Education
About Us
Working with TipRanks
Follow Us
Cullen/Frost Bankers (CFR)
NYSE:CFR
Top Page
Cullen/Frost Bankers
(NYSE:CFR)
Select Model
Select Model
Rating:73Outperform
Price Target:
$151.00
â–²(8.59% Upside)
The score is driven primarily by solid underlying financial performance and constructive earnings-call guidance (improving NIM and raised income outlook). Offsetting factors include asset-quality migration (problem loans and charge-offs) and expense growth pressure, while technical signals are neutral and valuation is moderately supportive.
Positive Factors
Strong margins and revenue growth
Sustained revenue expansion and a 23%+ net margin point to durable operating leverage and disciplined pricing. Over the medium term this supports internal funding for loans and investment in services, making earnings less reliant on short-term rate swings.
Improving cash generation
Significant FCF growth and high FCF-to-net-income conversion enhance financial flexibility to fund branch expansion, loan originations, dividends, and capital cushions. Strong cash conversion reduces reliance on external financing over the medium term.
Organic expansion accelerating deposit and loan growth
A scalable branch expansion program that has driven meaningful incremental loans and deposits diversifies funding mix and grows customer relationships at relatively predictable unit economics, supporting durable franchise growth and market share gains in Texas.
Negative Factors
Rising problem loans (multifamily exposure)
Increasing criticized multifamily loans signal localized asset-quality migration that can pressure credit costs and provisioning over multiple quarters. Resolution timing is uncertain, which could weigh on loan-loss reserves and return metrics through the medium term.
Large unrealized AFS investment losses
Sizeable mark-to-market losses on the securities portfolio reflect interest-rate exposure that can compress capital or limit balance-sheet flexibility if rates remain elevated or sell-downs are needed, posing a multi-quarter risk to capital planning.
Expense growth and competitive structuring losses
Persistent expense growth above revenue and rising structuring-related losses from aggressive competition can erode operating leverage and margins. If ongoing, this will pressure long-term profitability and limit the payoff from growth investments such as new branches.
Cullen/Frost Bankers (CFR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.81B
Dividend Yield3.05%
Average Volume (3M)430.43K
Price to Earnings (P/E)13.9
Beta (1Y)0.87
Revenue Growth2.85%
EPS Growth20.57%
CountryUS
Employees5,854
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)2.56
Shares Outstanding63,941,100
10 Day Avg. Volume505,836
30 Day Avg. Volume430,429
Financial Highlights & Ratios
PEG Ratio-5.86
Price to Book (P/B)2.21
Price to Sales (P/S)3.02
P/FCF Ratio10.00
Enterprise Value/Market Cap0.65
Enterprise Value/Revenue1.97
Enterprise Value/Gross Profit2.66
Enterprise Value/Ebitda6.75
Forecast
1Y Price Target
$148.60Price Target Upside6.86% Upside
Rating ConsensusHold
Number of Analyst Covering10
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Cullen/Frost Bankers Business Overview & Revenue Model
Company DescriptionCullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that offers commercial and consumer banking services in Texas. It operates in two segments, Banking and Frost Wealth Advisors. The company offers commercial banking services to corporations and other business clients, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; commercial leasing; and treasury management services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds, and foreign exchange services. Further, it acts as a correspondent for approximately 171 financial institutions; offers trust, investment, agency, and custodial services for individual and corporate clients; provides capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and supports international business activities. Additionally, the company offers insurance and securities brokerage services; and holds securities for investment purposes, as well as investment management services to Frost-managed mutual funds, institutions, and individuals. It operates approximately 157 financial centers and 1,650 ATMs. The company serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. Cullen/Frost Bankers, Inc. was founded in 1868 and is headquartered in San Antonio, Texas.
How the Company Makes MoneyCullen/Frost Bankers generates revenue through various streams primarily focused on interest income and non-interest income. The bulk of its revenue comes from net interest income, which is derived from the interest earned on loans and securities, minus the interest paid on deposits and borrowings. Key revenue streams include commercial loans, residential mortgages, and consumer loans, which contribute significantly to interest income. Additionally, the company earns non-interest income from service fees, investment advisory services, and wealth management solutions. Strategic partnerships with local businesses and community organizations enhance its customer base and drive growth. The company's strong focus on the Texas economy, combined with its diversified product offerings, supports its financial performance and overall profitability.
Cullen/Frost Bankers Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call presented multiple clear positives: solid loan and deposit growth, meaningful traction from the organic expansion program (200 locations, $2.0B loans and $2.76B deposits generated), stronger booked commitments and new commercial relationships, improved NIM and upgraded net interest income and noninterest income guidance. Offsetting items include rising problem loans (primarily multifamily criticized), higher quarterly net charge-offs, a large unrealized AFS loss, elevated structuring-related losses due to heightened competition, and continued expense growth that has historically outpaced revenue. Management expects expansion accretion in 2026 and provided constructive guidance, but near-term risks (asset quality migration in specific pockets and investment mark-to-market losses) temper the outlook.Q4-2025 Updates
Positive Updates
Earnings and EPS Growth
Net income of $155.3 million in Q2 2025, or $2.39 per share, up from $143.8 million or $2.21 per share in Q2 2024 (EPS +8.1%).
Loan and Deposit Growth
Average loans rose to $21.1 billion, up 7.2% year-over-year from $19.7 billion; average deposits increased to $41.8 billion, up 3.1% year-over-year from $40.5 billion.
Organic Expansion Traction
Opened 200th financial center (up from ~130 in late 2018, >50% growth); expansion generated $2.76 billion in deposits, $2.003 billion in loans and ~69,000 new households; expansion avg loans and deposits grew $521 million and $544 million YoY (35.25% growth). Expansion represents ~9.6% of company loans and 6.6% of company deposits (June MTD averages) and is expected to be accretive in 2026.
Commercial Pipeline and New Relationships
Added just under $2.0 billion in new loan commitments in Q2 (56% above Q1); booked opportunities increased 36%; recorded 1,060 new commercial relationships in Q2 (second-highest quarterly total), a 9% increase over Q1.
Segment Performance Highlights
Commercial loan balances up $817 million (4.9% YoY); CRE +6.8% YoY; energy loans up 22% YoY; consumer real estate outstandings $3.3 billion, up $600 million YoY (+22%).
Net Interest Margin and Investment Yields
Net interest margin improved 7 basis points sequentially to 3.67%; investment portfolio averaged $20.4 billion (up $1.0 billion QoQ) with a taxable-equivalent yield of 3.79% (up 16 bps QoQ).
Improved Full-Year NII and Noninterest Income Guidance
Updated guidance assumes two 25-bp Fed cuts and projects full-year net interest income growth of 6%–7% (up from prior 5%–7%); noninterest income guidance raised to +3.5%–4.5% (from +2%–3%).
Deposit Cost and Liquidity Trends
Average total deposits $41.76 billion (up $102 million QoQ); cost of interest-bearing deposits modest at 1.93% (down 1 bp QoQ); customer repos averaged $4.25 billion (up $103 million QoQ).
Negative Updates
ROE Decline
Return on average common equity declined to 15.64% in Q2 2025 from 17.08% in Q2 2024, indicating pressure on profitability despite higher net income.
Higher Net Charge-Offs
Net charge-offs were $11.2 million in Q2 (annualized ~21 bps of average loans), up from $9.7 million in both the prior quarter and year-ago quarter.
Increase in Problem Loans (Risk Grade 10+)
Total problem loans rose to $989 million at quarter-end from $889 million at year-end; increase attributed largely to multifamily criticized loans (management expects resolutions in 2025).
Rising Structuring Losses / Competitive Pressure
Losses to pricing decreased 28%, but losses to structure increased to the second-highest quarter on record, signaling more aggressive competitor structuring (guarantees, equity cushions, etc.).
Large Unrealized AFS Loss
Net unrealized loss on the available-for-sale investment portfolio was $1.42 billion at quarter-end (essentially flat vs. $1.4 billion in Q1), reflecting mark-to-market interest rate exposure.
Expense Growth and Investor Concerns
Investors flagged that expense growth has outpaced revenue since 2022; company expects noninterest expense growth in the high single digits for full-year 2025, indicating continued near-term expense pressure.
Modest Deposit Growth and Mix Risk
Year-over-year deposit growth is moderate at +3.1%; management noted potential for deposit costs to rise if mix shifts further to CDs or higher-cost funding and if competition intensifies.
C&I Outstanding Utilization Weakness
C&I balances decreased ~1% YoY and loan outstanding line utilization showed some weakness (draws under commitments lower), suggesting customer hesitancy and slower draw activity.
Company Guidance
Management's 2025 guidance assumes two 25‑bp Fed cuts (September and October) and calls for full‑year net interest income growth of 6%–7% (up from prior 5%–7%) with net interest margin improving ~12–15 bps versus 2024's 3.53% (Q2 NIM was 3.67%, +7 bps QoQ); full‑year average loan growth is expected in the mid‑ to high‑single digits and average deposits to rise 2%–3%; noninterest income is now guided to grow 3.5%–4.5% (vs. prior 2%–3%), noninterest expense to increase in the high single digits, net charge‑offs to be similar to 2024 at ~20–25 bps of average loans, and the effective tax rate to be 16%–17%; management also provided balance‑sheet context including Q2 average deposits of $41.76B, an investment portfolio averaging $20.4B (duration 5.5 years, taxable‑equivalent yield 3.79%), taxable portfolio $13.8B (yield 3.48%), municipal portfolio $6.6B (TEY 4.48%, ~69% pre‑refunded/PSF), and customer repos averaging $4.25B (cost 3.23%).Cullen/Frost Bankers Financial Statement Overview
Summary
Strong income statement (revenue up 8.25% TTM, net margin improved to 23.43%) and solid ROE (15.29%), supported by improving free cash flow growth (+39.44% TTM). Offsetting factors include a lower equity ratio/higher reliance on debt and weaker cash conversion (low operating cash flow to net income).Income Statement
Cullen/Frost Bankers has demonstrated strong revenue growth with a TTM increase of 8.25% and consistent profitability. The gross profit margin is robust at 58.15%, and the net profit margin has improved to 23.43% in the TTM, indicating efficient cost management. EBIT and EBITDA margins are healthy, reflecting solid operational performance. However, the gross profit margin has decreased compared to previous years, suggesting potential cost pressures.85
Very Positive
Balance Sheet
The company's balance sheet shows a moderate debt-to-equity ratio of 1.15, indicating a balanced approach to leveraging. Return on equity is strong at 15.29%, showcasing effective use of shareholder funds. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing, which could pose risks if interest rates rise.75
Positive
Cash Flow
Cullen/Frost Bankers has shown a significant improvement in free cash flow growth at 39.44% in the TTM, indicating enhanced cash generation capabilities. The free cash flow to net income ratio is solid at 76.10%, reflecting good cash conversion. However, the operating cash flow to net income ratio is low, suggesting potential challenges in converting earnings into cash.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.90B | 2.85B | 2.65B | 1.88B | 1.40B | 1.49B |
| Gross Profit | 2.14B | 2.00B | 1.94B | 1.69B | 1.37B | 1.20B |
| EBITDA | 845.11M | 778.78M | 788.82M | 740.17M | 558.83M | 415.69M |
| Net Income | 637.16M | 582.54M | 597.97M | 579.15M | 443.08M | 331.15M |
Balance Sheet | ||||||
| Total Assets | 52.53B | 52.52B | 50.85B | 52.89B | 50.88B | 42.39B |
| Cash, Cash Equivalents and Short-Term Investments | 18.62B | 25.26B | 25.18B | 30.06B | 30.47B | 20.73B |
| Total Debt | 4.82B | 4.59B | 4.36B | 4.93B | 2.99B | 2.35B |
| Total Liabilities | 48.07B | 48.62B | 47.13B | 49.76B | 46.44B | 38.10B |
| Stockholders Equity | 4.46B | 3.90B | 3.72B | 3.14B | 4.44B | 4.29B |
Cash Flow | ||||||
| Free Cash Flow | 119.90M | 861.76M | 320.21M | 620.08M | 582.44M | 428.82M |
| Operating Cash Flow | 157.55M | 989.53M | 478.85M | 722.58M | 648.29M | 524.24M |
| Investing Cash Flow | -2.45B | -180.88M | -942.75M | -8.28B | -2.53B | -1.63B |
| Financing Cash Flow | 1.03B | 738.33M | -2.88B | 3.00B | 8.17B | 7.61B |
Cullen/Frost Bankers Technical Analysis
Positive
139.06
Price Trends
130.84
Positive
127.48
Positive
126.46
Positive
Market Momentum
2.10
Positive
59.13
Neutral
38.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CFR, the sentiment is Positive. The current price of 139.06 is above the 20-day moving average (MA) of 137.20, above the 50-day MA of 130.84, and above the 200-day MA of 126.46, indicating a bullish trend. The MACD of 2.10 indicates Positive momentum. The RSI at 59.13 is Neutral, neither overbought nor oversold. The STOCH value of 38.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CFR.
Cullen/Frost Bankers Risk Analysis
Cullen/Frost Bankers disclosed 39 risk factors in its most recent earnings report. Cullen/Frost Bankers reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cullen/Frost Bankers Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $9.55B | 13.65 | 22.83% | 2.43% | 20.72% | 3.63% | |
75 Outperform | $8.90B | 10.86 | 14.05% | 2.31% | 5.87% | 53.36% | |
73 Outperform | $8.81B | 13.89 | 14.68% | 3.05% | 2.85% | 20.57% | |
73 Outperform | $7.84B | 13.03 | 15.83% | 1.97% | 12.63% | 14.25% | |
72 Outperform | $8.85B | 9.97 | 13.39% | 2.97% | 0.12% | 27.30% | |
70 Outperform | $11.33B | 16.79 | 10.09% | 3.21% | -7.07% | 31.09% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
CFR
Cullen/Frost Bankers
139.06
7.27
5.52%
CMA
Comerica
88.67
25.50
40.37%
CBSH
Commerce Bancshares
53.23
-8.36
-13.57%
ONB
Old National Bancorp Capital
24.91
1.96
8.54%
BPOP
Popular
136.69
39.45
40.56%
ZION
Zions Bancorporation National Association
60.99
6.59
12.12%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.