Cullen/Frost Bankers (CFR) investor relations material

Executive summary

• Q3 2025 net income available to common shareholders was $172.7 million ($2.67 per share), up 19.2% year-over-year, with ROAA at 1.32% and ROACE at 16.72%.

• Year-to-date net income reached $477.3 million, a 12.9% increase from the prior year, with EPS of $7.36 for the nine months.

• Average deposits rose 3.3% to $42.1 billion, and average loans increased 6.8% to $21.5 billion year-over-year.

• Organic expansion strategy continues to drive growth, with expansion deposits at $2.9 billion and loans at $2.1 billion, generating nearly 74,000 new households.

• Consumer checking households grew 5.4% year-over-year, and mortgage lending hit record levels, with expectations to reach $500 million in mortgages outstanding by year-end.

Financial highlights

• Net interest income for Q3 2025 was $463.7 million, up 9.1% year-over-year, and $1.35 billion for the first nine months.

• Net interest margin increased to 3.69% from 3.56% a year earlier, aided by a shift to higher-yielding assets.

• Non-interest income for Q3 2025 totaled $125.6 million, up 10.5% year-over-year, led by trust fees, service charges, and insurance commissions.

• Non-interest expense rose 9.0% to $352.5 million in Q3 2025, mainly due to higher salaries, technology, and other operating costs.

• Net charge-offs for Q3 were $6.6 million (12 bps of average loans), down from $11.2 million last quarter.

Outlook and guidance

• 2025 guidance assumes one 25 bps Fed funds rate cut in December, with net interest income growth expected at 7–8% and net interest margin projected to improve by 12–15 bps over 2024’s 3.53%.

• Average loan growth expected at 6.5–7.5%, and average deposit growth at 2.5–3.5% for the year.

• Non-interest income growth forecast raised to 6.5–7.5% for 2025; non-interest expense growth to remain at 8–9%.

• Net charge-offs expected at 15–20 bps of average loans for 2025, a 5 bps improvement from prior guidance.

• Management expects continued above-market organic growth, supported by expansion into new markets and a focus on digital banking and customer experience.