8-K
CULLEN/FROST BANKERS, INC. (CFR)
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 27, 2022
Cullen/Frost Bankers, Inc.
(Exact name of registrant as specified in its charter)
| Texas | 001-13221 | 74-1751768 | |||||
|---|---|---|---|---|---|---|---|
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | 111 W. Houston Street, | San Antonio, | Texas | 78205 | |
| --- | --- | --- | --- | ||||
| (Address of principal executive offices) | (Zip code) | (210) | 220-4011 | ||||
| --- | --- | --- | |||||
| (Registrant's telephone number, including area code) | N/A | ||||||
| --- | |||||||
| (Former name, former address and former fiscal year, if changed since last report |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on <br>which registered |
|---|---|---|
| Common Stock, $.01 Par Value | CFR | New York Stock Exchange |
| Depositary Shares, each representing a 1/40th interest in a share of 4.450% Non-Cumulative Perpetual Preferred Stock, Series B | CFR.PrB | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
Attached as Exhibit 99.1 and incorporated into this item by reference is a press release issued by the Registrant on October 27, 2022 regarding its financial results for the quarter ended September 30, 2022. The information furnished by the Registrant pursuant to this item shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
99.1 Press Release.
104 Cover Page Interactive Data File - The cover page XBRL tags are embedded within the inline XBRL document.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CULLEN/FROST BANKERS, INC.
By: /s/ Jerry Salinas
Jerry Salinas
Group Executive Vice President
and Chief Financial Officer
Dated: October 27, 2022
EXHIBIT INDEX
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release. |
| 104 | Cover Page Interactive Data File - The cover page XBRL tags are embedded within the inline XBRL document. |
Document
Exhibit 99.1
A.B. Mendez
Investor Relations
210.220.5234
or
Bill Day
Media Relations
210.220.5427
FOR IMMEDIATE RELEASE
October 27, 2022
CULLEN/FROST REPORTS THIRD QUARTER RESULTS
Board declares fourth quarter dividend on common and preferred stock
SAN ANTONIO -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported third quarter 2022 results.
Net income available to common shareholders for the third quarter of 2022 was $168.1 million compared to $106.3 million in the third quarter of 2021. On a per-share basis, net income available to common shareholders for the third quarter of 2022 was $2.59 per diluted common share, compared to $1.65 per diluted common share reported a year earlier, representing a 57.0 percent increase. Returns on average assets and average common equity were 1.27 percent and 20.13 percent, respectively, for the third quarter of 2022 compared to 0.90 percent and 9.87 percent, respectively, for the same period a year earlier.
For the third quarter of 2022, net interest income on a taxable-equivalent basis was $379.5 million, up 40.9 percent, compared to the same quarter in 2021. Average loans for the third quarter of 2022 increased $633.6 million, or 3.9 percent, to $16.8 billion, from the $16.2 billion reported for the third quarter a year earlier. Excluding PPP loans, third quarter average loans of $16.8 billion represented a 13.0 percent increase compared to the third quarter of 2021 and a 1.3 percent increase compared to the second quarter of 2022. Average deposits for the third quarter were $45.8 billion, up $6.7 billion, or 17.1 percent, compared to the $39.1 billion reported for last year's third quarter, and up $1.1 billion, or 2.4 percent, compared to the second quarter of 2022.
“Our third quarter results demonstrate how well-positioned we are for a rising interest rate environment, and they highlight our employees' success in executing our organic growth strategy,” said Phil Green, Cullen/Frost Chairman and CEO. “The performance resulted in part from higher interest rates, but we also have shared those increases with our customers in the form of higher rates on deposit accounts. That, in turn, has led to increased deposit growth and bolstered our relationships with customers.
“That investment, along with our investments in regional expansion projects, our new residential mortgage product, and enhancements in customer experiences, will lead to further benefits in the long term.”
For the first nine months of 2022, net income available to common shareholders was $383.0 million, up 13.8 percent compared to $336.6 million for the first nine months of 2021. Diluted EPS available to common shareholders for the first nine months of 2021 was $5.90 compared to $5.22 in the year-earlier period, representing an increase of 13.0 percent. Returns on average assets and average common equity for the first nine months of 2022 were 1.00 percent and 14.19 percent, respectively, compared to 1.00 percent and 10.72 percent, respectively, for the same period in 2021.
Noted financial data for the third quarter of 2022 follows:
•The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios at the end of the third quarter of 2022 were 12.74 percent, 13.26 percent and 14.80 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 $379.5 million, an increase of 40.9 percent, compared to the prior year period. Net interest margin was 3.01 percent for the third quarter of 2022, a 45 basis point increase from 2.56 percent for the second quarter of 2022 and compared to 2.47 percent for the third quarter of 2021.
•Non-interest income for the third quarter of 2022 totaled $99.8 million, an increase of $6.6 million, or 7.1 percent, from the $93.2 million reported for the third quarter of 2021. Service charges on deposit accounts increased $1.7 million, or 8.2 percent, compared to the third quarter of 2021. The increase during the third
quarter of 2022 was primarily related to increases in overdraft charges (up $1.9 million). Insurance commissions and fees increased $1.4 million, or 12.0 percent, compared to the third quarter of 2021. The increase during the third quarter of 2022 was primarily the result of an increase in commission income (up $1.4 million). Other charges, commissions and fees increased $1.3 million, or 13.4 percent, compared to the third quarter of 2021. The increase was primarily related to increases in income from the placement of money market accounts (up $1.6 million) and merchant services rebates/bonuses (up $417,000), among other things, partly offset by a decrease in income from the sale of mutual funds (down $983,000).
•Non-interest expense was $257.9 million for the quarter, up $39.9 million, or 18.3 percent, compared to the $218.0 million reported for the third quarter a year earlier. Salaries and wages expense increased $27.7 million, or 27.9 percent, compared to the third quarter of 2021. The increase in salaries and wages was primarily related to increases in salaries due to annual merit and market increases as well as the implementation of a $20 per hour minimum wage in December, 2021. Salaries and wages were also impacted by our investments in organic expansion in the Houston and Dallas markets, as well as preparations for our mortgage loan product offering, and increases in incentive compensation. Other non-interest expense increased $7.7 million, or 20.3 percent, compared to the third quarter of 2021. The increase during the third quarter of 2022 included increases in advertising/promotions expense (up $2.0 million); professional services expense (up $1.3 million); travel, meals and entertainment (up $1.2 million); and sundry and other miscellaneous expenses (up $1.2 million), among other things. Technology, furniture and equipment expense increased $2.3 million, or 8.0 percent, compared to the third quarter of 2021. The increase during the three months ended September 30, 2022 was primarily related to increases in cloud services expense (up $999,000), and software maintenance (up $846,000).
•For the third quarter of 2022, the company did not report a credit loss expense, and reported net charge-offs of $2.9 million. This compares to no credit loss expense and net loan charge-offs of $2.8 million for the second quarter of 2022 and no credit loss expense and net loan charge-offs of $2.1 million for the third quarter of 2021. The allowance for credit losses on loans as a percentage of total loans was 1.38 percent at September 30, 2022, compared to 1.43 percent at the end of the second quarter of 2022 and 1.58 percent at the end of the third quarter of 2021. Non-accrual loans were $29.9 million at the end of the
third quarter of 2022, compared to $35.1 million at the end of the second quarter of 2022 and $57.1 million at the end of the third quarter of 2021.
The Cullen/Frost board declared a fourth-quarter cash dividend of $0.87 per common share. The dividend on common stock is payable December 15, 2022 to shareholders of record on November 30 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 on December 15, 2022, to shareholders of record on November 30 of this year.
Cullen/Frost Bankers, Inc. will host a conference call on Thursday, October 27, 2022, 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, October 30, 2022 at 1-877-660-6853 with Conference ID # of 13733614. 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 $52.9 billion in assets at September 30, 2022. 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”). These may include statements regarding the potential effects of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations, 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 instability.
•Acts of God or of war or terrorism.
•The potential impact of climate change.
•The impact of the COVID-19 pandemic and any other pandemic, epidemic or 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 military conflict, including the current Russian invasion of Ukraine, terrorism or other geopolitical events.
Further, statements about the potential effects of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, clients, third parties and us.
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) | |||||||||||||||
| 2022 | 2021 | ||||||||||||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |||||||||||
| CONDENSED INCOME STATEMENTS | |||||||||||||||
| Net interest income | $ | 355,547 | $ | 288,208 | $ | 249,071 | $ | 240,708 | $ | 246,122 | |||||
| Net interest income (1) | 379,518 | 311,377 | 272,194 | 264,049 | 269,321 | ||||||||||
| Credit loss expense | — | — | — | — | — | ||||||||||
| Non-interest income: | |||||||||||||||
| Trust and investment management fees | 38,552 | 37,776 | 38,656 | 38,425 | 37,381 | ||||||||||
| Service charges on deposit accounts | 22,960 | 23,870 | 22,740 | 22,234 | 21,216 | ||||||||||
| Insurance commissions and fees | 13,152 | 11,776 | 16,608 | 11,714 | 11,748 | ||||||||||
| Interchange and card transaction fees | 4,614 | 4,911 | 4,226 | 4,237 | 4,490 | ||||||||||
| Other charges, commissions and fees | 11,095 | 9,887 | 9,627 | 10,107 | 9,785 | ||||||||||
| Net gain (loss) on securities transactions | — | — | — | 69 | — | ||||||||||
| Other | 9,448 | 9,707 | 9,533 | 22,270 | 8,569 | ||||||||||
| Total non-interest income | 99,821 | 97,927 | 101,390 | 109,056 | 93,189 | ||||||||||
| Non-interest expense: | |||||||||||||||
| Salaries and wages | 127,189 | 116,881 | 111,329 | 105,541 | 99,463 | ||||||||||
| Employee benefits | 21,680 | 20,733 | 24,220 | 19,189 | 21,576 | ||||||||||
| Net occupancy | 28,133 | 28,379 | 27,411 | 27,435 | 27,208 | ||||||||||
| Technology, furniture and equipment | 30,781 | 29,921 | 29,157 | 28,230 | 28,494 | ||||||||||
| Deposit insurance | 4,279 | 3,724 | 3,633 | 3,339 | 3,088 | ||||||||||
| Intangible amortization | 103 | 131 | 146 | 153 | 157 | ||||||||||
| Other | 45,733 | 46,578 | 42,836 | 54,708 | 38,017 | ||||||||||
| Total non-interest expense | 257,898 | 246,347 | 238,732 | 238,595 | 218,003 | ||||||||||
| Income before income taxes | 197,470 | 139,788 | 111,729 | 111,169 | 121,308 | ||||||||||
| Income taxes | 27,710 | 20,674 | 12,627 | 10,148 | 13,333 | ||||||||||
| Net income | 169,760 | 119,114 | 99,102 | 101,021 | 107,975 | ||||||||||
| Preferred stock dividends | 1,668 | 1,669 | 1,669 | 1,669 | 1,668 | ||||||||||
| Net income available to common shareholders | $ | 168,092 | $ | 117,445 | $ | 97,433 | $ | 99,352 | $ | 106,307 | |||||
| PER COMMON SHARE DATA | |||||||||||||||
| Earnings per common share - basic | $ | 2.60 | $ | 1.82 | $ | 1.51 | $ | 1.54 | $ | 1.66 | |||||
| Earnings per common share - diluted | 2.59 | 1.81 | 1.50 | 1.54 | 1.65 | ||||||||||
| Cash dividends per common share | 0.87 | 0.75 | 0.75 | 0.75 | 0.75 | ||||||||||
| Book value per common share at end of quarter | 41.53 | 49.93 | 56.65 | 67.11 | 66.39 | ||||||||||
| OUTSTANDING COMMON SHARES | |||||||||||||||
| Period-end common shares | 64,211 | 64,123 | 64,094 | 63,986 | 63,668 | ||||||||||
| Weighted-average common shares - basic | 64,158 | 64,113 | 64,051 | 63,879 | 63,652 | ||||||||||
| Dilutive effect of stock compensation | 343 | 354 | 410 | 462 | 445 | ||||||||||
| Weighted-average common shares - diluted | 64,501 | 64,467 | 64,461 | 64,341 | 64,097 | ||||||||||
| SELECTED ANNUALIZED RATIOS | |||||||||||||||
| Return on average assets | 1.27 | % | 0.92 | % | 0.79 | % | 0.81 | % | 0.90 | % | |||||
| Return on average common equity | 20.13 | 13.88 | 9.58 | 9.26 | 9.87 | ||||||||||
| Net interest income to average earning assets | 3.01 | 2.56 | 2.33 | 2.31 | 2.47 | ||||||||||
| (1) Taxable-equivalent basis assuming a 21% tax rate. | |||||||||||||||
| Cullen/Frost Bankers, Inc. | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||||
| 2021 | |||||||||||||||
| 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | ||||||||||||
| BALANCE SHEET SUMMARY | |||||||||||||||
| ( in millions) | |||||||||||||||
| Average Balance: | |||||||||||||||
| Loans | 16,823 | $ | 16,674 | $ | 16,386 | $ | 15,984 | $ | 16,189 | ||||||
| Loans excluding Paycheck Protection Program | 16,531 | 16,084 | 15,391 | 14,824 | |||||||||||
| Earning assets | 47,880 | 47,339 | 46,008 | 43,980 | |||||||||||
| Total assets | 51,088 | 50,323 | 48,897 | 46,774 | |||||||||||
| Non-interest-bearing demand deposits | 18,355 | 17,961 | 17,885 | 16,999 | |||||||||||
| Interest-bearing deposits | 26,371 | 25,001 | 23,142 | 22,117 | |||||||||||
| Total deposits | 44,726 | 42,962 | 41,027 | 39,116 | |||||||||||
| Shareholders' equity | 3,540 | 4,270 | 4,400 | 4,417 | |||||||||||
| Period-End Balance: | |||||||||||||||
| Loans | 16,951 | $ | 16,736 | $ | 16,543 | $ | 16,336 | $ | 15,833 | ||||||
| Loans excluding Paycheck Protection Program | 16,644 | 16,335 | 15,908 | 15,005 | |||||||||||
| Earning assets | 48,404 | 48,107 | 48,063 | 44,964 | |||||||||||
| Goodwill and intangible assets | 656 | 656 | 656 | 656 | |||||||||||
| Total assets | 51,785 | 51,296 | 50,878 | 47,860 | |||||||||||
| Total deposits | 45,602 | 44,431 | 42,696 | 39,613 | |||||||||||
| Shareholders' equity | 3,347 | 3,776 | 4,440 | 4,372 | |||||||||||
| Adjusted shareholders' equity (1) | 4,221 | 4,148 | 4,092 | 4,022 | |||||||||||
| ASSET QUALITY | |||||||||||||||
| ( in thousands) | |||||||||||||||
| Allowance for credit losses on loans: | 234,315 | $ | 239,632 | $ | 246,835 | $ | 248,666 | $ | 250,150 | ||||||
| As a percentage of period-end loans | % | 1.43 | % | 1.49 | % | 1.52 | % | 1.58 | % | ||||||
| Net charge-offs: | 2,854 | $ | 2,807 | $ | 6,295 | $ | 2,789 | $ | 2,115 | ||||||
| Annualized as a percentage of average loans | % | 0.07 | % | 0.16 | % | 0.07 | % | 0.05 | % | ||||||
| Non-accrual loans: | 29,904 | $ | 35,125 | $ | 48,966 | $ | 53,713 | $ | 57,055 | ||||||
| As a percentage of total loans | % | 0.21 | % | 0.30 | % | 0.33 | % | 0.36 | % | ||||||
| As a percentage of total assets | 0.07 | 0.10 | 0.11 | 0.12 | |||||||||||
| CONSOLIDATED CAPITAL RATIOS | |||||||||||||||
| Common Equity Tier 1 Risk-Based Capital Ratio | % | 12.64 | % | 12.78 | % | 13.13 | % | 13.42 | % | ||||||
| Tier 1 Risk-Based Capital Ratio | 13.17 | 13.32 | 13.70 | 14.01 | |||||||||||
| Total Risk-Based Capital Ratio | 14.75 | 14.97 | 15.45 | 15.90 | |||||||||||
| Leverage Ratio | 7.03 | 7.08 | 7.34 | 7.52 | |||||||||||
| Equity to Assets Ratio (period-end) | 6.46 | 7.36 | 8.73 | 9.14 | |||||||||||
| Equity to Assets Ratio (average) | 6.93 | 8.48 | 9.00 | 9.44 | |||||||||||
| (1) Shareholders' equity excluding accumulated other comprehensive income (loss). |
All values are in US Dollars.
| Cullen/Frost Bankers, Inc. | ||||||
|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | ||||||
| (In thousands, except per share amounts) | ||||||
| Nine Months Ended | ||||||
| September 30, | ||||||
| 2022 | 2021 | |||||
| CONDENSED INCOME STATEMENTS | ||||||
| Net interest income | $ | 892,826 | $ | 744,159 | ||
| Net interest income (1) | 963,089 | 813,266 | ||||
| Credit loss expense | — | 63 | ||||
| Non-interest income: | ||||||
| Trust and investment management fees | 114,984 | 110,569 | ||||
| Service charges on deposit accounts | 69,570 | 61,058 | ||||
| Insurance commissions and fees | 41,536 | 39,834 | ||||
| Interchange and card transaction fees | 13,751 | 13,224 | ||||
| Other charges, commissions and fees | 30,609 | 26,729 | ||||
| Net gain (loss) on securities transactions | — | — | ||||
| Other | 28,688 | 26,258 | ||||
| Total non-interest income | 299,138 | 277,672 | ||||
| Non-interest expense: | ||||||
| Salaries and wages | 355,399 | 289,956 | ||||
| Employee benefits | 66,633 | 62,840 | ||||
| Net occupancy | 83,923 | 79,909 | ||||
| Technology, furniture and equipment | 89,859 | 84,508 | ||||
| Deposit insurance | 11,636 | 8,893 | ||||
| Intangible amortization | 380 | 544 | ||||
| Other | 135,147 | 116,749 | ||||
| Total non-interest expense | 742,977 | 643,399 | ||||
| Income before income taxes | 448,987 | 378,369 | ||||
| Income taxes | 61,011 | 36,311 | ||||
| Net income | 387,976 | 342,058 | ||||
| Preferred stock dividends | 5,006 | 5,488 | ||||
| Net income available to common shareholders | $ | 382,970 | $ | 336,570 | ||
| PER COMMON SHARE DATA | ||||||
| Earnings per common share - basic | $ | 5.92 | $ | 5.25 | ||
| Earnings per common share - diluted | 5.90 | 5.22 | ||||
| Cash dividends per common share | 2.37 | 2.19 | ||||
| Book value per common share at end of quarter | 41.53 | 66.39 | ||||
| OUTSTANDING COMMON SHARES | ||||||
| Period-end common shares | 64,211 | 63,668 | ||||
| Weighted-average common shares - basic | 64,108 | 63,523 | ||||
| Dilutive effect of stock compensation | 369 | 489 | ||||
| Weighted-average common shares - diluted | 64,477 | 64,012 | ||||
| SELECTED ANNUALIZED RATIOS | ||||||
| Return on average assets | 1.00 | % | 1.00 | % | ||
| Return on average common equity | 14.19 | 10.72 | ||||
| Net interest income to average earning assets | 2.64 | 2.61 | ||||
| (1) Taxable-equivalent basis assuming a 21% tax rate. | ||||||
| Cullen/Frost Bankers, Inc. | ||||||
| --- | --- | --- | --- | --- | --- | |
| CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | ||||||
| 2021 | ||||||
| BALANCE SHEET SUMMARY | ||||||
| ( in millions) | ||||||
| Average Balance: | ||||||
| Loans | 16,630 | $ | 17,034 | |||
| Loans excluding Paycheck Protection Program | 14,758 | |||||
| Earning assets | 42,249 | |||||
| Total assets | 45,004 | |||||
| Non-interest-bearing demand deposits | 16,262 | |||||
| Interest-bearing deposits | 21,350 | |||||
| Total deposits | 37,612 | |||||
| Shareholders' equity | 4,345 | |||||
| Period-End Balance: | ||||||
| Loans | 16,951 | $ | 15,833 | |||
| Loans excluding Paycheck Protection Program | 15,005 | |||||
| Earning assets | 44,964 | |||||
| Goodwill and intangible assets | 656 | |||||
| Total assets | 47,860 | |||||
| Total deposits | 39,613 | |||||
| Shareholders' equity | 4,372 | |||||
| Adjusted shareholders' equity (1) | 4,022 | |||||
| ASSET QUALITY | ||||||
| ( in thousands) | ||||||
| Allowance for credit losses on loans: | 234,315 | $ | 250,150 | |||
| As a percentage of period-end loans | % | 1.58 | % | |||
| Net charge-offs: | 5,625 | |||||
| Annualized as a percentage of average loans | % | 0.04 | % | |||
| Non-accrual loans: | 29,904 | $ | 57,055 | |||
| As a percentage of total loans | % | 0.36 | % | |||
| As a percentage of total assets | 0.12 | |||||
| CONSOLIDATED CAPITAL RATIOS | ||||||
| Common Equity Tier 1 Risk-Based Capital Ratio | % | 13.42 | % | |||
| Tier 1 Risk-Based Capital Ratio | 14.01 | |||||
| Total Risk-Based Capital Ratio | 15.90 | |||||
| Leverage Ratio | 7.52 | |||||
| Equity to Assets Ratio (period-end) | 9.14 | |||||
| Equity to Assets Ratio (average) | 9.65 | |||||
| (1) Shareholders' equity excluding accumulated other comprehensive income (loss). |
All values are in US Dollars.
| Cullen/Frost Bankers, Inc. | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TAXABLE-EQUIVALENT YIELD/COST AND AVERAGE BALANCES (UNAUDITED) | ||||||||||||||
| 2021 | ||||||||||||||
| 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |||||||||||
| TAXABLE-EQUIVALENT YIELD/COST(1) | ||||||||||||||
| Earning Assets: | ||||||||||||||
| Interest-bearing deposits | % | 0.80 | % | 0.18 | % | 0.15 | % | 0.15 | % | |||||
| Federal funds sold | 1.26 | 0.37 | 0.22 | 0.48 | ||||||||||
| Resell agreements | 1.32 | 0.27 | 0.25 | 0.29 | ||||||||||
| Securities | 2.87 | 2.88 | 3.08 | 3.35 | ||||||||||
| Loans, net of unearned discounts | 4.04 | 3.74 | 3.89 | 4.16 | ||||||||||
| Total earning assets | 2.71 | 2.39 | 2.36 | 2.53 | ||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||
| Interest-bearing deposits: | ||||||||||||||
| Savings and interest checking | 0.04 | 0.01 | 0.01 | 0.01 | ||||||||||
| Money market deposit accounts | 0.35 | 0.12 | 0.11 | 0.10 | ||||||||||
| Time accounts | 0.64 | 0.29 | 0.21 | 0.24 | ||||||||||
| Total interest-bearing deposits | 0.22 | 0.08 | 0.07 | 0.07 | ||||||||||
| Total deposits | 0.13 | 0.05 | 0.04 | 0.04 | ||||||||||
| Federal funds purchased | 0.84 | 0.17 | 0.12 | 0.13 | ||||||||||
| Repurchase agreements | 0.41 | 0.10 | 0.10 | 0.11 | ||||||||||
| Junior subordinated deferrable interest debentures | 2.51 | 1.90 | 1.81 | 1.85 | ||||||||||
| Subordinated notes payable and other notes | 4.69 | 4.69 | 4.70 | 4.70 | ||||||||||
| Total interest-bearing liabilities | 0.26 | 0.11 | 0.10 | 0.10 | ||||||||||
| Net interest spread | 2.45 | 2.28 | 2.26 | 2.43 | ||||||||||
| Net interest income to total average earning assets | 2.56 | 2.33 | 2.31 | 2.47 | ||||||||||
| AVERAGE BALANCES | ||||||||||||||
| ( in millions) | ||||||||||||||
| Assets: | ||||||||||||||
| Interest-bearing deposits | 12,776 | $ | 13,041 | $ | 13,766 | $ | 15,549 | $ | 15,278 | |||||
| Federal funds sold | 31 | 14 | 31 | 2 | ||||||||||
| Resell agreements | 3 | 6 | 8 | 8 | ||||||||||
| Securities | 18,130 | 17,166 | 14,436 | 12,503 | ||||||||||
| Loans, net of unearned discount | 16,674 | 16,386 | 15,984 | 16,189 | ||||||||||
| Total earning assets | 49,062 | $ | 47,880 | $ | 47,339 | $ | 46,008 | $ | 43,980 | |||||
| Liabilities: | ||||||||||||||
| Interest-bearing deposits: | ||||||||||||||
| Savings and interest checking | 12,235 | $ | 12,336 | $ | 11,954 | $ | 11,205 | $ | 10,910 | |||||
| Money market deposit accounts | 12,608 | 11,859 | 10,823 | 10,086 | ||||||||||
| Time accounts | 1,427 | 1,187 | 1,114 | 1,121 | ||||||||||
| Total interest-bearing deposits | 26,371 | 25,001 | 23,142 | 22,117 | ||||||||||
| Total deposits | 44,726 | 42,962 | 41,027 | 39,116 | ||||||||||
| Federal funds purchased | 36 | 28 | 27 | 27 | ||||||||||
| Repurchase agreements | 1,743 | 2,052 | 2,368 | 2,188 | ||||||||||
| Junior subordinated deferrable interest debentures | 123 | 123 | 126 | 137 | ||||||||||
| Subordinated notes payable and other notes | 99 | 99 | 99 | 99 | ||||||||||
| Total interest-bearing funds | 29,516 | $ | 28,372 | $ | 27,302 | $ | 25,762 | $ | 24,568 | |||||
| (1) Taxable-equivalent basis assuming a 21% tax rate. |
All values are in US Dollars.
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