Cullen/Frost Bankers Reports Mixed Q3 Results, Net Income Declines Amid Rising Expenses

Cullen/Frost Bankers, Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, reflecting a mixed performance compared to the same periods in 2023. Total assets increased to $51.0 billion from $50.8 billion at the end of 2023, while total deposits slightly decreased to $41.7 billion from $41.9 billion. Notably, total cash and cash equivalents rose to $9.2 billion, up from $8.7 billion.

The company experienced growth in net loans, which rose to $19.8 billion, compared to $18.6 billion at the end of 2023. This increase was driven by significant growth in commercial real estate loans, which rose by $798 million, and consumer real estate loans, which increased by $462 million. However, commercial and industrial loans decreased by $144 million.

For the three months ended September 30, 2024, Cullen/Frost reported total interest income of $608.2 million, up from $561.1 million in 2023. Net interest income also increased to $404.3 million from $385.4 million. Non-interest income rose to $113.7 million, compared to $106.0 million in the prior year. However, net income for the quarter decreased to $146.5 million from $155.7 million, with earnings per share dropping to $2.24 from $2.38.

For the nine months ended September 30, 2024, net income was $427.7 million, down from $495.4 million in 2023, with earnings per share decreasing to $6.52 from $7.56. The decline in net income was attributed to increased non-interest expenses, which rose by 11.9% to $966.6 million, driven primarily by higher salaries and wages, employee benefits, and deposit insurance expenses.

Cullen/Frost's allowance for credit losses increased to $263.1 million, reflecting a ratio of 1.31% of total loans, unchanged from the end of 2023. The company reported credit loss expenses of $48.8 million for the nine months, up from $38.2 million in the same period last year.

Strategically, the company authorized a $150 million stock repurchase program effective until January 2025, repurchasing 489,862 shares for $50 million during the nine months. The company also reported a significant increase in trust and investment management fees, contributing to the growth in non-interest income.

Overall, while Cullen/Frost Bankers, Inc. showed resilience in certain areas, challenges in profitability and rising expenses impacted its financial performance compared to the previous fiscal period.