Cullen/Frost Q3 profit rises to $2.84 a share as loans grow 9%

Cullen/Frost Bankers said Thursday that third-quarter profit rose to $2.84 per diluted common share, up from $2.67 a year earlier, as the Texas lender reported what its chief executive called "accelerating growth" in average loans and deposits.

Net income available to common shareholders came to $178.5 million for the quarter, compared with $172.7 million in the third quarter of 2025, according to the earnings release the San Antonio-based company filed with an 8-K on Thursday. The board also declared a fourth-quarter dividend of $1.03 per common share.

Loans and deposits keep climbing

Average loans rose $1.9 billion, or 9.0%, from a year earlier to $23.4 billion, and were up 3.3% from the second quarter. Average deposits increased 3.6% year over year to $43.6 billion, and rose 2.3% from the prior quarter.

Taxable-equivalent net interest income grew 5.8% to $490.8 million. Net interest margin widened to 3.78%, from 3.69% a year earlier and 3.75% in the second quarter, the company said.

"As more and more people and businesses continue to move into Texas from other parts of the country, we see great opportunity to continue extending the Frost experience to more new Texans," Chairman and CEO Phil Green said in the release. The company said its overall base of customer households grew 5.4% from September 2025 to September 2026.

Fees up, costs up

Non-interest income rose 8.2% to $136.0 million. That included $7.6 million of gains on the sale of excess bank properties. The company also recognized $7.5 million in losses on sales of securities during the quarter. Trust and investment management fees climbed 10.3%.

Non-interest expense rose 7.0% to $377.2 million, with salaries and wages up 7.7%. The company tied the wage increase to annual merit and market raises and to hiring linked in part to its organic expansion across markets. Advertising and promotions expense rose $6.4 million.

Credit and capital

Credit loss expense was $12.1 million, compared with $9.8 million in the second quarter and $6.8 million a year earlier. Net charge-offs were $8.4 million. Non-accrual loans fell to $63.7 million at the end of September from $112.7 million at the end of June, though they were above the $44.8 million reported a year earlier.

The company repurchased 92,700 shares for $15.0 million during the quarter and had $125.0 million left under its $300 million authorization, which expires in January 2027. Its Common Equity Tier 1 ratio stood at 13.76%.

By the numbers

• Diluted EPS: $2.84, versus $2.67 a year earlier
• Net income to common: $178.5 million
• Net interest margin: 3.78%
• Average loans: $23.4 billion, up 9.0%
• Average deposits: $43.6 billion, up 3.6%
• Quarterly dividend: $1.03 per common share, payable Dec. 15

For the first nine months of 2026, earnings per share rose 11.3% to $8.19, the company said. Total assets were $54.5 billion at Sept. 30.

Sources

1. Cullen/Frost Bankers Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0000039263-26-000053)

This article is for informational and educational purposes only and is not investment advice. It is not a recommendation to buy or sell any security.

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