Cullen/Frost Q4 Earnings Beat on Strong Y/Y NII & Fee Income Growth

Cullen/Frost Bankers, Inc. CFR reported fourth-quarter 2025 adjusted earnings per share of $2.57, beating the Zacks Consensus Estimate of $2.47 per share. The bottom line also rose from $2.36 in the prior-year quarter. Results benefited from higher net interest income and non-interest income, supported by growth in loan and deposit balances. However, elevated non-interest expenses remained a headwind.Results exclude certain non-recurring items. After considering those, the company reported net income available to its common shareholders of $164.6 million, up 7.4% from $153.2 million in the fourth quarter of 2024.For 2025, adjusted earnings per share of $9.92 topped the Zacks Consensus Estimate of $9.84 per share. The metric also rose from $8.88 in the prior-year period. Net income available to its common shareholders was $641.8 million, up 11.5% from 2024.CFR’s Revenues & Expenses IncreaseTotal revenues were $603.4 million, topping the Zacks Consensus Estimate by 3%. The metric also improved from the year-ago revenues of $556.44 million.Revenues were $2.32 billion for 2025, beating the Zacks Consensus Estimate of $2.30 billion. The metrics increased from $2.15 billion in 2024.Net interest income (NII) on a taxable-equivalent basis rose 8.6% year over year to $471.2 million. The net interest margin (NIM) expanded 13 basis points year over year to 3.66%. Our estimates for NII and NIM were $457.3 million and 3.69%, respectively.Non-interest income increased 7.6% year over year to $132.2 million. The rise was driven by higher trust and investment management fees, service charges on deposit accounts and other non-interest income, including increased income from customers’ derivatives trading activity. Our estimate for non-interest income was $122.5 million.Non-interest expenses totaled $371.7 million, up 10.6% year over year. The increase was largely attributable to higher salaries and wages, employee benefits and other non-interest expenses, including several one-time expense items recognized in the quarter. These items were partly offset by a reversal related to a special FDIC insurance assessment. Our estimate for non-interest expenses was $359.2 million.CFR’s Loans & Deposit Balance RisesTotal loans for the fourth quarter of 2025 were $21.9 billion, reflecting a 2.1% increase from the prior quarter. Deposits were $43.3 billion, up nearly 1% on a sequential basis. Our estimates for total loans and total deposits were $21.4 billion and $41.9 billion, respectively.Cullen/Frost’s Credit Quality ImprovesFor the fourth quarter of 2025, the company recorded credit loss expenses of $11.2 million compared with $16.2 million in the prior-year quarter. Net charge-offs were $5.8 million, down from $14.0 million a year ago.The allowance for credit losses on loans, as a percentage of total loans, was 1.29% as of Dec. 31, 2025, compared with 1.30% at the end of the prior-year quarter. Non-accrual loans were $70.5 million, lower than $78.9 million at the end of 2024.CFR’s Capital Ratios & Profitability RatiosAs of Dec. 31, 2025, the common equity Tier 1 risk-based capital ratio was 14.06%, up from 13.62% at the end of the year-ago quarter. The Tier 1 risk-based capital ratio increased to 14.50% from 14.07%, while the total risk-based capital ratio rose to 15.95% from 15.53%.The leverage ratio improved to 8.80% from 8.63% a year ago.Return on average assets was 1.24% compared with 1.16% in the prior-year quarter, while return on average common equity was 15.66% versus 15.81% a year earlier.CFR Dividend & Share Repurchase UpdateThe company declared a first-quarter cash dividend of $1.00 per common share, payable March 13, 2026, to shareholders of record as of Feb. 27, 2026.In the fourth quarter, Cullen/Frost repurchased 653,913 shares for $80.7 million, completing its $150-million 2025 share repurchase authorization.Additionally, the board approved a share repurchase program authorizing up to $300 million of common stock purchases over a one-year period.Our Viewpoint on Cullen/FrostCFR continues to benefit from steady growth in net interest income, improving margins, and solid loan and deposit growth, supported by a strong capital position. The company’s ongoing organic expansion across Texas markets remains encouraging. However, elevated expense levels could weigh on near-term profitability.Cullen/Frost Bankers, Inc. Price, Consensus and EPS Surprise  Cullen/Frost Bankers, Inc. price-consensus-eps-surprise-chart | Cullen/Frost Bankers, Inc. Quote Currently, 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.’s BPOP fourth-quarter 2025 adjusted earnings per share of $3.40 surpassed the Zacks Consensus Estimate of $3.02. The bottom line compared favorably with $2.51 in the year-ago quarter.BPOP’s results benefited primarily from a rise in net interest income, fee income and loan balances. However, a lower deposit balance, elevated operating expenses and higher provisions were headwinds.Hancock Whitney Corp.’s HWC fourth-quarter 2025 earnings per share of $1.49 beat the Zacks Consensus Estimate by a penny. Further, the bottom line rose 6.4% from the prior-year quarter.HWC’s results benefited from an increase in non-interest income and NII. Also, higher loans and deposits were another positive. However, higher expenses alongside increased provisions were headwinds.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.See Our Newest 5 Stocks Set to Double Picks >>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 Hancock Whitney Corporation (HWC): 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