Board declares second quarter dividend on common and preferred stock

SAN ANTONIO, April 25, 2024 /PRNewswire/ -- Cullen/Frost Bankers, Inc. (NYSE: CFR) today reported first quarter 2024 results. Net income available to common shareholders for the first quarter of 2024 was $134.0 million, and was impacted by a $7.7 million ($6.1 million after tax) addition to the estimated FDIC special assessment. Excluding this item in the first quarter, net income available to common shareholders would have been approximately $140.1 million, representing a 20.4 percent decrease compared to the first quarter of 2023. On a per-share basis, net income available to common shareholders for the first quarter of 2024 was $2.06 per diluted common share, compared to $2.70 per diluted common share reported a year earlier. Excluding the after-tax impact of the FDIC special assessment accrual in the first quarter, EPS would have been $2.15, representing a 20.4 percent decrease compared to the first quarter of 2023. Returns on average assets and average common equity were 1.09 percent and 15.22 percent, respectively, for the first quarter of 2024 compared to 1.39 percent and 22.59 percent, respectively, for the same period a year earlier. Adjusted for the FDIC special assessment, returns on average assets and average common equity for the first quarter would have been 1.14 percent and 15.92 percent, respectively.

For the first quarter of 2024, net interest income on a taxable-equivalent basis was $411.4 million, down 3.4 percent compared to the same quarter in 2023. Average loans for the first quarter of 2024 increased $1.8 billion, or 10.4 percent, to $19.1 billion, from the $17.3 billion reported for the first quarter a year earlier, and increased $503.0 million, or 2.7 percent, compared to the fourth quarter of 2023. Average deposits for the first quarter decreased $2.0 billion, or 4.8 percent, to $40.7 billion, compared to the $42.8 billion reported for last year's first quarter, and decreased $459.2 million, or 1.1 percent, compared to the fourth quarter of 2023. Average non-interest-bearing deposits were down $720.2 million, or 4.9 percent, from the fourth quarter. Average interest-bearing deposits were up $261.0 million, or 1.0 percent, from the fourth quarter.

"The solid earnings for the first quarter show the results of our organic growth strategy and the hard work of our bankers," said Cullen/Frost Chairman and CEO Phil Green. "The steady increase in loans and consistent growth in both commercial and consumer relationships reflect Frost's enduring strength and stability. We continue to make investments to fuel the sustained growth of our business into the future, including opening the second new location in our Austin expansion on April 1 of this year. I want to commend all the Frost bankers who continue to provide world-class service to more people throughout the state as we pursue our organic growth initiatives."

Noted financial data for the first quarter of 2024 follows:

  • The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios at the end of the first quarter of 2024 were 13.41 percent, 13.89 percent and 15.35 percent, respectively, and continue to be in excess of well-capitalized levels and exceed Basel III minimum requirements.
  • Net interest income on a taxable-equivalent basis was $411.4 million for the first quarter of 2024, a decrease of 3.4 percent, compared to the prior year period. Net interest margin was 3.48 percent for the first quarter compared to 3.41 percent for the fourth quarter of 2023 and compared to 3.47 percent for the first quarter of 2023.
  • Non-interest income for the three months ended March 31, 2024 totaled $111.4 million, an increase of $6.1 million, or 5.8 percent, from the $105.3 million reported for the first quarter of 2023. Trust and investment management fees increased $2.9 million or 8.1 percent, compared to the first quarter of 2023. The increase in trust and investment management fees during the first quarter was primarily related to an increase in investment management fees (up $2.7 million), driven by an increase in the value of customer assets under management. Service charges on deposit accounts increased $2.9 million or 13.3 percent, compared to the first quarter of 2023. The increase in the first quarter was primarily related to increases in commercial service charges (up $1.4 million) and commercial and consumer overdraft charges (up $1.3 million), among other things. Other non-interest income increased $991,000, or 8.5 percent, compared to the first quarter of 2023. The increase was primarily related to increases in public finance underwriting fees (up $2.6 million) and income from customer derivative and foreign exchange transactions (up $737,000), among other things, partly offset by a decrease in sundry and other miscellaneous income (down $1.9 million).
  • Non-interest expense was $326.2 million for the first quarter of 2024, up $41.1 million, or 14.4 percent, compared to the $285.1 million reported for the first quarter a year earlier. Excluding the additional FDIC special assessment that we accrued during the first quarter, total non-interest expense would have increased by $33.4 million, or 11.7 percent, compared to the first quarter of 2023. Salaries and wages expense increased $17.7 million, or 13.5 percent, compared to the first quarter of 2023. The increase in salaries and wages was primarily related to increases in salaries due to annual merit and market increases and an increase in the number of employees. The increase in the number of employees was partly related to our investment in organic expansion in the Houston, Dallas and Austin markets. Employee benefits expense increased by $2.0 million, or 6.0 percent, compared to the first quarter of 2023. The increase in employee benefits expense was related to an increase in medical/dental benefits expense (up $1.5 million) and an increase in payroll taxes (up $1.4 million), among other things, partly offset by a decrease in 401(k) plan expense (down $753,000). Other non-interest expense increased $9.0 million, or 17.3 percent, compared to the first quarter of 2023. The increase in other non-interest expense during the first quarter of 2024 included increases in advertising/promotions expense (up $4.0 million); professional services expense (up $1.2 million), which was primarily related to information technology services; and fraud losses (up $710,000), among other things. Technology, furniture, and equipment expense increased $2.5 million, or 7.7 percent, compared to the first quarter of 2023. The increase was primarily related to increases in cloud services expense.
  • For the first quarter of 2024, the company reported a credit loss expense of $13.7 million, and reported net charge-offs of $7.3 million. This compares to a credit loss expense of $16.0 million and net charge-offs of $10.9 million for the fourth quarter of 2023 and a credit loss expense of $9.1 million and net charge-offs of $8.8 million for the first quarter of 2023. The allowance for credit losses on loans as a percentage of total loans was 1.29 percent at March 31, 2024, compared to 1.31 percent at the end of the fourth quarter of 2023 and 1.32 percent at the end of the first quarter of 2023. Non-accrual loans were $71.5 million at the end of the first quarter of 2024, compared to $60.9 million at the end of the fourth quarter of 2023 and $38.4 million at the end of the first quarter of 2023.

The Cullen/Frost board declared a second-quarter cash dividend of $0.92 per common share. The dividend on common stock is payable June 14, 2024 to shareholders of record on May 31 of this year. The board of directors also declared a cash dividend of $11.125 per share of Series B Preferred Stock (or $0.278125 per depositary share). The depositary shares representing the Series B Preferred Stock are traded on the NYSE under the symbol "CFR PrB." The Series B Preferred Stock dividend is payable June 17, 2024 to shareholders of record on May 31 of this year.

Cullen/Frost Bankers, Inc. will host a conference call on Thursday, April 25, 2024, at 1 p.m. Central Time (CT) to discuss the results for the quarter. The media and other interested parties are invited to access the call in a "listen only" mode at 1-877-709-8150 or via webcast on our investor relations website linked below. Playback of the conference call will be available after 5 p.m. CT on the day of the call until midnight Sunday, April 28, 2024 at 1-877-660-6853 with Conference ID # of 13745726. A replay of the call will also be available by webcast at the URL listed below after 5 p.m. CT on the day of the call.

Cullen/Frost investor relations website: https://investor.frostbank.com/

Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding company, headquartered in San Antonio, with $49.5 billion in assets at March 31, 2024. Frost provides a wide range of banking, investments and insurance services to businesses and individuals across Texas in the Austin, Corpus Christi, Dallas, Fort Worth, Houston, Permian Basin, Rio Grande Valley and San Antonio regions. Founded in 1868, Frost has helped clients with their financial needs during three centuries. Additional information is available at www.frostbank.com.

Forward-Looking Statements and Factors that Could Affect Future Results

Certain statements contained in this Earnings Release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the SEC, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of Cullen/Frost or its management or Board of Directors, including those relating to products, services or operations; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes", "anticipates", "expects", "intends", "targeted", "continue", "remain", "will", "should", "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

  • The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board.
  • Inflation, interest rate, securities market, and monetary fluctuations.
  • Local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact.
  • Changes in the financial performance and/or condition of our borrowers.
  • Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs.
  • Changes in estimates of future credit loss reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.
  • Changes in our liquidity position.
  • Impairment of our goodwill or other intangible assets.
  • The timely development and acceptance of new products and services and perceived overall value of these products and services by users.
  • Changes in consumer spending, borrowing, and saving habits.
  • Greater than expected costs or difficulties related to the integration of new products and lines of business.
  • Technological changes.
  • The cost and effects of cyber incidents or other failures, interruptions, or security breaches of our systems or those of our customers or third-party providers.
  • Acquisitions and integration of acquired businesses.
  • Changes in the reliability of our vendors, internal control systems or information systems.
  • Our ability to increase market share and control expenses.
  • Our ability to attract and retain qualified employees.
  • Changes in our organization, compensation, and benefit plans.
  • The soundness of other financial institutions.
  • Volatility and disruption in national and international financial and commodity markets.
  • Changes in the competitive environment in our markets and among banking organizations and other financial service providers.
  • Government intervention in the U.S. financial system.
  • Political or economic instability.
  • Acts of God or of war or terrorism.
  • The potential impact of climate change.
  • The impact of pandemics, epidemics, or any other health-related crisis.
  • The costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals.
  • The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) and their application with which we and our subsidiaries must comply.
  • The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.
  • Our success at managing the risks involved in the foregoing items.

In addition, financial markets and global supply chains may continue to be adversely affected by the current or anticipated impact of global wars/military conflicts, terrorism, or other geopolitical events.

Forward-looking statements speak only as of the date on which such statements are made. We do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

(In thousands, except per share amounts)












2024


2023


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


1st Qtr

CONDENSED INCOME STATEMENTS










Net interest income

$ 390,051


$ 388,152


$ 385,426


$ 385,266


$ 399,820

Net interest income (1)

411,367


409,904


407,353


408,594


425,844

Credit loss expense

13,650


15,981


11,185


9,901


9,104

Non-interest income:










Trust and investment management fees

39,085


40,163


37,616


39,392


36,144

Service charges on deposit accounts

24,795


24,535


23,603


23,487


21,879

Insurance commissions and fees

18,296


12,743


13,636


12,940


18,952

Interchange and card transaction fees

4,474


4,608


4,672


5,250


4,889

Other charges, commissions, and fees

12,060


12,104


13,128


12,090


11,704

Net gain (loss) on securities transactions



12


33


21

Other

12,667


19,598


13,331


10,336


11,676

Total non-interest income

111,377


113,751


105,998


103,528


105,265











Non-interest expense:










Salaries and wages

148,000


146,616


137,562


133,195


130,345

Employee benefits

35,970


28,065


26,527


26,792


33,922

Net occupancy

31,778


30,752


31,581


31,714


30,349

Technology, furniture, and equipment

34,995


34,484


35,278


33,043


32,481

Deposit insurance

14,724


58,109


6,033


6,202


6,245

Other

60,750


67,196


56,275


54,096


51,800

Total non-interest expense

326,217


365,222


293,256


285,042


285,142

Income before income taxes

161,561


120,700


186,983


193,851


210,839

Income taxes

25,871


18,149


31,332


31,733


33,186

Net income

135,690


102,551


155,651


162,118


177,653

Preferred stock dividends

1,669


1,669


1,668


1,669


1,669

Net income available to common shareholders

$ 134,021


$ 100,882


$ 153,983


$ 160,449


$ 175,984











PER COMMON SHARE DATA










Earnings per common share - basic

$       2.06


$       1.55


$       2.38


$       2.47


$       2.71

Earnings per common share - diluted

2.06


1.55


2.38


2.47


2.70

Cash dividends per common share

0.92


0.92


0.92


0.87


0.87

Book value per common share at end of quarter

54.36


55.64


44.59


50.55


51.59











OUTSTANDING COMMON SHARES










Period-end common shares

64,251


64,185


64,017


64,120


64,396

Weighted-average common shares - basic

64,216


64,139


64,067


64,241


64,374

Dilutive effect of stock compensation

156


176


172


187


258

Weighted-average common shares - diluted

64,372


64,315


64,239


64,428


64,632











SELECTED ANNUALIZED RATIOS










Return on average assets

1.09 %


0.82 %


1.25 %


1.30 %


1.39 %

Return on average common equity

15.22


13.51


18.93


19.36


22.59

Net interest income to average earning assets

3.48


3.41


3.44


3.45


3.47











(1) Taxable-equivalent basis assuming a 21% tax rate.

 

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)



2024


2023


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


1st Qtr

BALANCE SHEET SUMMARY










($ in millions)










Average Balance:










Loans

$   19,112


$   18,609


$   17,965


$   17,664


$   17,319

Earning assets

45,883


45,579


45,366


45,929


47,904

Total assets

49,324


49,087


48,804


49,317


51,307

Non-interest-bearing demand deposits

13,976


14,697


14,823


15,231


16,636

Interest-bearing deposits

26,748


26,487


26,005


25,776


26,121

Total deposits

40,724


41,184


40,828


41,007


42,757

Shareholders' equity

3,687


3,108


3,372


3,470


3,305











Period-End Balance:










Loans

$   19,388


$   18,824


$   18,399


$   17,746


$   17,486

Earning assets

46,164


47,124


45,218


45,146


47,870

Total assets

49,505


50,845


48,747


48,597


51,246

Total deposits

40,806


41,921


40,992


40,701


42,184

Shareholders' equity

3,638


3,716


3,000


3,387


3,468

Adjusted shareholders' equity (1)

4,914


4,836


4,779


4,692


4,610











ASSET QUALITY










($ in thousands)










Allowance for credit losses on loans:

$ 250,297


$ 245,996


$ 242,235


$ 233,619


$ 231,514

As a percentage of period-end loans

1.29 %


1.31 %


1.32 %


1.32 %


1.32 %











Net charge-offs:

$     7,349


$   10,884


$     4,992


$     9,828


$     8,782

Annualized as a percentage of average loans

0.15 %


0.23 %


0.11 %


0.22 %


0.21 %











Non-accrual loans:

$   71,515


$   60,907


$   67,175


$   67,781


$   38,410

As a percentage of total loans

0.37 %


0.32 %


0.37 %


0.38 %


0.22 %

As a percentage of total assets

0.14


0.12


0.14


0.14


0.07











CONSOLIDATED CAPITAL RATIOS










Common Equity Tier 1 Risk-Based Capital Ratio

13.41 %


13.25 %


13.32 %


13.42 %


13.24 %

Tier 1 Risk-Based Capital Ratio

13.89


13.73


13.81


13.92


13.74

Total Risk-Based Capital Ratio

15.35


15.18


15.28


15.39


15.22

Leverage Ratio

8.44


8.35


8.17


8.11


7.69

Equity to Assets Ratio (period-end)

7.35


7.31


6.15


6.97


6.77

Equity to Assets Ratio (average)

7.47


6.33


6.91


7.04


6.44











(1) Shareholders' equity excluding accumulated other comprehensive income (loss).



 

Cullen/Frost Bankers, Inc.

TAXABLE-EQUIVALENT YIELD/COST AND AVERAGE BALANCES (UNAUDITED)



2024


2023


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


1st Qtr

TAXABLE-EQUIVALENT YIELD/COST(1)










Earning Assets:










Interest-bearing deposits

5.40 %


5.39 %


5.33 %


5.05 %


4.57 %

Federal funds sold

5.76


5.73


5.65


5.35


4.72

Resell agreements

5.60


5.60


5.53


5.26


4.77

Securities(2)

3.32


3.24


3.24


3.24


3.24

Loans, net of unearned discounts

7.00


6.92


6.83


6.64


6.36

Total earning assets

5.13


5.00


4.92


4.77


4.57











Interest-Bearing Liabilities:










Interest-bearing deposits:










Savings and interest checking

0.42 %


0.40 %


0.38 %


0.41 %


0.36 %

Money market deposit accounts

2.82


2.83


2.78


2.68


2.47

Time accounts

4.73


4.59


4.34


3.77


2.40

Total interest-bearing deposits

2.34


2.27


2.12


1.87


1.52

Total deposits

1.54


1.46


1.35


1.18


0.93

Federal funds purchased

5.38


5.40


5.32


4.97


4.55

Repurchase agreements

3.76


3.75


3.67


3.52


3.20

Junior subordinated deferrable interest debentures

7.34


7.45


7.34


6.84


6.46

Subordinated notes payable and other notes

4.69


4.69


4.69


4.69


4.69

Total interest-bearing liabilities

2.54


2.48


2.33


2.11


1.79











Net interest spread

2.59


2.52


2.59


2.66


2.78

Net interest income to total average earning assets

3.48


3.41


3.44


3.45


3.47











AVERAGE BALANCES










($ in millions)










Earning Assets:










Interest-bearing deposits

$   7,356


$   7,047


$   6,747


$   6,880


$   8,687

Federal funds sold

5


3


13


22


64

Resell agreements

85


86


85


85


90

Securities - carrying value(2)

19,324


19,834


20,557


21,278


21,744

Securities - amortized cost(2)

20,813


21,969


22,250


22,737


23,287

Loans, net of unearned discount

19,112


18,609


17,965


17,664


17,319

Total earning assets

45,883


45,579


45,366


45,929


47,904











Interest-Bearing Liabilities:










Interest-bearing deposits:










Savings and interest checking

$   9,918


$   9,986


$ 10,202


$ 10,862


$ 11,662

Money market deposit accounts

11,058


11,219


11,144


11,431


12,404

Time accounts

5,773


5,282


4,659


3,483


2,055

Total interest-bearing deposits

26,748


26,487


26,005


25,776


26,121

Total deposits

40,724


41,184


40,828


41,007


42,757

Federal funds purchased

33


18


21


33


51

Repurchase agreements

3,787


3,761


3,536


3,719


4,211

Junior subordinated deferrable interest debentures

123


123


123


123


123

Subordinated notes payable and other notes

100


99


99


99


99

Total interest-bearing liabilities

30,791


30,488


29,785


29,750


30,606











(1) Taxable-equivalent basis assuming a 21% tax rate.

(2) Average securities include unrealized gains and losses on securities available for sale while yields are based on average amortized cost.

 

A.B. Mendez
Investor Relations
210.220.5234

or

Bill Day
Media Relations
210.220.5427

Cullen/Frost Bankers logo. (PRNewsFoto/Cullen/Frost Bankers)

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/cullenfrost-reports-first-quarter-results-302126701.html

SOURCE Cullen/Frost Bankers, Inc.

Copyright 2024 PR Newswire

Cullen Frost Bankers (NYSE:CFR)
Historical Stock Chart
From May 2024 to Jun 2024 Click Here for more Cullen Frost Bankers Charts.
Cullen Frost Bankers (NYSE:CFR)
Historical Stock Chart
From Jun 2023 to Jun 2024 Click Here for more Cullen Frost Bankers Charts.