Cullen/Frost Bankers (CFR) investor relations material

Executive summary

• Net income for Q1 2026 was $169.3 million, up 13.4% year-over-year, with EPS rising to $2.65 from $2.30, driven by higher net interest and non-interest income and lower credit loss expense.

• Return on average assets was 1.32% and return on average common equity was 15.15%.

• Average loans grew 5.9% to $22.0 billion and average deposits increased 1.4% to $42.2 billion year-over-year.

• The company remains well-capitalized, with all regulatory capital ratios exceeding required minimums.

• Consumer checking households grew 5.3% year-over-year; consumer loan balances increased 19%.

Financial highlights

• Net interest margin for Q1 was 3.74%, up from 3.60% a year ago.

• Net interest income increased $22.3 million (5.4%) year-over-year; non-interest income grew 9.9% to $136.3 million.

• Non-interest expense rose 5.1%, mainly due to higher salaries, benefits, technology, and fraud losses.

• Credit loss expense decreased to $6.7 million from $13.1 million a year ago; net charge-offs were $5.7 million.

• Net unrealized loss on available-for-sale portfolio was $1.15 billion, up from $1.04 billion last quarter.

Outlook and guidance

• Guidance for full year 2026 assumes a 125 basis point Fed funds rate cut in Q4.

• Management expects continued asset and loan growth, with a focus on maintaining strong credit quality and capital levels.

• Quarterly common dividend increased by 3.0% to $1.03 per share, payable June 15, 2026.

• $230 million remains under the current $300 million share repurchase authorization, expiring January 2027.

• Plans to open 10-12 new branches over the remainder of 2026.