qtr2nd Qtr1st Qtr4th Qtr3rd Qtr
CONDENSED INCOME STATEMENTS
Net interest income$404,331 $396,712 $390,051 $388,152 $385,426 
Net interest income (1)
425,160 417,621 411,367 409,904 407,353 
Credit loss expense19,386 15,787 13,650 15,981 11,185 
Non-interest income:
Trust and investment management fees41,016 41,404 39,085 40,163 37,616 
Service charges on deposit accounts27,412 26,114 24,795 24,535 23,603 
Insurance commissions and fees14,839 13,919 18,296 12,743 13,636 
Interchange and card transaction fees 5,428 5,351 4,474 4,608 4,672 
Other charges, commissions, and fees13,060 13,020 12,060 12,104 13,128 
Net gain (loss) on securities transactions16 — — — 12 
Other11,936 11,382 12,667 19,598 13,331 
Total non-interest income 113,707 111,190 111,377 113,751 105,998 
Non-interest expense:
Salaries and wages156,637 151,237 148,000 146,616 137,562 
Employee benefits29,060 28,802 35,970 28,065 26,527 
Net occupancy32,497 32,374 31,778 30,752 31,581 
Technology, furniture, and equipment37,766 35,951 34,995 34,484 35,278 
Deposit insurance7,238 8,383 14,724 58,109 6,033 
Other 60,212 60,217 60,750 67,196 56,275 
Total non-interest expense 323,410 316,964 326,217 365,222 293,256 
Income before income taxes175,242 175,151 161,561 120,700 186,983 
Income taxes28,741 29,652 25,871 18,149 31,332 
Net income146,501 145,499 135,690 102,551 155,651 
Preferred stock dividends1,668 1,669 1,669 1,669 1,668 
Net income available to common shareholders$144,833 $143,830 $134,021 $100,882 $153,983 
PER COMMON SHARE DATA
Earnings per common share - basic$2.24 $2.21 $2.06 $1.55 $2.38 
Earnings per common share - diluted2.24 2.21 2.06 1.55 2.38 
Cash dividends per common share0.95 0.92 0.92 0.92 0.92 
Book value per common share at end of quarter62.41 55.02 54.36 55.64 44.59 
OUTSTANDING COMMON SHARES
Period-end common shares63,931 63,989 64,251 64,185 64,017 
Weighted-average common shares - basic63,958 64,193 64,216 64,139 64,067 
Dilutive effect of stock compensation127 140 156 176 172 
Weighted-average common shares - diluted64,085 64,333 64,372 64,315 64,239 
SELECTED ANNUALIZED RATIOS
Return on average assets1.16 %1.18 %1.09 %0.82 %1.25 %
Return on average common equity15.48 17.08 15.22 13.51 18.93 
Net interest income to average earning assets 3.56 3.54 3.48 3.41 3.44 
(1) Taxable-equivalent basis assuming a 21% tax rate.

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Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
20242023
3rd Qtr2nd Qtr1st Qtr4th Qtr3rd Qtr
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
Loans$20,084 $19,652 $19,112 $18,609 $17,965 
Earning assets46,100 45,527 45,883 45,579 45,366 
Total assets49,467 48,960 49,324 49,087 48,804 
Non-interest-bearing demand deposits13,659 13,679 13,976 14,697 14,823 
Interest-bearing deposits27,074 26,831 26,748 26,487 26,005 
Total deposits40,733 40,510 40,724 41,184 40,828 
Shareholders' equity3,868 3,533 3,687 3,108 3,372 
Period-End Balance:
Loans$20,055 $19,996 $19,388 $18,824 $18,399 
Earning assets47,424 45,344 46,164 47,124 45,218 
Total assets51,008 48,843 49,505 50,845 48,747 
Total deposits41,721 40,318 40,806 41,921 40,992 
Shareholders' equity4,135 3,666 3,638 3,716 3,000 
Adjusted shareholders' equity (1)
5,051 4,975 4,914 4,836 4,779 
ASSET QUALITY
($ in thousands)
Allowance for credit losses on loans:$263,129 $256,307 $250,297 $245,996 $242,235 
As a percentage of period-end loans1.31 %1.28 %1.29 %1.31 %1.32 %
Net charge-offs:$9,640 $9,726 $7,349 $10,884 $4,992 
Annualized as a percentage of average loans0.19 %0.20 %0.15 %0.23 %0.11 %
Non-accrual loans:$104,877 $74,987 $71,515 $60,907 $67,175 
As a percentage of total loans0.52 %0.38 %0.37 %0.32 %0.37 %
As a percentage of total assets0.21 0.15 0.14 0.12 0.14 
CONSOLIDATED CAPITAL RATIOS
Common Equity Tier 1 Risk-Based Capital Ratio13.55 %13.35 %13.41 %13.25 %13.32 %
Tier 1 Risk-Based Capital Ratio14.02 13.82 13.89 13.73 13.81 
Total Risk-Based Capital Ratio15.50 15.27 15.35 15.18 15.28 
Leverage Ratio8.80 8.62 8.44 8.35 8.17 
Equity to Assets Ratio (period-end)8.11 7.51 7.35 7.31 6.15 
Equity to Assets Ratio (average)7.82 7.22 7.47 6.33 6.91 
(1) Shareholders' equity excluding accumulated other comprehensive income (loss).


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Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
Nine Months Ended
September 30,
20242023
CONDENSED INCOME STATEMENTS
Net interest income1,191,094 1,170,512 
Net interest income (1)
1,254,148 1,241,791 
Credit loss expense48,823 30,190 
Non-interest income:
Trust and investment management fees121,505 113,152 
Service charges on deposit accounts78,321 68,969 
Insurance commissions and fees47,054 45,528 
Interchange and card transaction fees 15,253 14,811 
Other charges, commissions and fees38,140 36,922 
Net gain (loss) on securities transactions16 66 
Other35,985 35,343 
Total non-interest income 336,274 314,791 
Non-interest expense:
Salaries and wages455,874 401,102 
Employee benefits93,832 87,241 
Net occupancy96,649 93,644 
Technology, furniture and equipment108,712 100,802 
Deposit insurance30,345 18,480 
Other 181,179 162,171 
Total non-interest expense 966,591 863,440 
Income before income taxes511,954 591,673 
Income taxes84,264 96,251 
Net income427,690 495,422 
Preferred stock dividends5,006 5,006 
Net income available to common shareholders$422,684 $490,416 
PER COMMON SHARE DATA
Earnings per common share - basic$6.52 $7.56 
Earnings per common share - diluted6.51 7.54 
Cash dividends per common share$2.79 $2.66 
Book value per common share at end of quarter62.41 44.59 
OUTSTANDING COMMON SHARES
Period-end common shares63,931 64,017 
Weighted-average common shares - basic64,122 64,226 
Dilutive effect of stock compensation141 208 
Weighted-average common shares - diluted64,263 64,434 
SELECTED ANNUALIZED RATIOS
Return on average assets1.15 %1.32 %
Return on average common equity15.90 20.25 
Net interest income to average earning assets 3.52 3.45 
(1) Taxable-equivalent basis assuming a 21% tax rate.


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Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
As of or for the
Nine Months Ended
September 30,
20242023
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
Loans$19,618 $17,652 
Earning assets45,838 46,390 
Total assets49,240 49,849 
Non-interest-bearing demand deposits13,771 15,557 
Interest-bearing deposits26,885 25,967 
Total deposits40,656 41,524 
Shareholders' equity3,697 3,383 
Period-End Balance:
Loans$20,055 $18,399 
Earning assets47,424 45,218 
Total assets51,008 48,747 
Total deposits41,721 40,992 
Shareholders' equity4,135 3,000 
Adjusted shareholders' equity (1)
5,051 4,779 
ASSET QUALITY
($ in thousands)
Allowance for credit losses on loans:$263,129 $242,235 
As a percentage of period-end loans1.31 %1.32 %
Net charge-offs:26,715 23,602 
Annualized as a percentage of average loans0.18 %0.18 %
Non-accrual loans:$104,877 $67,175 
As a percentage of total loans0.52 %0.37 %
As a percentage of total assets0.21 0.14 
CONSOLIDATED CAPITAL RATIOS
Common Equity Tier 1 Risk-Based Capital Ratio13.55 %13.32 %
Tier 1 Risk-Based Capital Ratio14.02 13.81 
Total Risk-Based Capital Ratio15.50 15.28 
Leverage Ratio8.80 8.17 
Equity to Assets Ratio (period-end)8.11 6.15 
Equity to Assets Ratio (average)7.51 6.79 
(1) Shareholders' equity excluding accumulated other comprehensive income (loss).

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Cullen/Frost Bankers, Inc.
TAXABLE-EQUIVALENT YIELD/COST AND AVERAGE BALANCES (UNAUDITED)
20242023
3rd Qtr2nd Qtr1st Qtr4th Qtr3rd Qtr
TAXABLE-EQUIVALENT YIELD/COST(1)
Earning Assets:     
Interest-bearing deposits5.32 %5.40 %5.40 %5.39 %5.33 %
Federal funds sold5.65 5.78 5.76 5.73 5.65 
Resell agreements5.48 5.60 5.60 5.60 5.53 
Securities(2)
3.40 3.38 3.32 3.24 3.24 
Loans, net of unearned discounts7.12 7.08 7.00 6.92 6.83 
Total earning assets5.26 5.23 5.13 5.00 4.92 
Interest-Bearing Liabilities:
Interest-bearing deposits:
Savings and interest checking0.38 %0.39 %0.42 %0.40 %0.38 %
Money market deposit accounts2.80 2.83 2.82 2.83 2.78 
Time accounts4.73 4.77 4.73 4.59 4.34 
Total interest-bearing deposits2.41 2.39 2.34 2.27 2.12 
Total deposits1.60 1.58 1.54 1.46 1.35 
Federal funds purchased5.33 5.39 5.38 5.40 5.32 
Repurchase agreements3.72 3.75 3.76 3.75 3.67 
Junior subordinated deferrable interest debentures7.14 7.47 7.34 7.45 7.34 
Subordinated notes payable and other notes4.69 4.69 4.69 4.69 4.69 
Total interest-bearing liabilities2.60 2.59 2.54 2.48 2.33 
Net interest spread2.66 2.64 2.59 2.52 2.59 
Net interest income to total average earning assets3.56 3.54 3.48 3.41 3.44 
AVERAGE BALANCES
($ in millions)
Earning Assets: 
Interest-bearing deposits$7,073 $7,156 $7,356 $7,047 $6,747 
Federal funds sold4 5 5 3 13 
Resell agreements41 85 85 86 85 
Securities - carrying value(2)
18,898 18,629 19,324 19,834 20,557 
Securities - amortized cost(2)
20,324 20,400 20,813 21,969 22,250 
Loans, net of unearned discount20,084 19,652 19,112 18,609 17,965 
Total earning assets46,100 45,527 45,883 45,579 45,366 
Interest-Bearing Liabilities:
Interest-bearing deposits:
Savings and interest checking$9,470 $9,716 $9,918 $9,986 $10,202 
Money market deposit accounts11,122 11,009 11,058 11,219 11,144 
Time accounts6,482 6,106 5,773 5,282 4,659 
Total interest-bearing deposits27,074 26,831 26,748 26,487 26,005 
Total deposits40,733 40,510 40,724 41,184 40,828 
Federal funds purchased20 40 33 18 21 
Repurchase agreements3,777 3,827 3,787 3,761 3,536 
Junior subordinated deferrable interest debentures123 123 123 123 123 
Subordinated notes payable and other notes100 100 100 99 99 
Total interest-bearing liabilities31,094 30,921 30,791 30,488 29,785 
(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.

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