Cullen/Frost Bankers (CFR) investor relations material

Executive summary

• Net income for Q2 2025 was $155.3M ($2.39/share), up 8% year-over-year, with ROA at 1.22% and ROE at 15.64%.

• First half 2025 net income rose 9.6% to $304.6M, with EPS of $4.69.

• Growth was driven by higher net interest and non-interest income, and lower credit loss expense, partially offset by increased non-interest expense.

• Expansion strategy grew financial centers by over 50% since 2018, now at 200 locations, adding 69,000 new households.

Financial highlights

• Net interest income for Q2 2025 was $429.6M–$450.6M, up 7.9–8.3% year-over-year; net interest margin rose to 3.67%.

• Average loans increased 7.2–8.0% to $20.9–$21.1B; average deposits rose 3.1% to $41.8B.

• Non-interest income grew 5.5% to $117.3M, led by trust, investment management fees, and service charges.

• Non-interest expense rose 9.5% to $347.1M, mainly due to higher salaries, technology, and advertising.

• Credit loss expense for Q2 2025 was $13.1M, with net charge-offs of $11.2M.

Outlook and guidance

• Net interest income growth for 2025 expected at 6–7%, with net interest margin projected to improve 12–15 bps over 2024's 3.53%.

• Full-year average loan growth expected in mid to high single digits; deposit growth 2–3%.

• Noninterest income growth revised up to 3.5–4.5%; noninterest expense growth in high single digits.

• Credit quality expected to remain stable, with allowance for credit losses at 1.31% of total loans.

• Management notes potential headwinds from interest rate volatility and competitive deposit pricing.