Financial Review Cullen/Frost Bankers, Inc. The following discussion should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2025, and the other information included in the 2025 Form 10-K. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results for the year ending December 31, 2026 or any future period. Dollar amounts in tables are stated in thousands, except for per share amounts. Forward-Looking Statements and Factors that Could Affect Future Results Certain statements contained in this Quarterly Report on Form 10-Q 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 and the implementation of tariffs and other protectionist trade policies. •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, including advances in artificial intelligence and quantum computing. •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. 42 Table of Contents •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, recent military conflict involving the U.S. and Iran, including direct military actions, attacks affecting commercial shipping in and around the Strait of Hormuz, and subsequent retaliatory military strikes, has contributed to heightened geopolitical uncertainty, increased volatility in global financial markets, and significant fluctuations in energy and commodity prices. While diplomatic communications and negotiations may continue, recent statements by U.S. and Iranian officials, including indications that the previously announced ceasefire framework is no longer in effect, have increased the risk of further military escalation and broader regional instability. Ongoing developments in the Middle East, including potential disruptions to maritime trade routes and energy infrastructure, could adversely affect global supply chains, inflation expectations, economic activity, and market conditions. The timing, magnitude, duration, and geographic scope of any further conflict remain highly uncertain and may evolve rapidly in response to military actions, diplomatic developments, government policy decisions, sanctions, and market reactions. Heightened geopolitical uncertainty and volatility in energy markets may influence monetary policy decisions, interest-rate expectations, funding markets, liquidity conditions, foreign-exchange markets, and investor risk sentiment. These factors could adversely affect our funding profile; customer and counterparty credit quality, particularly in sectors sensitive to energy prices, global trade, transportation, manufacturing, and broader economic cycles; and the market value of certain financial instruments. Prolonged market volatility, additional military escalation involving the United States, Iran, or other regional actors, disruptions to global energy supplies or shipping lanes, expanded sanctions, or a deterioration in global economic conditions could negatively impact economic growth, increase borrower stress, reduce business activity, and contribute to higher credit losses and operational risks, including cyber-related incidents, any of which could have a material adverse effect on our business, financial condition, results of operations, and prospects. We will continue to monitor geopolitical developments and assess their potential impact on our customers, operations, liquidity position, capital levels, market exposures, and overall risk profile, and we may adjust our risk management, liquidity management, capital planning, and business continuity strategies as appropriate. Furthermore, financial markets, international relations, and global supply chains continue to be affected by evolving U.S. trade policies and practices. While the U.S. Supreme Court's February 20, 2026 ruling that the International Emergency Economic Powers Act ("IEEPA") does not authorize presidential tariff authority invalidated certain tariffs previously imposed under IEEPA, uncertainty remains regarding tariff refunds, related legal and administrative proceedings, and the scope, duration, and economic impact of replacement or additional trade measures adopted under other U.S. trade laws. Ongoing changes in U.S. trade policy, including the imposition, modification, suspension, or expansion of tariffs and other trade restrictions, may affect customer cash flows, business confidence, capital investment decisions, supply chain strategies, commodity prices, inflation expectations, and market volatility. These developments may increase our exposure to operational, credit, market, liquidity, and compliance risks. Customers with significant exposure to international trade, manufacturing, transportation, agriculture, retail, or other sectors sensitive to global trade and supply chain conditions may experience financial stress, reduced profitability, or weakened operating performance. Trade policy developments may also contribute to volatility in interest rates, foreign exchange markets, and asset valuations. If these developments adversely affect borrower financial condition, market stability, economic growth, or broader business activity, they could have a material adverse effect on our business, financial condition, results of operations, and prospects. We will continue to monitor trade policy developments and adjust our risk management, liquidity management, and capital planning strategies as appropriate. 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. 43 Table of Contents Application of Critical Accounting Policies and Accounting Estimates We follow accounting and reporting policies that conform, in all material respects, to accounting principles generally accepted in the United States (“U.S. GAAP”) and general practices within the financial services industry. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While we base estimates on historical experience, current information and other factors deemed to be relevant, actual results could differ from those estimates. We consider accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management to make assumptions about matters that are highly uncertain and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial statements. Accounting policies related to the allowance for credit losses on financial instruments including loans and off-balance-sheet credit exposures are considered to be critical as these policies involve considerable subjective judgment and estimation by management. In the case of loans, the allowance for credit losses is a contra-asset valuation account, calculated in accordance with Accounting Standards Codification (“ASC”) Topic 326 (“ASC 326”) Financial Instruments - Credit Losses, that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. In the case of off-balance-sheet credit exposures, the allowance for credit losses is a liability account, calculated in accordance with ASC 326, reported as a component of accrued interest payable and other liabilities in our consolidated balance sheets. The amount of each allowance account represents management’s best estimate of lifetime expected credit losses on these financial instruments carried at amortized cost, based on available information from internal and external sources that is relevant to assessing exposure to credit loss over the expected lives of the instruments. Relevant information includes historical credit loss experience, current conditions, and reasonable and supportable forecasts. While historical credit loss experience provides a starting point for estimating credit losses, adjustments may be made to reflect differences in current portfolio‑specific risk characteristics, economic and environmental conditions, or other relevant factors. Although management utilizes its best judgment and the information available, the ultimate adequacy of our allowance accounts depends on a variety of factors beyond our control, including portfolio performance, macroeconomic conditions, changes in interest rates, the accuracy of forecasted assumptions, and regulatory interpretations and supervisory assessments related to credit quality and asset classification. Refer to our 2025 Form 10-K for additional information regarding critical accounting policies. Overview A discussion of our results of operations is presented below. Certain reclassifications have been made to conform prior‑period presentations and provide comparability. Taxable‑equivalent adjustments represent income from tax‑free loans and investments grossed up by the amount of federal income taxes that would have been incurred had such income been fully taxable, calculated using a 21% federal tax rate, thus making tax‑exempt yields comparable to taxable asset yields. 44 Table of Contents Results of Operations Net income available to common shareholders totaled $170.4 million, or $2.70 per diluted common share, and $339.7 million, or $5.35 per diluted common share, for the three and six months ended June 30, 2026, respectively, compared to $155.3 million, or $2.39 per diluted common share, and $304.6 million, or $4.69 per diluted common share for the three and six months ended June 30, 2025, respectively. Selected data for the comparable periods was as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Taxable-equivalent net interest income $ 470,066 $ 450,558 $ 930,858 $ 886,963 Taxable-equivalent adjustment 22,338 20,954 44,608 41,139 Net interest income 447,728 429,604 886,250 845,824 Credit loss expense 9,767 13,129 16,512 26,199 Net interest income after credit loss expense 437,961 416,475 869,738 819,625 Non-interest income 128,281 117,273 264,596 241,284 Non-interest expense 361,700 347,128 727,386 695,194 Income before income taxes 204,542 186,620 406,948 365,715 Income taxes 32,483 29,617 63,902 57,790 Net income 172,059 157,003 343,046 307,925 Preferred stock dividends 1,669 1,669 3,338 3,338 Net income available to common shareholders $ 170,390 $ 155,334 $ 339,708 $ 304,587 Earnings per common share – basic $ 2.70 $ 2.39 $ 5.35 $ 4.69 Earnings per common share – diluted 2.70 2.39 5.35 4.69 Dividends per common share 1.03 1.00 2.03 1.95 Return on average assets 1.30 % 1.22 % 1.31 % 1.20 % Return on average common equity 15.41 15.64 15.28 15.59 Average shareholders’ equity to average assets 8.71 8.07 8.84 8.00 Net income available to common shareholders increased $15.1 million, or 9.7%, for the three months ended June 30, 2026 and increased $35.1 million, or 11.5%, for the six months ended June 30, 2026, compared to the same periods in 2025. The increase during the three months ended June 30, 2026 was primarily the result of an $18.1 million increase in net interest income, an $11.0 million increase in non-interest income, and a $3.4 million decrease in credit loss expense partly offset by a $14.6 million increase in non-interest expense and a $2.9 million increase in income tax expense. The increase during the six months ended June 30, 2026 was primarily the result of a $40.4 million increase in net interest income, a $23.3 million increase in non-interest income, and a $9.7 million decrease in credit loss expense partly offset by a $32.2 million increase in non-interest expense and a $6.1 million increase in income tax expense. Details of the changes in the various components of net income are further discussed below. 45 Table of Contents Net Interest Income Net interest income is the difference between interest income on earning assets, such as loans and securities, and interest expense on liabilities, such as deposits and borrowings, which are used to fund those assets. Net interest income is our largest source of revenue, representing 77.0% of total revenue during the first six months of 2026. Net interest margin is the ratio of taxable-equivalent net interest income to average earning assets for the period. The level of interest rates and the volume and mix of earning assets and interest-bearing liabilities affect net interest income and net interest margin. The Federal Reserve influences market interest rates, including the deposit and loan rates offered by many financial institutions. As of June 30, 2026, approximately 40.4% of our loans had a fixed interest rate, while the remaining loans had floating interest rates that were primarily tied to a benchmark developed by the American Financial Exchange, the Secured Overnight Financing Rate (“SOFR”) (approximately 39.6%); the prime interest rate (approximately 18.6%); or the American Interbank Offered Rate (“AMERIBOR”) (approximately 1.4%). Certain other loans are tied to other indices; however, such loans represent an immaterial portion of our loan portfolio as of June 30, 2026. Select average market rates for the periods indicated are presented in the table below. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Federal funds target rate upper bound 3.75 % 4.50 % 3.75 % 4.50 % Effective federal funds rate 3.63 4.33 3.64 4.33 Interest on reserve balances at the Federal Reserve 3.65 4.40 3.65 4.40 Prime 6.75 7.50 6.75 7.50 AMERIBOR Term-30(1) 3.79 4.40 3.78 4.39 AMERIBOR Term-90(1) 3.91 4.45 3.87 4.44 1-Month Term SOFR(2) 3.64 4.32 3.65 4.32 3-Month Term SOFR(2) 3.67 4.30 3.67 4.30 ____________________ (1)AMERIBOR Term-30 and AMERIBOR Term-90 are published by the American Financial Exchange. (2)1-Month Term SOFR and 3-Month Term SOFR market data are the property of Chicago Mercantile Exchange, Inc., or its licensors as applicable. All rights reserved, or otherwise licensed by Chicago Mercantile Exchange, Inc. As of June 30, 2026, the target range for the federal funds rate was 3.50% to 3.75%. In June 2026, the Federal Reserve released projections whereby the midpoint of the projected appropriate target range for the federal funds rate would rise to 3.8% by the end of 2026 and subsequently decrease to 3.6% by the end of 2027. While there can be no assurance that any increases or decreases in the federal funds rate will occur, these projections imply up to a 25 basis point increase in the federal funds rate during the remainder of 2026, followed by a 25 basis point decrease in 2027. We are primarily funded by core deposits, with non-interest-bearing demand deposits historically being a significant source of funds. This lower-cost funding base is expected to have a positive impact on our net interest income and net interest margin, particularly in rising or high interest rate environments. Nonetheless, our access to and pricing of deposits may be negatively impacted by, among other factors, periods of higher interest rates which could promote increased competition for deposits, including from new financial technology competitors, or provide customers with alternative investment options. See Item 3. Quantitative and Qualitative Disclosures About Market Risk elsewhere in this report for information about our sensitivity to increases and decreases in interest rates. Additional analysis of the components of our net interest margin is presented below. 46 Table of Contents The following tables present an analysis of net interest income and net interest spread for the periods indicated, including average outstanding balances for each major category of interest‑earning assets and interest‑bearing liabilities, the interest earned or paid on those balances, and the related average rates. The tables also present net interest margin calculated on average total interest‑earning assets for the same periods. For these calculations: (i) average balances are based on daily averages; (ii) amounts are stated on a taxable‑equivalent basis assuming a 21% tax rate; (iii) average loans include loans on non‑accrual status; and (iv) average securities include unrealized gains and losses on available‑for‑sale securities, while yields are calculated based on average amortized cost. Quarter To Date Quarter To Date June 30, 2026 June 30, 2025 Average Balance Interest Income/ Expense Yield/ Cost Average Balance Interest Income/ Expense Yield/ Cost Assets: Interest-bearing deposits $ 5,808,427 $ 53,640 3.65 % $ 6,169,238 $ 68,740 4.41 % Federal funds sold 3,574 36 3.97 8,153 97 4.71 Resell agreements 3 — — 22,735 264 4.59 Securities: Taxable 13,587,162 127,845 3.51 13,763,511 130,127 3.48 Tax-exempt 7,061,281 87,454 4.87 6,637,798 76,990 4.48 Total securities 20,648,443 215,299 3.96 20,401,309 207,117 3.79 Loans, net of unearned discounts 22,621,553 348,126 6.17 21,062,552 346,694 6.60 Total Earning Assets and Average Rate Earned 49,082,000 617,101 4.92 47,663,987 622,912 5.07 Cash and due from banks 545,081 571,649 Allowance for credit losses on loans and securities (287,770) (277,367) Premises and equipment, net 1,352,679 1,278,326 Accrued interest and other assets 1,933,730 1,953,930 Total Assets $ 52,625,720 $ 51,190,525 Liabilities: Non-interest-bearing demand deposits 14,027,491 13,788,307 Interest-bearing deposits: Savings and interest checking 9,938,002 3,756 0.15 9,920,031 5,957 0.24 Money market deposit accounts 12,145,498 58,253 1.92 11,518,079 65,397 2.28 Time accounts 6,508,901 52,549 3.24 6,533,855 62,939 3.86 Total interest-bearing deposits 28,592,401 114,558 1.61 27,971,965 134,293 1.93 Total deposits 42,619,892 1.08 41,760,272 1.29 Federal funds purchased 24,350 225 3.66 25,419 281 4.37 Repurchase agreements 4,379,020 29,361 2.65 4,250,484 34,677 3.23 Junior subordinated deferrable interest debentures 123,265 1,727 5.60 123,208 1,939 6.30 Subordinated notes 99,868 1,164 4.69 99,711 1,164 4.69 Total Interest-Bearing Funds and Average Rate Paid 33,218,904 147,035 1.77 32,470,787 172,354 2.12 Accrued interest and other liabilities 797,898 802,767 Total Liabilities 48,044,293 47,061,861 Shareholders’ Equity 4,581,427 4,128,664 Total Liabilities and Shareholders’ Equity $ 52,625,720 $ 51,190,525 Net interest income $ 470,066 $ 450,558 Net interest spread 3.15 % 2.95 % Net interest income to total average earning assets 3.75 % 3.67 % 47 Table of Contents Year To Date Year To Date June 30, 2026 June 30, 2025 Average Balance Interest Income/ Expense Yield/ Cost Average Balance Interest Income/ Expense Yield/ Cost Assets: Interest-bearing deposits $ 6,277,661 $ 115,096 3.65 % $ 6,700,718 $ 148,235 4.40 % Federal funds sold 4,000 80 3.98 5,759 137 4.72 Resell agreements 4,161 85 4.06 16,229 375 4.60 Securities: Taxable 13,169,309 243,044 3.45 13,327,315 246,383 3.38 Tax-exempt 7,083,477 172,595 4.80 6,568,143 149,777 4.43 Total securities 20,252,786 415,639 3.91 19,895,458 396,160 3.71 Loans, net of unearned discounts 22,317,846 686,438 6.20 20,926,267 683,307 6.58 Total Earning Assets and Average Rate Earned 48,856,454 1,217,338 4.90 47,544,431 1,228,214 5.03 Cash and due from banks 572,185 590,495 Allowance for credit losses on loans and securities (285,400) (274,189) Premises and equipment, net 1,338,214 1,267,947 Accrued interest and other assets 1,891,202 1,935,747 Total Assets $ 52,372,655 $ 51,064,431 Liabilities: Non-interest-bearing demand deposits 13,986,010 13,793,243 Interest-bearing deposits: Savings and interest checking 9,986,838 7,631 0.15 9,944,620 11,962 0.24 Money market deposit accounts 12,023,350 113,428 1.90 11,475,456 129,300 2.27 Time accounts 6,427,719 101,742 3.19 6,496,033 126,199 3.92 Total interest-bearing deposits 28,437,907 222,801 1.58 27,916,109 267,461 1.93 Total deposits 42,423,917 1.06 41,709,352 1.29 Federal funds purchased 24,269 444 3.64 21,863 482 4.39 Repurchase agreements 4,269,936 57,445 2.68 4,199,021 67,096 3.18 Junior subordinated deferrable interest debentures 123,258 3,462 5.59 123,200 3,884 6.27 Subordinated notes 99,848 2,328 4.69 99,692 2,328 4.69 Total Interest-Bearing Funds and Average Rate Paid 32,955,218 286,480 1.75 32,359,885 341,251 2.12 Accrued interest and other liabilities 802,597 825,991 Total Liabilities 47,743,825 46,979,119 Shareholders’ Equity 4,628,830 4,085,312 Total Liabilities and Shareholders’ Equity $ 52,372,655 $ 51,064,431 Net interest income $ 930,858 $ 886,963 Net interest spread 3.15 % 2.91 % Net interest income to total average earning assets 3.75 % 3.63 % 48 Table of Contents The following table presents the changes in taxable-equivalent net interest income and identifies the changes due to differences in the average volume of earning assets and interest-bearing liabilities and the changes due to changes in the average interest rate on those assets and liabilities. The changes in net interest income due to changes in both average volume and average interest rate have been allocated to the average volume change or the average interest rate change in proportion to the absolute amounts of the change attributable to each factor. Three Months Ended June 30, 2026 vs. June 30, 2025 Increase (Decrease) Due to Change in Rate Volume Total Interest-bearing deposits $ (11,274) $ (3,826) $ (15,100) Federal funds sold (13) (48) (61) Resell agreements (132) (132) (264) Securities: Taxable 1,154 (3,436) (2,282) Tax-exempt 6,911 3,553 10,464 Loans, net of unearned discounts (23,414) 24,846 1,432 Total earning assets (26,768) 20,957 (5,811) Savings and interest checking (2,212) 11 (2,201) Money market deposit accounts (10,629) 3,485 (7,144) Time accounts (10,148) (242) (10,390) Federal funds purchased (44) (12) (56) Repurchase agreements (6,326) 1,010 (5,316) Junior subordinated deferrable interest debentures (213) 1 (212) Subordinated notes — — — Total interest-bearing liabilities (29,572) 4,253 (25,319) Net change $ 2,804 $ 16,704 $ 19,508 Six Months Ended June 30, 2026 vs. June 30, 2025 Increase (Decrease) Due to Change in Rate Volume Total Interest-bearing deposits $ (24,182) $ (8,957) $ (33,139) Federal funds sold (19) (38) (57) Resell agreements (40) (250) (290) Securities: Taxable 4,990 (8,329) (3,339) Tax-exempt 13,015 9,803 22,818 Loans, net of unearned discounts (41,104) 44,235 3,131 Total earning assets (47,340) 36,464 (10,876) Savings and interest checking (4,383) 52 (4,331) Money market deposit accounts (21,896) 6,024 (15,872) Time accounts (23,150) (1,307) (24,457) Federal funds purchased (87) 49 (38) Repurchase agreements (10,752) 1,101 (9,651) Junior subordinated deferrable interest debentures (424) 2 (422) Subordinated notes — — — Total interest-bearing liabilities (60,692) 5,921 (54,771) Net change $ 13,352 $ 30,543 $ 43,895 Taxable-equivalent net interest income for the three months ended June 30, 2026 increased $19.5 million, or 4.3%, while taxable-equivalent net interest income for the six months ended June 30, 2026 increased $43.9 million, or 4.9%, compared to the same periods in 2025. The increases in taxable-equivalent net interest income during the three and six months ended June 30, 2026 were primarily attributable to lower average costs of interest-bearing deposit accounts and repurchase agreements, as well as increases in the average volumes of loans and tax-exempt securities and higher average tax-equivalent yields on taxable and tax-exempt 49 Table of Contents securities. These favorable variances were partially offset by lower average yields on loans, lower average yields on and volumes of interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve), lower average volumes of taxable securities, and higher average volumes of interest-bearing deposit accounts, among other things. As a result of the aforementioned fluctuations, the taxable-equivalent net interest margin increased 8 basis points from 3.67% during the three months ended June 30, 2025 to 3.75% during the three months ended June 30, 2026 while the taxable-equivalent net interest margin increased 12 basis points from 3.63% during the six months ended June 30, 2025 to 3.75% during the six months ended June 30, 2026. The average volume of interest-earning assets for the three months ended June 30, 2026 increased $1.4 billion while the average volume of interest-earning assets for the six months ended June 30, 2026 increased $1.3 billion compared to the same periods in 2025. The increase in the average volume of interest-earning assets during the three months ended June 30, 2026 was primarily related to a $1.6 billion increase in average loans, and a $423.5 million increase in average tax-exempt securities, partly offset by a $360.8 million decrease in average interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve) and a $176.3 million decrease in average taxable securities, among other things. The average taxable-equivalent yield on interest-earning assets decreased 15 basis points from 5.07% during the three months ended June 30, 2025 to 4.92% during the three months ended June 30, 2026. The increase in the average volume of interest-earning assets during the six months ended June 30, 2026 was primarily related to a $1.4 billion increase in average loans and a $515.3 million increase in average tax-exempt securities partly offset by a $423.1 million decrease in average interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve) and a $158.0 million decrease in average taxable securities, among other things. The average taxable-equivalent yield on interest-earning assets decreased 13 basis points from 5.03% during the six months ended June 30, 2025 to 4.90% during the six months ended June 30, 2026. The average taxable-equivalent yields on interest-earning assets during comparable periods were impacted by changes in market interest rates (as noted in the table above) and changes in the volumes and relative mixes of interest-earning assets. The average taxable-equivalent yield on loans decreased 43 basis points from 6.60% during the three months ended June 30, 2025 to 6.17% during the three months ended June 30, 2026 while the average taxable-equivalent yield on loans decreased 38 basis points from 6.58% during the six months ended June 30, 2025 to 6.20% during the six months ended June 30, 2026. The average taxable-equivalent yield on loans during the three and six months ended June 30, 2026 were impacted by decreases in market interest rates (as noted in the table above). The average volume of loans for the three months ended June 30, 2026 increased $1.6 billion, or 7.4%, while the average volume of loans for the six months ended June 30, 2026 increased $1.4 billion, or 6.6%, compared to the same periods in 2025. Loans made up approximately 46.1% and 45.7% of average interest-earning assets during the three and six months ended June 30, 2026, compared to 44.2% and 44.0% during the same respective periods in 2025. The increases were primarily related to the use of available funds to originate loans. The average taxable-equivalent yield on securities was 3.96% during the three months ended June 30, 2026, increasing 17 basis points from 3.79% during the three months ended June 30, 2025 while the average taxable-equivalent yield on securities was 3.91% during the six months ended June 30, 2026, increasing 20 basis points from 3.71% during the six months ended June 30, 2025. The average yield on taxable securities was 3.51% during the three months ended June 30, 2026, increasing 3 basis points from 3.48% during the same period in 2025 while the average yield on taxable securities was 3.45% during the six months ended June 30, 2026, increasing 7 basis points from 3.38% during the same period in 2025. The average taxable-equivalent yield on tax-exempt securities was 4.87% during the three months ended June 30, 2026, increasing 39 basis points from 4.48% during the same period in 2025 while the average taxable-equivalent yield on tax-exempt securities was 4.80% during the six months ended June 30, 2026, increasing 37 basis points from 4.43% during the same period in 2025. Tax-exempt securities made up approximately 34.2% and 35.0% of total average securities during the three and six months ended June 30, 2026, compared to 32.5% and 33.0% during the same respective periods in 2025. The average volume of total securities during the three months ended June 30, 2026 increased $247.1 million, or 1.2%, compared to the same period in 2025 while the average volume of total securities during the six months ended June 30, 2026 increased $357.3 million, or 1.8%, compared to the same period in 2025. Securities made up approximately 42.1% and 41.5% of average interest-earning assets during the three and six months ended June 30, 2026, compared to 42.8% and 41.9% during the same respective periods in 2025. Average interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve) for the three months ended June 30, 2026 decreased $360.8 million, or 5.8%, compared to the same period in 2025 while average interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve) for the six months ended June 30, 2026 decreased $423.1 million, or 6.3%, compared to the same period in 2025. Interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve) made up approximately 11.8% and 12.8% of 50 Table of Contents average interest-earning assets during the three and six months ended June 30, 2026, compared to 12.9% and 14.1% during the same respective periods in 2025. The decreases during the three and six months ended June 30, 2026 were primarily related to the reinvestment of amounts held in an interest-bearing account at the Federal Reserve into loans and securities. The average yields on interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve) were 3.65% during both the three and six months ended June 30, 2026, compared to 4.41% and 4.40% during the same respective periods in 2025. The average yields on interest-bearing deposits during the three and six months ended June 30, 2026 were impacted by lower average interest rates paid on reserves held at the Federal Reserve, compared to the same periods in 2025. The average rate paid on interest-bearing liabilities was 1.77% during the three months ended June 30, 2026, decreasing 35 basis points from 2.12% during the same period in 2025 while the average rate paid on interest-bearing liabilities was 1.75% during the six months ended June 30, 2026, decreasing 37 basis points from 2.12% during the same period in 2025. Average deposits increased $859.6 million, or 2.1%, during the three months ended June 30, 2026, compared to the same period in 2025 and included a $620.4 million increase in average interest-bearing deposits and a $239.2 million increase in average non-interest-bearing deposits. Average deposits increased $714.6 million, or 1.7%, during the six months ended June 30, 2026, compared to the same period in 2025 and included a $521.8 million increase in average interest-bearing deposits and a $192.8 million increase in average non-interest-bearing deposits. The ratios of average interest-bearing deposits to total average deposits were 67.1% and 67.0% during the three and six months ended June 30, 2026, compared to 67.0% and 66.9% during the same respective periods in 2025. The average cost of deposits is primarily impacted by changes in market interest rates as well as changes in the volume and relative mix of interest-bearing deposits. The average costs of interest-bearing deposits and total deposits were 1.61% and 1.08%, respectively, during the three months ended June 30, 2026, compared to 1.93% and 1.29%, respectively, during the same period in 2025. The average costs of interest-bearing deposits and total deposits were 1.58% and 1.06%, respectively, during the six months ended June 30, 2026, compared to 1.93% and 1.29%, respectively, during the same period in 2025. The average costs of deposits during 2026 were impacted by decreases in the interest rates we pay on our interest-bearing deposit products as a result of decreases in market interest rates. Our net interest spreads, which represent the difference between the average yields earned on earning assets and the average rates paid on interest-bearing liabilities, were 3.15% during both the three and six months ended June 30, 2026, compared to 2.95% and 2.91% during the same respective periods in 2025. The net interest spread, as well as the net interest margin, will be impacted by future changes in short-term and long-term interest rate levels, as well as the impact from the competitive environment, including from new financial technology competitors, and the availability of alternative investment options. A discussion of the effects of changing interest rates on net interest income is set forth in Item 3. Quantitative and Qualitative Disclosures About Market Risk included elsewhere in this report. Our hedging policies permit the use of various derivative financial instruments, including interest rate swaps, swaptions, caps and floors, to manage exposure to changes in interest rates. Details of our derivatives and hedging activities are set forth in Note 7 - Derivative Financial Instruments in the accompanying notes to consolidated financial statements included elsewhere in this report. Information regarding the impact of fluctuations in interest rates on our derivative financial instruments is set forth in Item 3. Quantitative and Qualitative Disclosures About Market Risk included elsewhere in this report. Credit Loss Expense Credit loss expense represents the amount added to the allowance for credit losses for various types of financial instruments, including loans, securities, and off‑balance‑sheet credit exposures, after net charge‑offs, to bring the allowances to a level that, in management’s best estimate, is sufficient to absorb current expected credit losses over the expected lives of the respective financial instruments measured at amortized cost, in accordance with ASC 326. The components of credit loss expense were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Credit loss expense (benefit) related to: Loans $ 7,024 $ 13,466 $ 17,485 $ 28,494 Off-balance-sheet credit exposures 2,743 (337) (973) (2,295) Securities held to maturity — — — — Total $ 9,767 $ 13,129 $ 16,512 $ 26,199 See the section captioned “Allowance for Credit Losses” elsewhere in this discussion for further analysis of credit loss expense related to loans and off-balance-sheet credit exposures. 51 Table of Contents Non-Interest Income Total non-interest income for the three and six months ended June 30, 2026 increased $11.0 million, or 9.4%, and $23.3 million, or 9.7%, respectively, compared to the same periods in 2025. Changes in the various components of non-interest income are discussed in more detail below. Trust and Investment Management Fees. Trust and investment management fees increased $4.0 million, or 9.1%, for the three months ended June 30, 2026 and $9.0 million, or 10.4%, for the six months ended June 30, 2026, compared to the same respective periods in 2025. Investment management fees, the most significant component of trust and investment management fees, represented approximately 82.2% and 80.9% of total trust and investment management fees during the first six months of 2026 and 2025, respectively. The increases in trust and investment management fees during the three and six months ended June 30, 2026 were primarily related to increases in investment management fees (up $4.2 million and $8.5 million, respectively). Trust and investment management fees during the six months ended June 30, 2026 were also impacted by a one-time, $1.3 million administrative fee associated with a large trust account. Investment management fees are generally based on the market value of assets within an account and are therefore sensitive to volatility in the equity and bond markets. The increases in investment management fees during the three and six months ended June 30, 2026 were partly related to higher average equity valuations on managed accounts during 2026 relative to 2025 as well as growth in the number of accounts. Investment management fees during the six months ended June 30, 2026 were also positively impacted by variation in the timing of certain court-approved fees associated with a large guardianship trust. At June 30, 2026, trust assets, including both managed assets and custody assets, were primarily composed of equity securities (50.1% of assets), fixed income securities (29.4% of assets), alternative investments (8.6% of assets) and cash equivalents (6.6% of assets). The estimated fair value of these assets was $52.9 billion (including managed assets of $27.8 billion and custody assets of $25.2 billion) at June 30, 2026, compared to $51.0 billion (including managed assets of $26.7 billion and custody assets of $24.3 billion) at December 31, 2025 and $50.9 billion (including managed assets of $25.8 billion and custody assets of $25.1 billion) at June 30, 2025. Service Charges on Deposit Accounts. Service charges on deposit accounts for the three and six months ended June 30, 2026 increased $5.0 million, or 17.2%, and increased $8.6 million, or 14.8%, respectively, compared to the same periods in 2025. The increase during the three months ended June 30, 2026 was primarily related to increases in commercial service charges (up $2.8 million), and overdraft charges on consumer and commercial accounts (up $1.7 million and $360 thousand, respectively). The increase during the six months ended June 30, 2026, was primarily related to increases in commercial service charges (up $5.0 million) and overdraft charges on consumer and commercial accounts (up $3.0 million and $445 thousand, respectively). The increases in commercial service charges during the three and six months ended June 30, 2026 were partly related to increases in billable services related to analyzed treasury management accounts combined with the effect of a lower average earnings credit rate applied to deposits maintained by treasury management customers which resulted in customers paying for more of their services through fees rather than with earnings credits applied to their deposit balances. The increases in commercial service charges were also partly related to increases in service fees on non-analyzed accounts. Overdraft charges totaled $16.7 million ($13.0 million consumer and $3.7 million commercial) during the three months ended June 30, 2026, compared $14.7 million ($11.4 million consumer and $3.3 million commercial) during the same period in 2025. Overdraft charges totaled $32.3 million ($25.0 million consumer and $7.3 million commercial) during the six months ended June 30, 2026, compared to $28.9 million ($22.1 million consumer and $6.8 million commercial) during the same period in 2025. The increases in overdraft charges during the three and six months ended June 30, 2026 were impacted by higher volumes of fee-assessed overdrafts relative to 2025, in part due to growth in the number of accounts. Insurance Commissions and Fees. Insurance commissions and fees for the three and six months ended June 30, 2026 increased $287 thousand, or 2.1%, and $1.3 million, or 3.8%, respectively, compared to the same periods in 2025. The increase during the three months ended June 30, 2026 was primarily related to increases in property and casualty commissions (up $181 thousand), primarily related to commercial lines, and contingent income (up $102 thousand). The increase during the six months ended June 30, 2026 was primarily related to increases in benefit plan commissions (up $1.2 million) and contingent income (up $553 thousand), partly offset by a decrease in life insurance commissions (down $538 thousand). The increase in benefit plan commissions was primarily due to an increase in business volumes combined with premium and exposure rate increases within the existing customer base. The decrease in life insurance commissions was primarily related to a decrease in business volumes. Contingent income totaled $687 thousand and $5.2 million during the three and six months ended June 30, 2026, respectively, compared to $585 thousand and $4.6 million during the same respective periods in 2025. Contingent income primarily consists of amounts received from various property and casualty insurance carriers related to portfolio growth and the loss performance of insurance policies previously placed. These performance-related contingent payments are seasonal in 52 Table of Contents nature and are mostly received during the first quarter of each year. Performance-related contingent income totaled $4.0 million during the six months ended June 30, 2026 and $3.6 million during the six months ended June 30, 2025. Contingent income also includes amounts received from various benefit plan insurance companies related to the volume of business generated and/or the subsequent retention of such business. This benefit plan related contingent income totaled $465 thousand and $1.1 million during the three and six months ended June 30, 2026, respectively, compared to $512 thousand and $1.0 million during the same respective periods in 2025. Interchange and Card Transaction Fees. Interchange fees, or “swipe” fees, are charges that merchants pay to us and other card-issuing banks for processing electronic payment transactions. Interchange and card transaction fees consist of income from debit and credit card usage, point of sale income from PIN-based card transactions and ATM service fees. Interchange and card transaction fees are reported net of related network costs. Net interchange and card transaction fees for the three and six months ended June 30, 2026 increased $927 thousand, or 16.5%, and increased $2.1 million, or 18.7%, respectively, compared to the same periods in 2025. These increases were primarily due to increased card transaction volumes. A comparison of gross and net interchange and card transaction fees for the reported periods is presented in the table below. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Income from card transactions $ 11,997 $ 10,934 $ 23,281 $ 21,161 ATM service fees 886 899 1,682 1,733 Gross interchange and card transaction fees 12,883 11,833 24,963 22,894 Network costs 6,337 6,214 11,885 11,873 Net interchange and card transaction fees $ 6,546 $ 5,619 $ 13,078 $ 11,021 Federal Reserve rules applicable to financial institutions that have assets of $10 billion or more provide that the maximum permissible interchange fee for an electronic debit transaction is the sum of 21 cents per transaction and 5 basis points multiplied by the value of the transaction. An upward adjustment of up to 1 cent per transaction is permitted if the card issuer develops and implements policies and procedures reasonably designed to meet specified fraud-prevention standards. Federal Reserve rules governing routing and network exclusivity also require issuers to enable at least two unaffiliated networks for routing transactions on each debit or prepaid card product. In August 2025, the U.S. District Court for the District of North Dakota vacated the Federal Reserve's current interchange fee rule but stayed the effect of its ruling pending appeal. As a result, the current interchange fee framework remains in effect while the litigation proceeds. The outcome of this litigation could result in changes to the regulation of debit card interchange fees which could have a significant and adverse effect on the fees banks can charge on debit card transactions. In October 2023, the Federal Reserve issued a proposal that would reduce the maximum permissible interchange fee for an electronic debit transaction to the sum of 14.4 cents per transaction and 4 basis points multiplied by the value of the transaction, while increasing the maximum fraud-prevention adjustment from 1.0 cent to 1.3 cents. The proposal would also establish a framework for updating the interchange fee cap every two years based on issuer cost data collected by the Federal Reserve from large debit card issuers. Had the proposed interchange fee cap been in effect during the reported periods, interchange and debit card transaction fees would have been approximately 30% lower. The comment period for the proposal ended in May 2024. As of June 30, 2026, the Federal Reserve had not adopted a final rule implementing the proposal. Accordingly, the extent to which any future changes to the interchange fee cap may affect the Company's revenues cannot be determined at this time. Other Charges, Commissions, and Fees. Other charges, commissions, and fees for the three and six months ended June 30, 2026 decreased $180 thousand, or 1.3%, and $498 thousand, or 1.8%, compared to the same respective periods in 2025. The decreases during the three and six months ended June 30, 2026 were primarily related to decreases in income from the placement of annuities (down $556 thousand and $856 thousand, respectively) and commitment fees on unused lines of credit (down $274 thousand and $410 thousand, respectively), among other things. These decreases were partially offset by increases in income from the placement of mutual funds (up $474 thousand and $736 thousand, respectively), among other things. Net Gain/Loss on Securities Transactions. There were no sales of securities during the six months ended June 30, 2026. During the six months ended June 30, 2025, we sold certain available-for-sale securities with amortized costs totaling $40.1 million and realized a net loss of $14 thousand. These sales were primarily made in connection with a municipal tender offer during the first quarter. 53 Table of Contents Other Non-Interest Income. Other non-interest income for the three and six months ended June 30, 2026 increased $974 thousand, or 8.9%, and $2.8 million, or 12.1%, respectively, compared to the same periods in 2025. The increase during the three months ended June 30, 2026 was primarily related to an increase in sundry and other miscellaneous income (up $1.5 million), partly offset by a decrease in public finance underwriting fees (down $425 thousand). The increase during the six months ended June 30, 2026 was primarily related to increases in sundry and other miscellaneous income (up $4.0 million); benefits received on life insurance policies (up $585 thousand); and income from customer derivatives trading activities (up $551 thousand); among other things. The increase from these items was partly offset by a decrease in gains on the sale of foreclosed and other assets (down $2.1 million), among other things. Sundry and other miscellaneous income during the six months ended June 30, 2026 included, during the first quarter, a $2.7 million one-time fee associated with the termination of a customer lease recognized and, during the second quarter, $2.2 million related to the refund of certain tax credits associated with payroll taxes paid during the COVID-19 pandemic. The increase in income from customer derivatives trading activities during the six months ended June 30, 2026 and the decrease in public finance underwriting fees during the three months ended June 30, 2026 were primarily attributable to fluctuations in transaction volumes. Gains on the sale of foreclosed and other assets during the six months ended June 30, 2025 included a $2.5 million gain on the sale of a foreclosed real estate property. Non-Interest Expense Total non-interest expense for the three and six months ended June 30, 2026 increased $14.6 million, or 4.2%, and $32.2 million, or 4.6%, respectively, compared to the same periods in 2025. Changes in the various components of non-interest expense are discussed below. Salaries and Wages. Salaries and wages for the three and six months ended June 30, 2026 increased $10.8 million, or 6.7%, and $16.1 million, or 5.0%, respectively, compared to the same periods in 2025. The increases were primarily related to annual merit and market-based salary increases, as well as growth in the number of employees. The increase in staffing levels was driven in part by investments in organic expansion across various markets. Salaries and wages for the three and six months ended June 30, 2026 also reflected, to a lesser extent, increases in incentive compensation and stock-based compensation. Employee Benefits. Employee benefits expense for the three and six months ended June 30, 2026 increased $2.3 million, or 7.1%, and increased $4.8 million, or 6.4%, respectively, compared to the same periods in 2025. The increases were primarily related to increases in medical and dental benefits expense (up $1.6 million and $3.3 million, respectively), primarily due to higher claims and related costs; payroll taxes (up $530 thousand and $1.3 million, respectively); and 401(k) plan expense (up $333 thousand and $607 thousand, respectively). These increases were partly offset by increases in the net periodic pension benefit related to our defined benefit retirement and restoration plans (up $432 thousand and $864 thousand, respectively). Our defined benefit retirement and restoration plans have been frozen since 2001 which has reduced the volatility of retirement plan expense. However, we continue to have funding obligations associated with these plans, and future pension benefit or expense could fluctuate based on factors such as the performance of plan assets, changes in interest rates, and employee turnover. See Note 11 - Defined Benefit Plans for additional information related to our net periodic pension benefit/expense. Net Occupancy. Net occupancy expense for the three and six months ended June 30, 2026 increased $583 thousand, or 1.7%, and increased $2.1 million, or 3.0%, respectively, compared to the same periods in 2025. The increase during the three months ended June 30, 2026 was primarily related to increases in depreciation on buildings and leasehold improvements (up $833 thousand); and repairs, maintenance and service contracts expense (up $267 thousand), among other things. These increases were partly offset by decreases in building insurance expense (down $350 thousand) and property tax expense (down $327 thousand), among other things. The increase during the six months ended June 30, 2026 was primarily related to increases in depreciation on buildings and leasehold improvements (up $1.7 million); a decrease in rental income from tenants (down $625 thousand); and an increase in lease expense (up $362 thousand), among other things. These increases were partly offset by a decrease in building insurance expense (down $693 thousand), among other things. Technology, Furniture, and Equipment. Technology, furniture, and equipment expense for the three and six months ended June 30, 2026 increased $2.0 million, or 4.9%, and $3.5 million, or 4.4%, compared to the same periods in 2025. The increases during the three and six months ended June 30, 2026 were primarily related to increases in cloud services expense (up $1.0 million and $2.8 million, respectively), service contracts expense (up $583 thousand and $623 thousand, respectively), and equipment rental expense (up $342 thousand and $531 thousand, respectively), among other things. These increases were partly offset by decreases in software amortization expense during the three and six months ended June 30, 2026 (down $394 thousand and $1.1 million, respectively). Deposit Insurance. Deposit insurance expense totaled $6.3 million and $13.5 million for the three and six months ended June 30, 2026, respectively, and did not significantly fluctuate compared to the same periods in 2025. 54 Table of Contents Other Non-Interest Expense. Other non-interest expense for the three and six months ended June 30, 2026 decreased $854 thousand, or 1.2%, and increased $5.9 million, or 4.4%, respectively, compared to the same periods in 2025. The decrease during the three months ended June 30, 2026 included decreases in sundry and other miscellaneous expense (down $1.6 million); advertising/promotions expense (down $853 thousand); business development expense (down $638 thousand); professional services expense (down $486 thousand); and amortization of deferred costs on loan commitments (down $470 thousand), among other things. These decreases were partly offset by an increase in fraud losses, primarily related to deposits (up $2.1 million), among other things. The increase during the six months ended June 30, 2026 included increases in fraud losses, primarily related to deposits (up $4.5 million); advertising/promotions expense (up $1.0 million); amortization of deferred costs on loan commitments (up $760 thousand); travel, meals and entertainment (up $759 thousand); and research and platform fees (up $439 thousand), among other things. The increases from these items were partly offset by decreases in sundry and other miscellaneous expenses (down $1.7 million); donations expense (down $914 thousand) and foreclosed assets expense (down $561 thousand), and business development expense (down $494 thousand), among other things. On April 22, 2026, Sefas Innovation, Inc., a third-party vendor used by Frost Bank, notified us that they experienced a cybersecurity incident that likely involved certain Frost Bank customer data. The incident neither affected our systems or networks, nor disrupted our operations. At this time, the incident is not reasonably likely to have a material impact on our financial condition or results of operations. Results of Segment Operations We are managed under a matrix organizational structure whereby our two primary operating segments, Banking and Frost Wealth Advisors, overlap a regional reporting structure. A third operating segment, Non-Banks, is for the most part the parent holding company, as well as certain other immaterial non-bank subsidiaries of the parent that, for the most part, have little or no activity. A description of each segment, the methodologies used to measure segment financial performance and summarized operating results by segment are described in Note 14 - Operating Segments in the accompanying notes to consolidated financial statements included elsewhere in this report. Segment operating results are discussed in more detail below. Banking Net income for the three and six months ended June 30, 2026 increased $15.1 million, or 9.9%, and increased $32.9 million, or 11.0%, respectively, compared to the same periods in 2025. The increase during the three months ended June 30, 2026 was primarily the result of an $18.2 million increase in net interest income, a $7.7 million increase in non-interest income, and a $3.4 million decrease in credit loss expense, partly offset by a $11.2 million increase in non-interest expense and a $3.0 million increase in income tax expense. The increase during the six months ended June 30, 2026 was primarily the result of a $40.5 million increase in net interest income, a $14.9 million increase in non-interest income, and a $9.7 million decrease in credit loss expense partly offset by a $26.6 million increase in non-interest expense and a $5.6 million increase in income tax expense. Net interest income for the three and six months ended June 30, 2026 increased $18.2 million, or 4.2%, and increased $40.5 million, or 4.8%, respectively, compared to the same periods in 2025. The increases during the three and six months ended June 30, 2026 were primarily attributable to lower average costs of interest-bearing deposit accounts and repurchase agreements, as well as increases in the average volumes of loans and tax-exempt securities and higher average tax-equivalent yields on taxable and tax-exempt securities. These favorable variances were partially offset by lower average yields on loans, lower average yields on and volumes of interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve), lower average volumes of taxable securities, and higher average volumes of interest-bearing deposit accounts, among other things. See the analysis of net interest income included in the section captioned “Net Interest Income” included elsewhere in this discussion. Credit loss expense for the three and six months ended June 30, 2026 totaled $9.8 million and $16.5 million compared to $13.1 million and $26.2 million during the same period in 2025. See the sections captioned “Credit Loss Expense” and “Allowance for Credit Losses” elsewhere in this discussion for further analysis of credit loss expense related to loans and off-balance-sheet commitments. Non-interest income for the three and six months ended June 30, 2026 increased $7.7 million, or 11.8%, and increased $14.9 million, or 10.7%, respectively, compared to the same periods in 2025. The increases during the three and six months ended June 30, 2026 were primarily related to increases in service charges on deposit accounts; other non-interest income; interchange and card transaction fees; and insurance commissions and fees. The increases in service charges on deposit accounts were primarily related to increases in commercial service charges and overdraft charges on consumer accounts. The increase in other non-interest income during the three months ended June 30, 2026 was primarily related to an increase in sundry and other miscellaneous income partly offset by decreases in income from customer securities trading activities and public finance underwriting fees. The increase in other non-interest income during the six months ended June 30, 2026 was primarily related to increases in sundry and other miscellaneous income; benefits received on life insurance policies; and income from customer 55 Table of Contents derivatives trading activities, among other things, partly offset by a decreases in gains on the sale of foreclosed and other assets, and income from customer securities trading activities, among other things. The increases in interchange and card transaction fees were primarily related to increased card transaction volumes. The increase in insurance commissions and fees during the three months ended June 30, 2026 was primarily related to increases in property and casualty commissions, primarily related to commercial lines, and contingent income, while the increase during the six months ended June 30, 2026 was primarily related to increases in benefit plan commissions and contingent income, partly offset by a decrease in life insurance commissions. See the analysis of these categories of non-interest income included in the section captioned “Non-Interest Income” included elsewhere in this discussion. Non-interest expense for three and six months ended June 30, 2026 increased $11.2 million, or 3.7%, and increased $26.6 million, or 4.4%, respectively, compared to the same periods in 2025. The increase during the three months ended June 30, 2026 was primarily due to increases in salaries and wages; employee benefits expense; technology, furniture, and equipment expense; and net occupancy expense, partly offset by a decrease in other non-interest expense. The increase during the six months ended June 30, 2026 was primarily due to increases in salaries and wages; other non-interest expense; employee benefits expense; technology, furniture, and equipment expense; and net occupancy expense. The increases in salaries and wages were primarily related to annual merit and market increases and growth in the number of employees. Salaries and wages were also impacted, to a lesser extent, by increases in incentive compensation and stock-based compensation. The decrease in other non-interest expense during the three months ended June 30, 2026 included decreases in sundry and other miscellaneous expense; advertising/promotions expense; business development expense; and amortization of deferred costs on loan commitments, among other things, partly offset by an increase in fraud losses, primarily related to deposits, among other things. The increase in other non-interest expense during the six months ended June 30, 2026 included increases in fraud losses, primarily related to deposits; advertising/promotions expense; travel, meals and entertainment; and amortization of deferred costs on loan commitments, among other things, partly offset by decreases in sundry and other miscellaneous expenses; donations expense; and foreclosed assets expense, among other things. The increases in employee benefits expense were primarily related to increases in medical/dental benefits expense, payroll taxes, and 401(k) plan expense, among other things, partly offset by increases in the net periodic pension benefit related to our defined benefit retirement and restoration plans. The increases in technology, furniture, and equipment expense were primarily related to increases in cloud services expense, service contracts expense, and equipment rental, among other things, partly offset by decreases in software amortization. The increases in net occupancy expense were primarily related to increases in depreciation on buildings and leasehold improvements, among other things, partly offset by decreases in building insurance expense, among other things. See the analysis of these categories of non-interest expense included in the section captioned “Non-Interest Expense” included elsewhere in this discussion. Frost Wealth Advisors Net income for the three and six months ended June 30, 2026 decreased $565 thousand, or 6.0%, and increased $1.1 million, or 6.2%, respectively, compared to the same periods in 2025. The decrease during the three months ended June 30, 2026 was primarily the result of a $3.6 million increase in non-interest expense partly offset by a $3.2 million increase in non-interest income, among other things. The increase during the six months ended June 30, 2026 was primarily the result of a $7.8 million increase in non-interest income partly offset by a $6.0 million increase in non-interest expense, among other things. Non-interest income for the three and six months ended June 30, 2026 increased $3.2 million, or 6.1%, and increased $7.8 million, or 7.7%, respectively, compared to the same periods in 2025. The increases during the three and six months ended June 30, 2026 were primarily due to increases in trust and investment management fees. The increases in trust and investment management fees during the three and six months ended June 30, 2026 were primarily related to increases in investment management fees. Trust and investment management fees for the six months ended June 30, 2026, were also impacted by a one-time, $1.3 million administrative fee associated with a large trust account. The increases in investment management fees during the three and six months ended June 30, 2026 were partly related to higher average equity valuations on managed accounts during 2026 relative to 2025, as well as growth in the number of accounts. Investment management fees during the six months ended June 30, 2026 were also positively impacted by variation in the timing of certain court-approved fees associated with a large guardianship trust. See the analysis of these categories of non-interest income in the section captioned “Non-Interest Income” included elsewhere in this discussion. Non-interest expense for the three and six months ended June 30, 2026 increased $3.6 million, or 8.7%, and increased $6.0 million, or 7.1%, respectively, compared to the same periods in 2025. The increases during the three and six months ended June 30, 2026 were primarily related to increases in salaries and wages; other non-interest expense; employee benefits expense; and net occupancy expense, among other things. The increases in salaries and wages during the three and six months ended June 30, 2026 were primarily related to annual merit and market-based salary increases, as well as growth in the number of employees, and increases in incentive compensation. Salaries and wages during the six months ended June 30, 2026, were also impacted by an increase in commissions expense. The increase in other non-interest expense during the three months ended June 30, 2026 was primarily related to increases in professional services expense and sundry and other miscellaneous expense, 56 Table of Contents among other things, while the increase during the six months ended June 30, 2026 was primarily related to increases in research and platform fees and professional services expense, among other things. The increases in employee benefits expense during the three and six months ended June 30, 2026 were primarily related to increases in medical/dental benefits expense, payroll taxes, and 401(k) plan expense. The increases in net occupancy expense during the three and six months ended June 30, 2026 were related to increases in lease expense. See the analysis of these categories of non-interest expense included in the section captioned “Non-Interest Expense” included elsewhere in this discussion. Non-Banks The Non-Banks operating segment had a net loss of $3.9 million and $6.9 million during the three and six months ended June 30, 2026, compared to net loss of $4.4 million and $8.0 million during the same period in 2025. The decreases in the net loss during the three and six months ended June 30, 2026 were primarily due to a decrease in net interest expense due to decreases in the average rates paid on our long-term borrowings, among other things. Income Taxes During the three months ended June 30, 2026, we recognized income tax expense of $32.5 million, for an effective tax rate of 15.9%, compared to $29.6 million, for an effective tax rate of 15.9%, for the same period in 2025. During the six months ended June 30, 2026, we recognized income tax expense of $63.9 million, for an effective tax rate of 15.7%, compared to $57.8 million, for an effective tax rate of 15.8%, for the same period in 2025. The effective income tax rates differed from the U.S. statutory federal income tax rate of 21% during 2026 and 2025 primarily due to the effect of tax-exempt income from securities, loans and life insurance policies and, for 2025, the income tax effects associated with stock-based compensation, among other things, and their relative proportion to total pre-tax net income. The increases in income tax expense during the three and six months ended June 30, 2026 were primarily due to increases in projected pre-tax net income. The effective tax rates during the three and six months ended June 30, 2026 did not significantly fluctuate compared to the same respective periods in 2025. Average Balance Sheet Average assets totaled $52.4 billion for the six months ended June 30, 2026, an increase of $1.3 billion, or 2.6%, compared to average assets for the same period in 2025. Earning assets increased $1.3 billion, or 2.8%, during the six months ended June 30, 2026, compared to earning assets for the same period in 2025. The increase in earning assets was primarily related to a $1.4 billion increase in average loans and a $515.3 million increase in average tax-exempt securities partly offset by a $423.1 million decrease in average interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve) and a $158.0 million decrease in average taxable securities. Average deposits increased $714.6 million, or 1.7%, during the six months ended June 30, 2026, compared to the same period in 2025. The increase included a $521.8 million increase in interest-bearing deposits and a $192.8 million increase in non-interest-bearing deposits. Average non-interest-bearing deposits made up 33.0% and 33.1% of average total deposits during the six months ended June 30, 2026 and 2025, respectively. Loans Details of our loan portfolio are presented in Note 3 - Loans in the accompanying notes to consolidated financial statements included elsewhere in this report. Loans increased $1.1 billion, or 5.0%, from $21.9 billion at December 31, 2025 to $23.0 billion at June 30, 2026. The majority of our loan portfolio is comprised of commercial and industrial loans, energy loans, and real estate loans. Real estate loans include both commercial and consumer balances. Selected details related to our loan portfolio segments are presented below. Refer to our 2025 Form 10-K for a more detailed discussion of our loan origination and risk management processes. Commercial and Industrial. Commercial and industrial loans totaled $6.3 billion at both June 30, 2026 and December 31, 2025. Our commercial and industrial loans are a diverse group of loans to small, medium, and large businesses. The purpose of these loans varies from supporting seasonal working capital needs to term financing of equipment. While some short-term loans may be made on an unsecured basis, most are secured by the assets being financed, with collateral margins that are consistent with our loan policy guidelines. The commercial and industrial loan portfolio also includes commercial leases and purchased shared national credits ("SNC"s). Energy. Energy loans include loans to entities and individuals that are engaged in various energy-related activities including (i) the development and production of oil or natural gas, (ii) providing oil and gas field servicing, (iii) providing energy-related transportation services, (iv) providing equipment to support oil and gas drilling, (v) refining petrochemicals, or (vi) trading oil, gas, and related commodities. Energy loans increased $39.0 million, or 3.6%, totaling approximately $1.1 billion at both June 30, 2026 and December 31, 2025. Energy loans are one of our largest industry concentrations, totaling approximately 57 Table of Contents 5.0% of total loans at both June 30, 2026 and December 31, 2025. The average loan size, the significance of the portfolio, and the specialized nature of the energy industry requires a highly prescriptive underwriting policy. Exceptions to this policy are rarely granted. Due to the large borrowing requirements of this customer base, the energy loan portfolio includes participations and SNCs. Purchased Shared National Credits. SNCs are participations purchased from upstream financial organizations and tend to be larger in size than our originated portfolio. Our purchased SNC portfolio totaled $750.5 million at June 30, 2026, decreasing $125.2 million, or 14.3%, from $875.7 million at December 31, 2025. At June 30, 2026, approximately 39.6% of outstanding purchased SNCs were related to the construction industry and approximately 21.2% were related to the real estate management industry. The remaining purchased SNCs were diversified throughout various other industries, with no other single industry exceeding 10% of the total purchased SNC portfolio. SNC participations are originated in the normal course of business to meet the needs of our customers. As a matter of policy, we generally only participate in SNCs for companies headquartered in or which have significant operations within our market areas. In addition, we must have direct access to the company’s management, an existing banking relationship, or the expectation of broadening the relationship with other banking products and services within the following 12 to 24 months. SNCs are reviewed at least quarterly for credit quality and business development successes. Commercial Real Estate. Commercial real estate loans increased $677.8 million, or 6.6%, from $10.3 billion at December 31, 2025 to $11.0 billion at June 30, 2026. Commercial real estate loans represented 73.0% and 73.5% of total real estate loans at June 30, 2026 and December 31, 2025, respectively. The majority of our commercial real estate loan portfolio consists of commercial real estate mortgages, which includes both permanent and intermediate term loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Consequently, these loans must undergo the analysis and underwriting process of a commercial and industrial loan, as well as that of a real estate loan. At June 30, 2026, approximately half of the outstanding principal balance of our commercial real estate loans (excluding construction and land) were secured by owner-occupied properties. Consumer Real Estate and Other Consumer Loans. The consumer real estate loan portfolio increased $351.3 million, or 9.4%, from $3.7 billion at December 31, 2025 to $4.1 billion at June 30, 2026. Combined, home equity loans and lines of credit made up 53.7% and 56.6% of the consumer real estate loan total at June 30, 2026 and December 31, 2025, respectively. We offer home equity loans up to 80% of the estimated value of the personal residence of the borrower, less the value of existing mortgages and home improvement loans. We also originate 1-4 family mortgage loans for portfolio investment purposes. Such loans increased $292.2 million, or 49.1%, from $594.8 million at December 31, 2025 to $887.0 million at June 30, 2026. Consumer and other loans decreased $2.9 million, or 0.6%, from $460.7 million at December 31, 2025 to $457.8 million at June 30, 2026. The consumer and other loan portfolio primarily consists of unsecured revolving credit products, secured personal loans, motor vehicle loans, overdrafts, and other similar types of credit facilities. 58 Table of Contents Accruing Past Due Loans. Accruing past due loans are presented in the following tables. Also see Note 3 - Loans in the accompanying notes to consolidated financial statements included elsewhere in this report. Accruing Loans 30-89 Days Past Due Accruing Loans 90 or More Days Past Due Total Accruing Past Due Loans Total Loans Amount Percent of Loans in Category Amount Percent of Loans in Category Amount Percent of Loans in Category June 30, 2026 Loans held for investment: Commercial and industrial $ 6,325,658 $ 20,254 0.32 % $ 4,462 0.07 % $ 24,716 0.39 % Energy 1,133,640 20,586 1.82 — — 20,586 1.82 Commercial real estate: Owner occupied 4,297,680 15,343 0.36 1,034 0.02 16,377 0.38 Non-owner occupied 3,970,141 61,894 1.56 — — 61,894 1.56 Construction and land 2,720,755 3,220 0.12 1,142 0.04 4,362 0.16 Consumer real estate 4,069,982 25,205 0.62 6,932 0.17 32,137 0.79 Consumer and other 457,802 5,572 1.22 363 0.08 5,935 1.30 Total $ 22,975,658 $ 152,074 0.66 $ 13,933 0.06 $ 166,007 0.72 Loans held for sale: Commercial real estate: Owner occupied $ 9,282 $ 30 0.32 % $ — — % $ 30 0.32 % Construction and land 139 — — % — — % — — Total $ 9,421 $ 30 0.32 % $ — — % $ 30 0.32 December 31, 2025 Commercial and industrial $ 6,306,980 $ 31,212 0.49 % $ 4,273 0.07 % $ 35,485 0.56 % Energy 1,094,669 19,480 1.78 — — 19,480 1.78 Commercial real estate: Owner occupied 3,987,913 17,074 0.43 3,465 0.09 20,539 0.52 Non-owner occupied 3,773,028 49,305 1.31 6,290 0.17 55,595 1.48 Construction and land 2,549,869 7,955 0.31 1,451 0.06 9,406 0.37 Consumer real estate 3,718,668 26,281 0.71 5,680 0.15 31,961 0.86 Consumer and other 460,685 5,024 1.09 512 0.11 5,536 1.20 Total $ 21,891,812 $ 156,331 0.71 $ 21,671 0.10 $ 178,002 0.81 Accruing past due loans held for investment at June 30, 2026 decreased $12.0 million compared to December 31, 2025. The decrease was primarily related to decreases in past due commercial and industrial loans (down $10.8 million), past due commercial real estate loans - construction (down $5.0 million), and past due commercial real estate loans - owner occupied (down $4.2 million) partly offset by increases in past due commercial real estate loans - non-owner occupied (up $6.3 million) and past due energy loans (up $1.1 million). 59 Table of Contents Non-Accrual Loans. Non-accrual loans are presented in the table below. Also see in Note 3 - Loans in the accompanying notes to consolidated financial statements included elsewhere in this report. June 30, 2026 December 31, 2025 Non-Accrual Loans Non-Accrual Loans Total Loans Amount Percent of Loans in Category Total Loans Amount Percent of Loans in Category Loans held for investment: Commercial and industrial $ 6,325,658 $ 23,691 0.37 % $ 6,306,980 $ 50,659 0.80 % Energy 1,133,640 2,523 0.22 1,094,669 3,023 0.28 Commercial real estate: Owner occupied 4,297,680 14,183 0.33 3,987,913 7,581 0.19 Non-owner occupied 3,970,141 4,566 0.12 3,773,028 465 0.01 Construction and land 2,720,755 56,054 2.06 2,549,869 1,874 0.07 Consumer real estate 4,069,982 8,876 0.22 3,718,668 6,615 0.18 Consumer and other 457,802 257 0.06 460,685 265 0.06 Total $ 22,975,658 $ 110,150 0.48 $ 21,891,812 $ 70,482 0.32 Allowance for credit losses on loans $ 283,712 $ 281,495 Ratio of allowance for credit losses on loans to non-accrual loans 257.57 % 399.39 % Loans held for sale: Commercial real estate: Owner occupied $ 9,282 $ 2,428 26.16 % $ — $ — — % Construction and land 139 139 100.00 % — — — Total $ 9,421 $ 2,567 27.25 % $ — $ — — Generally, loans are placed on non‑accrual status when principal or interest becomes 90 days past due, when management determines that the collectibility of principal or interest is in doubt, or when otherwise required by regulatory guidelines. Upon placement on non‑accrual status, accrued but uncollected interest is reversed and charged to current‑period earnings. Subsequent cash receipts on non‑accrual loans are generally applied to principal, and interest income is recognized only after the recovery of principal is reasonably assured. Classification of a loan as non‑accrual does not necessarily preclude the ultimate collection of principal or interest. Non-accrual loans held for investment increased $39.7 million, from $70.5 million at December 31, 2025 to $110.2 million at June 30, 2026, primarily due to increases in non-accrual commercial real estate loans of all classes and, to a lesser extent, an increase in non-accrual consumer real estate loans. These increases were partly offset by a decrease in non-accrual commercial and industrial loans. There were no non-accrual commercial and industrial loans in excess of $5.0 million at June 30, 2026. Non-accrual commercial and industrial loans held for investment included one credit relationship in excess of $5.0 million totaling $28.5 million at December 31, 2025. Principal payments during 2026 reduced the outstanding balance of this credit relationship to $3.3 million at June 30, 2026. There were no non-accrual energy loans in excess of $5.0 million at either June 30, 2026 and December 31, 2025. Non-accrual commercial real estate loans - construction and land held for investment included one credit relationship in excess of $5.0 million totaling $53.9 million at June 30, 2026. There were no other non-accrual credit relationships in excess of $5.0 million in any class of commercial real estate at June 30, 2026 or December 31, 2025. Allowance for Credit Losses In the case of loans and securities, allowances for credit losses are contra-asset valuation accounts, calculated in accordance with ASC 326, that are deducted from the amortized cost basis of these assets to present the net amount expected to be collected. In the case of off-balance-sheet credit exposures, the allowance for credit losses is a liability account, calculated in accordance with ASC 326, reported as a component of accrued interest payable and other liabilities in our consolidated balance sheets. The amount of each allowance account represents management's best estimate of lifetime expected credit losses on these financial instruments carried at amortized cost, based on available information from internal and external sources that is relevant to assessing exposure to credit loss over the expected lives of the instruments. Relevant information includes historical credit loss experience, current conditions, and reasonable and supportable forecasts. While historical credit loss experience provides a starting point for estimating credit losses, adjustments may be made to reflect differences in current portfolio‑specific risk characteristics, economic and environmental conditions, or other relevant factors. Although management utilizes its best judgment and the information available, the ultimate adequacy of our allowance accounts depends on a variety 60 Table of Contents of factors beyond our control, including portfolio performance, macroeconomic conditions, changes in interest rates, the accuracy of forecasted assumptions, and regulatory interpretations and supervisory assessments related to credit quality and asset classification. Refer to our 2025 Form 10-K for additional information regarding our accounting policies related to credit losses. Allowance for Credit Losses - Loans. The table below provides, as of the dates indicated, an allocation of the allowance for loan losses by loan portfolio segment; however, allocation of a portion of the allowance to one segment does not preclude its availability to absorb losses in other segments. Amount of Allowance Allocated Percent of Loans in Each Category to Total Loans Total Loans Ratio of Allowance Allocated to Loans in Each Category June 30, 2026 Commercial and industrial $ 91,420 27.5 % $ 6,325,658 1.45 % Energy 9,407 5.0 1,133,640 0.83 Commercial real estate: Owner occupied 44,650 18.7 4,297,680 1.04 Non-owner occupied 53,777 17.3 3,970,141 1.35 Construction and land 44,078 11.8 2,720,755 1.62 Consumer real estate 29,146 17.7 4,069,982 0.72 Consumer and other 11,234 2.0 457,802 2.45 Total $ 283,712 100.0 % $ 22,975,658 1.23 December 31, 2025 Commercial and industrial $ 98,439 28.8 % $ 6,306,980 1.56 % Energy 11,563 5.0 1,094,669 1.06 Commercial real estate: Owner occupied 41,526 18.2 3,987,913 1.04 Non-owner occupied 52,054 17.2 3,773,028 1.38 Construction and land 41,530 11.7 2,549,869 1.63 Consumer real estate 25,637 17.0 3,718,668 0.69 Consumer and other 10,746 2.1 460,685 2.33 Total $ 281,495 100.0 % $ 21,891,812 1.29 The allowance allocated to commercial and industrial loans totaled $91.4 million, or 1.45% of total commercial and industrial loans, at June 30, 2026, decreasing $7.0 million, or 7.1%, compared to $98.4 million, or 1.56% of total commercial and industrial loans, at December 31, 2025. Qualitative factor (“Q-Factor”) and other qualitative adjustments related to commercial and industrial loans increased $7.9 million, primarily due to an increase in the model overlay for the downside scenario, which is further discussed below. Modeled expected credit losses decreased $6.0 million, in part due to improvements in certain macroeconomic variables that influence projected loss expectations. Specific allocations for commercial and industrial loans evaluated for expected credit losses on an individual basis decreased $8.9 million from $16.6 million at December 31, 2025 to $7.7 million at June 30, 2026, primarily due to loan repayments and charge-offs totaling $2.0 million, partially offset by new specific allocations on newly assessed loans. The allowance allocated to energy loans totaled $9.4 million, or 0.83% of total energy loans, at June 30, 2026 decreasing $2.2 million, or 18.6%, compared to $11.6 million, or 1.06% of total energy loans, at December 31, 2025. The decrease was primarily related to decreases in modeled expected credit losses and the credit concentrations overlay. The allowance allocated to commercial real estate loans totaled $142.5 million, or 1.30% of total commercial real estate loans, at June 30, 2026, increasing $7.4 million, or 5.5%, compared to $135.1 million, or 1.31% of total commercial real estate loans, at December 31, 2025. The increase was primarily related to a $6.7 million increase in model overlays and a $1.4 million increase in specific allocations. These increases were partly offset by a $687 thousand decrease in modeled expected credit losses. 61 Table of Contents Additional information related to the allowance allocated to commercial real estate loans at June 30, 2026 and December 31, 2025 is included in the following table: Owner Occupied Non-owner Occupied Construction and Land Total June 30, 2026 Modeled expected credit losses $ 11,321 $ 3,736 $ 1,274 $ 16,331 Q-Factor and other qualitative adjustments 32,607 50,041 40,891 123,539 Specific allocations 722 — 1,913 2,635 Total $ 44,650 $ 53,777 $ 44,078 $ 142,505 Total loans $ 4,297,680 $ 3,970,141 $ 2,720,755 $ 10,988,576 Ratio of allowance to loans in each category 1.04 % 1.35 % 1.62 % 1.30 % December 31, 2025 Modeled expected credit losses $ 11,635 $ 4,130 $ 1,253 $ 17,018 Q-Factor and other qualitative adjustments 29,169 47,924 39,764 116,857 Specific allocations 722 — 513 1,235 Total $ 41,526 $ 52,054 $ 41,530 $ 135,110 Total loans $ 3,987,913 $ 3,773,028 $ 2,549,869 $ 10,310,810 Ratio of allowance to loans in each category 1.04 % 1.38 % 1.63 % 1.31 % The allowance allocated to consumer real estate loans totaled $29.1 million, or 0.72% of total consumer real estate loans, at June 30, 2026, increasing $3.5 million, or 13.7%, compared to $25.6 million, or 0.69% of total consumer real estate loans, at December 31, 2025. The increase was primarily related to a $2.1 million increase in Q-factor and other qualitative adjustments that was primarily attributable to the establishment of a model overlay for second-lien revolving lines of credit. The increase was also partly related to new specific allocations totaling $791 thousand for consumer real estate loans evaluated for expected credit losses on an individual basis and a $603 thousand increase in modeled expected credit losses, which was partly related to growth in the portfolio. The allowance allocated to consumer loans totaled $11.2 million, or 2.45% of total consumer loans, at June 30, 2026, increasing $488 thousand, or 4.5%, compared to $10.7 million, or 2.33% of total consumer loans, at December 31, 2025. The increase was primarily related to an $856 thousand increase in modeled expected credit losses partly offset by a $368 thousand decrease in Q-factor and other qualitative adjustments, primarily related to the consumer overlay. As more fully described in our 2025 Form 10-K, we measure expected credit losses over the expected life of each loan using a combination of models that estimate probability of default and loss given default, among other factors. The measurement of expected credit losses is impacted by loan- and borrower-specific attributes, as well as certain macroeconomic variables. Models are adjusted to reflect the current macroeconomic conditions and expected changes over a reasonable and supportable forecast period. In estimating expected credit losses as of June 30, 2026, we utilized the Moody’s Analytics June 2026 Baseline Scenario (the “June 2026 Baseline Scenario”) to forecast the macroeconomic variables used in our models. The June 2026 Baseline Scenario was based on the most likely outcome based on prevailing economic conditions and Moody's forecast of the U.S. economy. The June 2026 Baseline Scenario projections included, among other things, (i) U.S. Real Gross Domestic Product average annualized quarterly growth rates of 1.93% during the remainder of 2026 and 1.92% through the end of the forecast period in the second quarter of 2028; (ii) average annualized U.S. unemployment rates of 4.43% during the remainder of 2026 and 4.56% through the end of the forecast period in the second quarter of 2028; (iii) average annualized Texas unemployment rate of 4.27% during the remainder of 2026 and 4.25% through the end of the forecast period in the second quarter of 2028; (iv) projected average 10 year Treasury rate of 4.39% during the remainder of 2026 and 4.36% through the end of the forecast period in the second quarter of 2028; and (v) average oil price of $84.20 per barrel during the remainder of 2026 and $71.15 per barrel through the end of the forecast period in the second quarter of 2028. In estimating expected credit losses as of December 31, 2025, we utilized the Moody’s Analytics December 2025 Baseline Scenario (the “December 2025 Baseline Scenario”) to forecast the macroeconomic variables used in our models. The December 2025 Baseline Scenario was based on the most likely outcome based on prevailing economic conditions and Moody's forecast of the U.S. economy. The December 2025 Baseline Scenario projections included, among other things, (i) U.S. Real Gross Domestic Product average annualized quarterly growth rates of 2.16% in 2026 and 1.83% in 2027; (ii) average annualized U.S. unemployment rates of 4.67% during both 2026 and 2027; (iii) average annualized Texas unemployment rate of 4.36% during 2026 and 4.37% during 2027; (iv) projected average 10 year Treasury rate of 4.23% during 2026 and 4.31% during 2027; and (v) average oil price of $61.09 per barrel during 2026 and $62.90 per barrel during 2027. 62 Table of Contents The overall loan portfolio at June 30, 2026 increased $1.1 billion, or 5.0%, compared to December 31, 2025. The increase reflected growth across most portfolios, including a $677.8 million, or 6.6%, increase in commercial real estate loans; a $351.3 million, or 9.4%, increase in consumer real estate loans; a $39.0 million, or 3.6%, increase in energy loans; and an $18.7 million, or 0.3%, increase in commercial and industrial loans. These increases were partially offset by a $2.9 million, or 0.6%, decrease in consumer and other loans. The weighted average risk grade for commercial and industrial loans increased slightly to 6.47 at June 30, 2026, from 6.44 at December 31, 2025. The increase was primarily attributable to a higher weighted-average risk grade of pass-grade commercial and industrial loans, which increased to 6.17 at June 30, 2026 from 6.06 at December 31, 2025. This deterioration was partially offset by the effect of a $56.9 million decrease in classified commercial and industrial loans (risk grades of 11, 12 or 13). The weighted-average risk grade for energy loans decreased slightly to 6.12 at June 30, 2026, compared to 6.16 at December 31, 2025. The improvement primarily reflected a decline in the weighted-average risk grade of pass-grade energy loans to 5.82 at June 30, 2026 from 5.86 at December 31, 2025 and, to a lesser extent, a $1.6 million reduction in classified energy loans. These favorable trends were partially offset by the effect of a $5.0 million increase in energy loans graded as “watch” (risk grade 9) and “special mention” (risk grade 10). The weighted average risk grade for commercial real estate loans remained unchanged at 7.29 at both June 30, 2026 and December 31, 2025. While the weighted-average risk grade of pass-grade commercial real estate loans increased slightly to 7.07 at June 30, 2026 from 7.05 at December 31, 2025, this was offset by the effect of a higher proportion of commercial real estate loans graded as “pass” relative to the proportion of commercial real estate loans in higher risk grades. As discussed above, our credit loss models utilized the Moody's Analytics June 2026 Baseline Scenario to estimate expected credit losses as of June 30, 2026 and utilized the Moody’s Analytics December 2025 Baseline Scenario to estimate expected credit losses as of December 31, 2025. Model results were then qualitatively adjusted to reflect certain risk factors that are not captured within the modeling processes but are nonetheless relevant in assessing expected credit losses across our loan portfolios. These qualitative factor, or Q‑Factor, adjustments are discussed below. Q‑Factor adjustments are based on management’s judgment and current assessment of risks related to, among other factors, changes in lending policies and procedures; economic and business conditions; loan portfolio composition and credit concentrations; and other external factors not already reflected in the modeling inputs, assumptions, or methodologies. Management evaluates the potential impact of these factors across a range of outcomes and applies an aggregate adjustment percentage to the modeled expected credit losses based on this assessment. As of June 30, 2026, modeled expected credit losses were increased by a weighted-average Q-Factor adjustment of approximately 3.3%, resulting in a $3.3 million total adjustment, compared to approximately 3.0% at December 31, 2025, which resulted in a $3.2 million total adjustment. In addition, as of June 30, 2026, management applied other qualitative adjustments, or management overlays, to address risks impacting certain categories of the loan portfolio that management believes are not fully reflected in the modeled results. Q‑Factor and other qualitative adjustments as of June 30, 2026 are presented in the table below. Q-Factor Adjustments Commercial Real Estate Model Overlays Office Building Overlays Downside Scenario Overlay Credit Concentration Overlays Consumer Real Estate Overlay Consumer Overlay Total Commercial and industrial $ 1,755 $ — $ — $ 23,661 $ 8,176 $ — $ — $ 33,592 Energy 177 — — — 2,642 — — 2,819 Commercial real estate: — Owner occupied 466 31,189 — — 952 — — 32,607 Non-owner occupied 168 35,798 12,946 — 1,129 — — 50,041 Construction and land 60 39,477 663 — 691 — — 40,891 Consumer real estate 625 — — — — 2,100 — 2,725 Consumer and other 57 — — — — — 4,925 4,982 Total $ 3,308 $ 106,464 $ 13,609 $ 23,661 $ 13,590 $ 2,100 $ 4,925 $ 167,657 Commercial real estate model overlays are qualitative adjustments designed to address risks not captured within our commercial real estate credit loss models. These adjustments are established based on minimum reserve ratios for our commercial real estate loan portfolios. For our commercial real estate - owner occupied loan portfolio, management determined that a minimum reserve ratio was appropriate to address the model’s oversensitivity to favorable changes in certain economic variables. Based on internal analysis and benchmarking against peer bank data, the modeled results are considered overly optimistic and do not appropriately capture downside risk. Accordingly, management determined that the forecasted loss rate for the owner‑occupied commercial real estate loan portfolio should more closely align with that of the commercial and industrial loan portfolio. For the commercial real estate - non‑owner occupied and construction and land loan portfolios, 63 Table of Contents minimum reserve ratios were determined to be appropriate because the modeled results do not appropriately capture downside risk related to borrowers’ ability to access capital markets for the sale or refinancing of investor real estate and assets under construction. Management believes access to capital may remain impaired for an extended period, which could require borrowers to rely on secondary sources of liquidity and capital to support completed projects that could take longer to stabilize than originally underwritten. In addition, most non‑owner‑occupied and construction loans are originated with floating interest rates. These borrowers have been adversely impacted by the recent cycle of rising interest rates, as declines in short‑term rates have occurred at a slower pace. Longer‑term interest rates have increased as investors demand higher term and risk premiums at the long end of the yield curve. Office building overlays are additional qualitative adjustments to our commercial real estate models designed to address longer-term concerns regarding the utilization of commercial office space that may adversely impact the long-term performance of certain office properties within our commercial real estate loan portfolio. These adjustments are established based on minimum reserve ratios applied to loans within our commercial real estate - non-owner occupied and construction and land loan portfolios that have risk grades of 8 or worse. Loans of these risk grades were targeted for the overlays as they represent elevated credit risk and are more susceptible to adverse changes in property performance, collateral values, and capital market conditions, and therefore warrant additional qualitative consideration beyond modeled results. The downside scenario overlay is a qualitative adjustment applied to the commercial and industrial loan portfolio to address the risk of an economic downturn resulting from factors such as inflation; tariffs and other protectionist trade policies; rising interest rates; labor shortages; disruption in financial markets and global supply chains; continued oil price volatility; and the current or anticipated impacts of global wars or military conflicts, terrorism, and other geopolitical events. These factors are outside of management’s control but may adversely affect customer income levels and could alter anticipated customer behavior, including borrowing, repayment, investment, and deposit practices. To determine this qualitative adjustment, management utilizes an alternative, more pessimistic economic scenario to forecast the macroeconomic variables used in the credit loss models. As of June 30, 2026, the Moody’s Analytics S3 Alternative Scenario Downside - 90th Percentile was used. In modeling expected credit losses under this scenario, management also assumes that each non‑classified loan within the modeled loan pools is downgraded by one risk grade. The resulting qualitative adjustment is based on the amount by which expected credit losses under the alternative scenario exceed those estimated using the primary scenario, adjusted based on management’s assessment of the probability that this downside economic scenario will occur. Credit concentration overlays are qualitative adjustments based on statistical analysis designed to address relationship exposure concentrations within the loan portfolio. Changes in loan portfolio concentrations over time can cause expected credit losses within the current portfolio to differ from historical loss experience. Because the allowance for credit losses reflects expected credit losses within the loan portfolio and such losses are uncertain as to their nature, timing, and amount, management believes that portfolio segments with higher concentration risk are more susceptible to the occurrence of a significant loss event. Accordingly, given the concentration of a significant portion of the loan portfolio in large credit relationships and the experience of large, concentrated credit losses in recent years, management applied the qualitative adjustments presented in the table above to address the increased risk associated with the potential deterioration of a large credit relationship into a loss event. The consumer real estate model overlay is a qualitative adjustment designed to address management’s assessment that expected credit losses related to second-lien revolving lines of credit within our consumer real estate portfolio are underpredicted based on an analysis of historical loss trends. Specifically, management observed that both recent and longer‑term loss experience for second‑lien revolving lines of credit within the consumer real estate portfolio has exceeded modeled expectations, particularly during periods of economic stress. This indicates that the models may not fully capture loss sensitivity under adverse economic conditions. Accordingly, management applied a qualitative overlay to increase expected credit losses to a level more consistent with observed historical loss performance and current portfolio risk characteristics for second‑lien revolving lines of credit within the consumer real estate portfolio. The consumer overlay is a qualitative adjustment applied to the consumer and other loan portfolio to address risks associated with the level of unsecured loans within the portfolio, as well as other risk factors. Unsecured consumer loans present an elevated risk of loss during periods of economic stress, as these loans lack a secondary source of repayment in the form of hard collateral. This overlay was determined based on management’s analysis of historical charge‑off trends within the consumer loan portfolio, as well as charge‑off trends observed across the broader banking industry. Based on this analysis, management determined it was appropriate to apply an additional qualitative overlay to the modeled expected credit losses for the unsecured consumer loan portfolio. 64 Table of Contents As of December 31, 2025, we provided qualitative adjustments, as detailed in the table below. Further information regarding these qualitative adjustments is provided in our 2025 Form 10-K. Q-Factor Adjustment Model Overlays Office Building Overlays Downside Scenario Overlay Credit Concentration Overlays Consumer Overlay Total Commercial and industrial $ 1,684 $ — $ — $ 15,986 $ 8,036 $ — $ 25,706 Energy 216 — — — 3,432 — 3,648 Commercial real estate: Owner occupied 410 27,834 — — 925 — 29,169 Non-owner occupied 165 33,435 13,451 — 873 — 47,924 Construction 50 36,945 2,273 — 496 — 39,764 Consumer real estate 610 — — — — — 610 Consumer and other 57 — — — — 5,293 5,350 Total $ 3,192 $ 98,214 $ 15,724 $ 15,986 $ 13,762 $ 5,293 $ 152,171 Additional information related to credit loss expense and net (charge-offs) recoveries is presented in the tables below. Also see Note 3 - Loans in the accompanying notes to consolidated financial statements included elsewhere in this report. Credit Loss Expense (Benefit) Net (Charge-Offs) Recoveries Average Loans Ratio of Annualized Net (Charge-Offs) Recoveries to Average Loans Three months ended: June 30, 2026 Commercial and industrial $ (5,668) $ (1,800) $ 6,359,573 (0.11) % Energy (1,748) 73 1,114,986 0.03 Commercial real estate: Owner occupied 3,629 (2,049) 4,245,384 (0.19) Non-owner occupied 1,780 3 3,903,898 — Construction and land 1,154 (54) 2,567,276 (0.01) Consumer real estate 3,628 (1,876) 3,968,582 (0.19) Consumer and other 4,249 (3,824) 461,854 (3.32) Total $ 7,024 $ (9,527) $ 22,621,553 (0.17) June 30, 2025 Commercial and industrial $ 4,315 $ (3,138) $ 6,097,605 (0.21) % Energy (47) 180 1,220,765 0.06 Commercial real estate: Owner occupied 3,124 (3) 3,803,342 — Non-owner occupied 2,998 (2,634) 3,677,229 (0.29) Construction and land (5,739) — 2,561,145 — Consumer real estate 3,821 (1,038) 3,265,737 (0.13) Consumer and other 4,994 (4,518) 436,729 (4.15) Total $ 13,466 $ (11,151) $ 21,062,552 (0.21) 65 Table of Contents Credit Loss Expense (Benefit) Net (Charge-Offs) Recoveries Average Loans Ratio of Annualized Net (Charge-Offs) Recoveries to Average Loans Six months ended: June 30, 2026 Commercial and industrial $ (3,189) $ (3,830) $ 6,307,342 (0.12) % Energy (2,497) 341 1,111,417 0.06 Commercial real estate: Owner occupied 5,173 (2,049) 4,192,517 (0.10) Non-owner occupied 1,715 8 3,866,789 — Construction and land 2,602 (54) 2,496,265 — Consumer real estate 6,340 (2,831) 3,884,573 (0.15) Consumer and other 7,341 (6,853) 458,943 (3.01) Total $ 17,485 $ (15,268) $ 22,317,846 (0.14) June 30, 2025 Commercial and industrial $ 14,496 $ (6,581) $ 6,080,350 (0.22) % Energy (85) 482 1,180,740 0.08 Commercial real estate: Owner occupied 2,897 (3) 3,809,760 — Non-owner occupied 5,355 (4,632) 3,699,306 (0.25) Construction and land (5,899) — 2,510,351 — Consumer real estate 4,250 (1,649) 3,209,483 (0.10) Consumer and other 7,480 (8,459) 436,277 (3.91) Total $ 28,494 $ (20,842) $ 20,926,267 (0.20) We recorded a net credit loss expense related to loans of $17.5 million for the six months ended June 30, 2026, compared to $28.5 million during the same period in 2025. Net credit loss expense or benefit for each portfolio segment represents the amount required to adjust the allowance for credit losses allocated to that segment to the level of expected credit losses determined under our allowance methodology, after giving effect to net charge‑offs. Net credit loss expense for the first six months of 2026 primarily reflected (i) growth in commercial real estate loans, which resulted in higher model overlays; (ii) an increase in expected credit losses associated with consumer real estate loans, largely related to the new model overlay discussed above; (iii) an increase in specific allocations for commercial real estate construction and land loans and consumer real estate loans; and (iv) net charge‑offs related to consumer and other loans (primarily overdrafts), commercial and industrial loans, consumer real estate loans, and commercial real estate - owner occupied loans. The ratio of the allowance for credit losses on loans to total loans was 1.23% at June 30, 2026 compared to 1.29% at December 31, 2025. Management believes the allowance for credit losses on loans is appropriate based on management’s best estimate of expected credit losses within the existing loan portfolio. Changes in the factors considered by management in estimating expected credit losses could result in changes to the allowance for credit losses and future credit loss expense. Allowance for Credit Losses - Off-Balance-Sheet Credit Exposures. The allowance for credit losses on off-balance-sheet credit exposures totaled $50.3 million at June 30, 2026, compared to $51.3 million at December 31, 2025. The level of the allowance for credit losses on off-balance-sheet credit exposures is impacted by the volume of outstanding commitments, underlying risk grades, expected utilization of available commitments, and forecasted economic conditions impacting the loan portfolio. We recognized a net credit loss benefit related to off-balance-sheet credit exposures of $973 thousand during the six months ended June 30, 2026, compared to a net credit loss benefit of $2.3 million during the same period in 2025. Our policies and methodology used to estimate the allowance for credit losses on off-balance-sheet credit exposures are further described in our 2025 Form 10-K. 66 Table of Contents Capital and Liquidity Capital. Shareholders’ equity totaled $4.6 billion at both June 30, 2026 and December 31, 2025. Sources of capital during the six months ended June 30, 2026 included net income of $343.0 million and $10.6 million related to stock-based compensation. Uses of capital during the six months ended June 30, 2026 included $163.2 million of treasury stock purchases, $132.1 million of dividends paid on preferred and common stock, and other comprehensive loss, net of tax, of $8.7 million. The accumulated other comprehensive income/loss component of shareholders’ equity totaled a net, after-tax, unrealized loss of $851.7 million at June 30, 2026, compared to a net, after-tax, unrealized loss of $843.0 million at December 31, 2025. The increase in the net, after-tax, unrealized loss was primarily due to a $9.0 million net, after-tax, decrease in the fair value of securities available for sale. Under the Basel III Capital Rules, we have elected to opt-out of the requirement to include most components of accumulated other comprehensive income/loss in regulatory capital. Accordingly, amounts reported as accumulated other comprehensive income/loss do not increase or reduce regulatory capital and are excluded from the calculation of our regulatory capital ratios. Bank regulatory agencies utilize capital guidelines designed to measure capital and take into consideration the risk inherent in both on-balance-sheet and off-balance-sheet exposures. See Note 6 - Capital and Regulatory Matters in the accompanying notes to consolidated financial statements included elsewhere in this report. Details of dividends declared and paid are presented in the table below. Our ability to declare or pay dividends on, or purchase, redeem or otherwise acquire, shares of our capital stock may be impacted by certain restrictions described in Note 6 - Capital and Regulatory Matters in the accompanying notes to consolidated financial statements included elsewhere in this report. 2026 2025 Dividends Per Share Dividend Payout Ratio Dividends Per Share Dividend Payout Ratio 1st quarter $ 1.00 37.8 % $ 0.95 41.3 % 2nd quarter 1.03 38.0 1.00 41.8 Year-to-date $ 2.03 37.9 $ 1.95 41.6 On March 19, 2026, U.S. bank regulatory agencies jointly issued a Notice of Proposed Rulemaking (“NPR”) that would revise certain elements of the regulatory capital framework applicable to standardized‑approach banking organizations, including Cullen/Frost and Frost Bank. The proposal, which was open for public comment through June 18, 2026, is intended to enhance risk sensitivity while maintaining overall framework simplicity. Key provisions would revise risk weights for corporate and retail loans, introduce more granular loan‑to‑value‑based risk weights for residential mortgages, replace the deduction of mortgage servicing assets with a 250% risk weight, and refine methodologies for calculating exposure amounts and risk‑weighted assets related to counterparty credit risk, securitizations, and synthetic risk transfer transactions, including adjustments to the recognition of credit risk mitigants. We are currently evaluating the potential effects of the proposal on our regulatory capital ratios, capital planning processes, and risk‑weighted assets; however, because the NPR has not been finalized and may change as a result of comments received, the ultimate impact cannot yet be determined. Based on our preliminary assessment, the proposed recalibration of risk weights for corporate, retail, and residential mortgage exposures would be expected to modestly reduce our total risk‑weighted assets. Management will continue to monitor regulatory developments and assess implications for our capital structure, capital planning, and business strategy. Stock Repurchase Plans. From time to time, our board of directors has authorized stock repurchase plans. In general, stock repurchase plans allow us to proactively manage our capital levels and provide management with the flexibility to repurchase shares of our common stock opportunistically when management believes the market price undervalues our company. Such plans also provide us with the ability to repurchase shares of common stock to be used to satisfy obligations related to stock compensation awards and thereby mitigate the dilutive effect of such awards. For additional details, see Note 6 - Capital and Regulatory Matters in the accompanying notes to consolidated financial statements and Part II, Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds, each included elsewhere in this report. Liquidity. As more fully discussed in our 2025 Form 10-K, our liquidity position is continuously monitored, and adjustments are made to the balance between sources and uses of funds as deemed appropriate. Liquidity risk management is an important element in our asset/liability management process. We regularly model liquidity stress scenarios to assess potential liquidity outflows or funding pressures resulting from economic disruptions, volatility in the financial markets, unexpected credit events or other significant occurrences deemed problematic by management. These scenarios are incorporated into our contingency funding plan, which provides the basis for the identification of our liquidity requirements. Our principal source of funding has been customer deposits, supplemented by short-term and long-term borrowings as well as maturities of securities and loan amortization. As of June 30, 2026, we had approximately $5.7 billion held in an interest-bearing account at the Federal Reserve. We also have the ability to borrow funds as a member of the FHLB. As of June 30, 2026, based upon available, pledgeable 67 Table of Contents collateral, our total borrowing capacity with the FHLB was approximately $7.3 billion. Furthermore, at June 30, 2026, we had approximately $12.2 billion in securities that were available to pledge and could be used to support additional borrowings, as needed, through repurchase agreements or the Federal Reserve discount window. As of June 30, 2026, management is not aware of any events that have occurred that are reasonably likely to have a material adverse effect on our liquidity, capital resources or operations. In addition, management is not aware of any regulatory recommendations regarding liquidity that would have a material adverse effect on us on a consolidated basis. Since Cullen/Frost is a holding company and does not conduct operations, its primary sources of liquidity are dividends received from Frost Bank and borrowings from outside sources. Banking regulations may limit the amount of dividends that may be paid by Frost Bank. See Note 6 - Capital and Regulatory Matters in the accompanying notes to consolidated financial statements included elsewhere in this report regarding such dividends. At June 30, 2026, Cullen/Frost had liquid assets, primarily consisting of cash on deposit at Frost Bank, totaling $232.6 million. Accounting Standards Updates See Note 16 - Accounting Standards Updates in the accompanying notes to consolidated financial statements included elsewhere in this report for details of recently issued accounting pronouncements and their expected impact on our financial statements. 68 Table of Contents