Cullen/Frost Bankers (CFR) investor relations material

Executive summary

• Net income for Q2 2026 was $170.4 million, up 9.7% year-over-year, with EPS rising to $2.70; return on average assets was 1.30% and return on average common equity was 15.41%.

• Average deposits increased to $42.6 billion and average loans grew to $22.6 billion, both up from the prior year.

• Organic growth in consumer checking accounts and loans remains industry-leading, with strong customer acquisition and a 5.9% increase in customer households year-over-year.

• Commercial and consumer business lines showed robust growth, supported by branch expansion and market disruption tailwinds; four to five new branches opened in Q2.

• Net income for the first half of 2026 was $339.7 million, up 11.5% year-over-year, driven by higher net interest and non-interest income and lower credit loss expense.

Financial highlights

• Net interest income for Q2 2026 was $470.1 million, up 4.3% year-over-year, with net interest margin at 3.75%.

• Non-interest income for Q2 2026 was $128.3 million, up 9.4% year-over-year, led by trust and investment management fees and service charges.

• Non-interest expense for Q2 2026 was $361.7 million, up 4.2% year-over-year, mainly from higher salaries, benefits, technology, and occupancy costs.

• Credit loss expense for Q2 2026 was $9.8 million, with net charge-offs of $9.5 million.

• Allowance for credit losses on loans was 1.23% of total loans at June 30, 2026, down from 1.29% at year-end 2025.

Outlook and guidance

• Full-year 2026 net interest income growth expected at 4.75%-5.25%, with net interest margin projected to improve by 10-13 bps over 2025's 3.66%.

• Average loan growth guidance raised to 7%-8%; deposit growth guidance maintained at 2%-3%.

• Non-interest income growth forecast increased to 8.5%; non-interest expense growth guidance lowered to 4.5%-5%.

• Net charge-offs expected at 15-20 bps of average loans for 2026.

• Management expects continued growth in net interest income, supported by a stable deposit base and loan growth, but notes potential headwinds from interest rate volatility and competitive deposit markets.