Cullen/Frost Q3 Earnings Beat on Strong NII & Fee Income Growth

Cullen/Frost Bankers, Inc. CFR reported third-quarter 2025 earnings per share of $2.67, up 19.2% from the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 12.2%.Results were primarily aided by a rise in net interest income (NII) and non-interest income, alongside a higher loan and deposit balance in the quarter. Also, a lower allowance for credit losses on loans was another positive. However, an increase in non-interest expenses remains a concern.The company reported net income available to its common shareholders of $172.7 million, up 19.2% from the prior-year quarter.CFR’s Revenues & Expenses IncreaseThe company’s total revenues were $589.3 million in the third quarter, up 13.7% year over year. Also, the top line surpassed the Zacks Consensus Estimate by 3.5%.NII on a taxable-equivalent basis increased 2.9% year over year to $463.7 million. The net interest margin (NIM) expanded 13 basis points (bps) year over year to 3.69%. Our estimates for NII and NIM were $448.2 million and 3.71%, respectively.Non-interest income improved 10.5% year over year to $125.6 million. The rise was attributed to increases in all components, except for net gain on securities transactions. Our estimate for non-interest income was $115.6 million.Non-interest expenses of $352.5 million rose 8.9% year over year. Our estimate for non-interest expenses was $350 million.CFR’s Loans & Deposit Balance RiseAs of Sept. 30, 2025, total loans were $21.4 billion, up 1.8% sequentially. Total deposits amounted to $42.5 billion, which rose 1.9% from the previous quarter. Our estimates for total loans and total deposits were $21 billion and $40.8 billion, respectively.Cullen/Frost’s Credit Quality ImprovesAs of Sept. 30, 2025, the company recorded credit loss expenses of $6.8 million compared with $19.4 million in the prior-year quarter.The allowance for credit losses on loans, as a percentage of total loans, was 1.31%, unchanged from the year-ago period.Net charge-offs, annualized as a percentage of average loans, decreased 7 basis points year over year to 0.12%.CFR’s Capital Ratios & Profitability Ratios ImproveAs of Sept. 30, 2025, the Tier 1 risk-based capital ratio was 14.59%, up from 14.02% at the end of the year-ago quarter.The total risk-based capital ratio was 16.04%, up from 15.50% as of the prior-year quarter. The common equity Tier 1 risk-based capital ratio was 14.14%, up from the year-ago quarter’s 13.55%.The leverage ratio increased to 9.00% from 8.80%.Return on average assets and return on average common equity were 1.32% and 16.72% compared with 1.16% and 15.48% in the prior-year quarter, respectively.CFR Dividend UpdateThe company declared a fourth-quarter cash dividend of $1.00 per common share. The dividend will be paid out on Dec. 15, 2025, to shareholders of record as of Nov. 29.Our Viewpoint on Cullen FrostCFR is well-positioned for revenue growth, given the steady improvement in NII and non-interest income. A solid capital position is an added advantage. The company’s efforts to expand its presence in Texas markets look encouraging. However, high expenses may affect its financials to some extent in the near term.Cullen/Frost Bankers, Inc. Price, Consensus and EPS Surprise Cullen/Frost Bankers, Inc. price-consensus-eps-surprise-chart | Cullen/Frost Bankers, Inc. QuoteCurrently, CFR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other BanksPopular, Inc. BPOP reported third-quarter 2025 earnings per share of $3.14, which surpassed the Zacks Consensus Estimate of $3.04. The bottom line compared favorably with $2.16 reported in the year-ago quarter.BPOP's results benefited from a rise in net interest income, fee income and loan balances. However, lower deposit balance, elevated operating expenses and higher provisions are headwinds.UMB Financial Corp. UMBF reported third-quarter 2025 operating earnings per share of $2.70, which beat the Zacks Consensus Estimate of $2.48. The bottom line also compared favorably with $2.25 in the year-ago quarter.The company delivered a strong quarterly performance, supported by organic growth within its legacy UMBF operations and the integration benefits of its January 2025 acquisition of Heartland Financial USA, Inc. The results were further bolstered by increases in net interest income and non-interest income. However, the overall performance was partially offset by deteriorating asset quality and elevated non-interest expense.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Popular, Inc. (BPOP): Free Stock Analysis Report Cullen/Frost Bankers, Inc. (CFR): Free Stock Analysis Report UMB Financial Corporation (UMBF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks