EX-99.1 2 a2q24formxex991xpressrelea.htm EX-99.1 - 2Q24 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    
July 25, 2024



CULLEN/FROST REPORTS SECOND QUARTER RESULTS
Board increases quarterly common dividend by 3.3 percent to $0.95



SAN ANTONIO -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported second quarter 2024 results.
Net income available to common shareholders for the second quarter of 2024 was $143.8 million compared to $160.4 million for the second quarter of 2023. On a per-share basis, net income available to common shareholders for the second quarter of 2024 was $2.21 per diluted common share, compared to $2.47 per diluted common share reported a year earlier. Returns on average assets and average common equity were 1.18 percent and 17.08 percent, respectively, for the second quarter of 2024 compared to 1.30 percent and 19.36 percent, respectively, for the same period a year earlier.
For the second quarter of 2024, net interest income on a taxable-equivalent basis was $417.6 million, up 2.2 percent compared to the same quarter in 2023. Average loans for the second quarter of 2024 increased $2.0 billion, or 11.3 percent, to $19.7 billion, from the $17.7 billion reported for the second quarter a year earlier, and increased $540.0 million, or 2.8 percent, compared to the first quarter of 2024. Average deposits for the second quarter decreased $496.8 million, or 1.2 percent, to $40.5 billion, compared to the $41.0 billion reported for last year's second quarter, and decreased $214.7 million, or 0.5 percent, compared to the first quarter of 2024. Average non-interest-bearing deposits were down $297.6 million, or 2.1 percent, from the first quarter. Average interest-bearing deposits were up $82.9 million, or 0.3 percent, from the first quarter.


“Our people continue to execute on our organic growth strategy, and the results are shown in our second-quarter earnings as well as our solid loan growth,” said Cullen/Frost Chairman and CEO Phil Green. “We have the best bankers in the best markets, providing the best customer experience of any bank in our markets, and our continued investments will set us up to be able to extend our value proposition to more consumers and businesses throughout the state.”
For the first six months of 2024, net income available to common shareholders was $277.9 million, down 17.4 percent compared to $336.4 million for the first six months of 2023. Diluted EPS available to common shareholders for the first six months of 2024 was $4.27 compared to $5.17 in the year-earlier period. Returns on average assets and average common equity for the first six months of 2024 were 1.14 percent and 16.13 percent, respectively, compared to 1.35 percent and 20.92 percent, respectively, for the same period in 2023.


Noted financial data for the second quarter of 2024 follows:

•The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios at the end of the second quarter of 2024 were 13.35 percent, 13.82 percent and 15.27 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 $417.6 million for the second quarter of 2024, an increase of 2.2 percent, compared to the prior year period. Net interest margin was 3.54 percent for the second quarter compared to 3.48 percent for the first quarter of 2024 and 3.45 percent for the second quarter of 2023.
•Non-interest income for the second quarter of 2024 totaled $111.2 million, an increase of $7.7 million, or 7.4 percent, from the $103.5 million reported for the second quarter of 2023. Trust and investment management fees increased $2.0 million or 5.1 percent, compared to the second quarter of 2023. The increase in trust and investment management fees during the second quarter was primarily related to an increase in investment management fees (up $2.8 million), and oil and gas fees (up $906,000), partly offset by decreases in estate fees (down $996,000) and real estate fees (down $753,000). Service charges

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on deposit accounts increased $2.6 million or 11.2 percent, compared to the second quarter of 2023. The increase in the second quarter was primarily related to increases in commercial service charges (up $1.3 million) and commercial and consumer overdraft charges (up $1.1 million), among other things. Other non-interest income increased $1.0 million, or 10.1 percent, compared to the second quarter of 2023. The increase was primarily related to an increase in public finance underwriting fees (up $1.1 million). Insurance commissions and fees increased $979,000, or 7.6 percent, compared to the second quarter of 2023. The increase in the second quarter was primarily the result of an increase in commission income (up $891,000), mainly related to commercial lines property and casualty commissions.
•Non-interest expense was $317.0 million for the second quarter of 2024, up $31.9 million, or 11.2 percent, compared to the $285.0 million reported for the second quarter a year earlier. Salaries and wages expense increased $18.0 million, or 13.5 percent, compared to the second 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 $2.0 million, or 7.5 percent, compared to the second quarter of 2023. The increase in employee benefits expense was primarily related to increases in medical/dental benefits expense (up $1.5 million) and payroll taxes (up $1.3 million), partly offset by a decrease in 401(k) plan expense (down $618,000), among other things. Other non-interest expense increased $6.1 million, or 11.3 percent, compared to the second quarter of 2023. The increase in other non-interest expense during the second quarter of 2024 included increases in professional services expense (up $862,000), which was primarily related to information technology services; advertising/promotions expense (up $757,000); and fraud losses (up $500,000), among other things. Technology, furniture, and equipment expense increased $2.9 million, or 8.8 percent, compared to the second quarter of 2023. The increase was primarily related to increased cloud services expense.
•For the second quarter of 2024, the company reported a credit loss expense of $15.8 million, and reported net loan charge-offs of $9.7 million. This compares to a credit loss expense of $13.7 million and net loan charge-offs of $7.3 million for the first quarter of 2024 and a credit loss expense of $9.9 million and net

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loan charge-offs of $9.8 million for the second quarter of 2023. The allowance for credit losses on loans as a percentage of total loans was 1.28 percent at June 30, 2024, compared to 1.29 percent at the end of the first quarter of 2024 and 1.32 percent at the end of the second quarter of 2023. Non-accrual loans were $75.0 million at the end of the second quarter of 2024, compared to $71.5 million at the end of the first quarter of 2024 and $67.8 million at the end of the second quarter of 2023.

The Cullen/Frost board declared a third-quarter cash dividend of $0.95 per common share, representing a 3.3 percent increase compared to the previous quarterly dividend of $0.92 per share. The dividend on common stock is payable September 13, 2024 to shareholders of record on August 30 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 September 16, 2024 to shareholders of record on August 30 of this year.
Cullen/Frost Bankers, Inc. will host a conference call on Thursday, July 25, 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, July 28, 2024 at 1-877-660-6853 with Conference ID # of 13747676. 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/


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Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding company, headquartered in San Antonio, with $48.8 billion in assets at June 30, 2024. 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
2nd Qtr1st Qtr4th Qtr3rd Qtr2nd Qtr
CONDENSED INCOME STATEMENTS
Net interest income$396,712 $390,051 $388,152 $385,426 $385,266 
Net interest income (1)
417,621 411,367 409,904 407,353 408,594 
Credit loss expense15,787 13,650 15,981 11,185 9,901 
Non-interest income:
Trust and investment management fees41,404 39,085 40,163 37,616 39,392 
Service charges on deposit accounts26,114 24,795 24,535 23,603 23,487 
Insurance commissions and fees13,919 18,296 12,743 13,636 12,940 
Interchange and card transaction fees 5,351 4,474 4,608 4,672 5,250 
Other charges, commissions, and fees13,020 12,060 12,104 13,128 12,090 
Net gain (loss) on securities transactions— — — 12 33 
Other11,382 12,667 19,598 13,331 10,336 
Total non-interest income 111,190 111,377 113,751 105,998 103,528 
Non-interest expense:
Salaries and wages151,237 148,000 146,616 137,562 133,195 
Employee benefits28,802 35,970 28,065 26,527 26,792 
Net occupancy32,374 31,778 30,752 31,581 31,714 
Technology, furniture, and equipment35,951 34,995 34,484 35,278 33,043 
Deposit insurance8,383 14,724 58,109 6,033 6,202 
Other 60,217 60,750 67,196 56,275 54,096 
Total non-interest expense 316,964 326,217 365,222 293,256 285,042 
Income before income taxes175,151 161,561 120,700 186,983 193,851 
Income taxes29,652 25,871 18,149 31,332 31,733 
Net income145,499 135,690 102,551 155,651 162,118 
Preferred stock dividends1,669 1,669 1,669 1,668 1,669 
Net income available to common shareholders$143,830 $134,021 $100,882 $153,983 $160,449 
PER COMMON SHARE DATA
Earnings per common share - basic$2.21 $2.06 $1.55 $2.38 $2.47 
Earnings per common share - diluted2.21 2.06 1.55 2.38 2.47 
Cash dividends per common share0.92 0.92 0.92 0.92 0.87 
Book value per common share at end of quarter55.02 54.36 55.64 44.59 50.55 
OUTSTANDING COMMON SHARES
Period-end common shares63,989 64,251 64,185 64,017 64,120 
Weighted-average common shares - basic64,193 64,216 64,139 64,067 64,241 
Dilutive effect of stock compensation140 156 176 172 187 
Weighted-average common shares - diluted64,333 64,372 64,315 64,239 64,428 
SELECTED ANNUALIZED RATIOS
Return on average assets1.18 %1.09 %0.82 %1.25 %1.30 %
Return on average common equity17.08 15.22 13.51 18.93 19.36 
Net interest income to average earning assets 3.54 3.48 3.41 3.44 3.45 
(1) Taxable-equivalent basis assuming a 21% tax rate.

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Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
20242023
2nd Qtr1st Qtr4th Qtr3rd Qtr2nd Qtr
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
Loans$19,652 $19,112 $18,609 $17,965 $17,664 
Earning assets45,527 45,883 45,579 45,366 45,929 
Total assets48,960 49,324 49,087 48,804 49,317 
Non-interest-bearing demand deposits13,679 13,976 14,697 14,823 15,231 
Interest-bearing deposits26,831 26,748 26,487 26,005 25,776 
Total deposits40,510 40,724 41,184 40,828 41,007 
Shareholders' equity3,533 3,687 3,108 3,372 3,470 
Period-End Balance:
Loans$19,996 $19,388 $18,824 $18,399 $17,746 
Earning assets45,344 46,164 47,124 45,218 45,146 
Total assets48,843 49,505 50,845 48,747 48,597 
Total deposits40,318 40,806 41,921 40,992 40,701 
Shareholders' equity3,666 3,638 3,716 3,000 3,387 
Adjusted shareholders' equity (1)
4,975 4,914 4,836 4,779 4,692 
ASSET QUALITY
($ in thousands)
Allowance for credit losses on loans:$256,307 $250,297 $245,996 $242,235 $233,619 
As a percentage of period-end loans1.28 %1.29 %1.31 %1.32 %1.32 %
Net charge-offs:$9,726 $7,349 $10,884 $4,992 $9,828 
Annualized as a percentage of average loans0.20 %0.15 %0.23 %0.11 %0.22 %
Non-accrual loans:$74,987 $71,515 $60,907 $67,175 $67,781 
As a percentage of total loans0.38 %0.37 %0.32 %0.37 %0.38 %
As a percentage of total assets0.15 0.14 0.12 0.14 0.14 
CONSOLIDATED CAPITAL RATIOS
Common Equity Tier 1 Risk-Based Capital Ratio13.35 %13.41 %13.25 %13.32 %13.42 %
Tier 1 Risk-Based Capital Ratio13.82 13.89 13.73 13.81 13.92 
Total Risk-Based Capital Ratio15.27 15.35 15.18 15.28 15.39 
Leverage Ratio8.62 8.44 8.35 8.17 8.11 
Equity to Assets Ratio (period-end)7.51 7.35 7.31 6.15 6.97 
Equity to Assets Ratio (average)7.22 7.47 6.33 6.91 7.04 
(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)
Six Months Ended
June 30,
20242023
CONDENSED INCOME STATEMENTS
Net interest income786,763 785,086 
Net interest income (1)
828,988 834,438 
Credit loss expense29,437 19,005 
Non-interest income:
Trust and investment management fees80,489 75,536 
Service charges on deposit accounts50,909 45,366 
Insurance commissions and fees32,215 31,892 
Interchange and card transaction fees 9,825 10,139 
Other charges, commissions and fees25,080 23,794 
Net gain (loss) on securities transactions— 54 
Other24,049 22,012 
Total non-interest income 222,567 208,793 
Non-interest expense:
Salaries and wages299,237 263,540 
Employee benefits64,772 60,714 
Net occupancy64,152 62,063 
Technology, furniture and equipment70,946 65,524 
Deposit insurance23,107 12,447 
Other 120,967 105,896 
Total non-interest expense 643,181 570,184 
Income before income taxes336,712 404,690 
Income taxes55,523 64,919 
Net income281,189 339,771 
Preferred stock dividends3,338 3,338 
Net income available to common shareholders$277,851 $336,433 
PER COMMON SHARE DATA
Earnings per common share - basic$4.27 $5.18 
Earnings per common share - diluted4.27 5.17 
Cash dividends per common share$1.84 $1.74 
Book value per common share at end of quarter55.02 50.55 
OUTSTANDING COMMON SHARES
Period-end common shares63,989 64,120 
Weighted-average common shares - basic64,205 64,307 
Dilutive effect of stock compensation147 225 
Weighted-average common shares - diluted64,352 64,532 
SELECTED ANNUALIZED RATIOS
Return on average assets1.14 %1.35 %
Return on average common equity16.13 20.92 
Net interest income to average earning assets 3.51 3.46 
(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
Six Months Ended
June 30,
20242023
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
Loans$19,382 $17,493 
Earning assets45,705 46,911 
Total assets49,142 50,320 
Non-interest-bearing demand deposits13,827 15,930 
Interest-bearing deposits26,790 25,947 
Total deposits40,617 41,877 
Shareholders' equity3,610 3,388 
Period-End Balance:
Loans$19,996 $17,746 
Earning assets45,344 45,146 
Total assets48,843 48,597 
Total deposits40,318 40,701 
Shareholders' equity3,666 3,387 
Adjusted shareholders' equity (1)
4,975 4,692 
ASSET QUALITY
($ in thousands)
Allowance for credit losses on loans:$256,307 $233,619 
As a percentage of period-end loans1.28 %1.32 %
Net charge-offs:17,075 18,610 
Annualized as a percentage of average loans0.18 %0.21 %
Non-accrual loans:$74,987 $67,781 
As a percentage of total loans0.38 %0.38 %
As a percentage of total assets0.15 0.14 
CONSOLIDATED CAPITAL RATIOS
Common Equity Tier 1 Risk-Based Capital Ratio13.35 %13.42 %
Tier 1 Risk-Based Capital Ratio13.82 13.92 
Total Risk-Based Capital Ratio15.27 15.39 
Leverage Ratio8.62 8.11 
Equity to Assets Ratio (period-end)7.51 6.97 
Equity to Assets Ratio (average)7.35 6.73 
(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
2nd Qtr1st Qtr4th Qtr3rd Qtr2nd Qtr
TAXABLE-EQUIVALENT YIELD/COST(1)
Earning Assets:     
Interest-bearing deposits5.40 %5.40 %5.39 %5.33 %5.05 %
Federal funds sold5.78 5.76 5.73 5.65 5.35 
Resell agreements5.60 5.60 5.60 5.53 5.26 
Securities(2)
3.38 3.32 3.24 3.24 3.24 
Loans, net of unearned discounts7.08 7.00 6.92 6.83 6.64 
Total earning assets5.23 5.13 5.00 4.92 4.77 
Interest-Bearing Liabilities:
Interest-bearing deposits:
Savings and interest checking0.39 %0.42 %0.40 %0.38 %0.41 %
Money market deposit accounts2.83 2.82 2.83 2.78 2.68 
Time accounts4.77 4.73 4.59 4.34 3.77 
Total interest-bearing deposits2.39 2.34 2.27 2.12 1.87 
Total deposits1.58 1.54 1.46 1.35 1.18 
Federal funds purchased5.39 5.38 5.40 5.32 4.97 
Repurchase agreements3.75 3.76 3.75 3.67 3.52 
Junior subordinated deferrable interest debentures7.47 7.34 7.45 7.34 6.84 
Subordinated notes payable and other notes4.69 4.69 4.69 4.69 4.69 
Total interest-bearing liabilities2.59 2.54 2.48 2.33 2.11 
Net interest spread2.64 2.59 2.52 2.59 2.66 
Net interest income to total average earning assets3.54 3.48 3.41 3.44 3.45 
AVERAGE BALANCES
($ in millions)
Earning Assets: 
Interest-bearing deposits$7,156 $7,356 $7,047 $6,747 $6,880 
Federal funds sold5 5 3 13 22 
Resell agreements85 85 86 85 85 
Securities - carrying value(2)
18,629 19,324 19,834 20,557 21,278 
Securities - amortized cost(2)
20,400 20,813 21,969 22,250 22,737 
Loans, net of unearned discount19,652 19,112 18,609 17,965 17,664 
Total earning assets45,527 45,883 45,579 45,366 45,929 
Interest-Bearing Liabilities:
Interest-bearing deposits:
Savings and interest checking$9,716 $9,918 $9,986 $10,202 $10,862 
Money market deposit accounts11,009 11,058 11,219 11,144 11,431 
Time accounts6,106 5,773 5,282 4,659 3,483 
Total interest-bearing deposits26,831 26,748 26,487 26,005 25,776 
Total deposits40,510 40,724 41,184 40,828 41,007 
Federal funds purchased40 33 18 21 33 
Repurchase agreements3,827 3,787 3,761 3,536 3,719 
Junior subordinated deferrable interest debentures123 123 123 123 123 
Subordinated notes payable and other notes100 100 99 99 99 
Total interest-bearing liabilities30,921 30,791 30,488 29,785 29,750 
(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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