CFR Filings — Cullen/frost Bankers, Inc. - FilingSpy
CFR
Cullen/frost Bankers, Inc.
A Texas-focused bank holding company, Cullen/Frost operates Frost Bank's roughly two hundred financial centers across the state, offering commercial and consumer banking, treasury management, and wealth services through Frost Wealth Advisors to customers in energy, healthcare, and manufacturing. It traces back to 1868, when Thomas Claiborne Frost started a frontier mercantile store in San Antonio that evolved into a bank; the holding company formed in 1977 by merging Frost's organization with Cullen Bankers. Fun fact: Frost first lent to local wool producers using their stored wool as collateral.
Net income rose 9.6% as deposit costs fell, but non-accrual loans more than doubled to $110.2 million.
Earnings continued to climb as falling deposit costs expanded the for a fifth straight quarter. rose 5.3% to $576.0 million and increased 13.0% to $2.70, driven by a 4.3% increase in and a 9.4% rise in non-interest income. The quarter also brought a sharp increase in , concentrated in commercial real estate construction and land, which raises the stakes for credit quality in the second half of the year.
Key takeaways
rose 9.6% to $172.1 million, as a $19.5 million increase in and an $11.0 million increase in non-interest income more than offset a $14.6 million rise in non-.
The expanded for a fifth consecutive quarter, reaching 3.74% in Q1 2026, as the cost of interest-bearing liabilities continued to fall and average loans grew 7.4% to $22.0 billion.
Non-interest income rose 9.4% to $128.3 million, led by higher service charges on deposit accounts, trust and investment management fees, and interchange income.
Section summaries
Management's Discussion and Analysis
Net income rose 9.7% YoY to $170.4M in Q2 2026, driven by higher net interest income and non-interest income, partly offset by increased non-interest expense.
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grew $19.5M (4.3%) in Q2, as lower deposit and borrowing costs and higher loan volumes more than offset lower loan yields.
Non- growth decelerated to 4.2% , down from the 9% pace that persisted through most of 2025, though salaries, employee benefits, and technology costs continued to rise.
Credit loss expense fell to $9.8 million from $13.1 million a year ago, but rose to $110.2 million from $44.8 million at year-end 2025, driven by commercial real estate construction and land loans.
The on loans declined to 1.23% of total loans from 1.29% at year-end 2025, even as increased, and the balance sheet's continued to decline, with a 200-basis-point rate increase now projected to lift by 2.4%, down from 3.0% at year-end 2025.
What changed
The expansion flagged as a key watch item in Q1 2026 continued: the margin reached 3.74% in Q1 2026, up 14 , as deposit costs fell further.
Non- growth decelerated to 5.1% in Q1 2026 and 4.2% in Q2 2026, answering the question raised in prior quarters about whether the 9% pace would persist now that the FDIC assessment reversal is complete and Texas expansion staffing is in place.
Credit loss expense remained near the low end of the range seen in recent quarters at $9.8 million, but the sharp rise in to $110.2 million—more than double the year-end 2025 level—directly addresses the watch item on commercial real estate credit quality, and the increase is concentrated in the construction and land segments that represent a subset of the 47.1% commercial real estate portfolio.
The balance sheet's continued to decline, with a 200-basis-point rate increase now projecting a 2.4% benefit, down from 3.0% at year-end 2025 and 2.5% in Q1 2026, confirming the trajectory flagged in every recent filing.
The $300 million stock plan authorized for 2026 was noted but no material execution was reported in the quarter.
What to watch
Whether the $110.2 million in —concentrated in commercial real estate construction and land—results in charge-offs that require a rebuild of the , which declined to 1.23% of total loans from 1.29% at year-end 2025.
Whether the can continue expanding if the Federal Reserve cuts rates, given that has fallen to 2.4% for a 200-basis-point increase and loan yields are already declining.
Whether non- growth remains near the 4% level or re-accelerates, now that the deceleration from the 9% pace appears to be taking hold.
The pace and execution of the $300 million stock plan, and whether it offsets from equity-based compensation or meaningfully reduces the share count.
Non-interest income increased $11.0M (9.4%) in Q2, led by higher service charges on deposits, trust fees, and interchange income.
Non- rose $14.6M (4.2%) in Q2, primarily from higher salaries, employee benefits, and technology costs.
Credit loss expense decreased $3.4M to $9.8M in Q2; non-accrual loans increased to $110.2M, driven by commercial real estate construction and land loans.
Average loans grew $1.6B (7.4%) in Q2, while the on loans to total loans ratio declined to 1.23% from 1.29% at year-end 2025.
The company maintained strong liquidity with $5.7B at the Federal Reserve and $7.3B in FHLB borrowing capacity, and noted a proposed regulatory capital rule could modestly reduce .
We are subject to various claims and legal actions that have arisen in the course of conducting business. Management does not expect the ultimate disposition of these matters to have a material adverse impact on our financial statements.
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We are subject to various claims and legal actions that have arisen in the course of conducting business. Management does not expect the ultimate disposition of these matters to have a material adverse impact on our financial statements.