Cullen/Frost Bankers, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income available to common shareholders was $178.5 million for the third quarter of 2026, an increase from $172.7 million in the same period of 2025.
• Earnings per diluted common share were $2.84 for the third quarter of 2026, compared to $2.67 in the third quarter of 2025.
• Return on average assets was 1.31 percent for the third quarter of 2026, down from 1.32 percent in the prior year period.
• Return on average common equity was 16.16 percent for the third quarter of 2026, down from 16.72 percent in the prior year period.
• Net interest income on a taxable-equivalent basis was $490.8 million for the third quarter of 2026, up 5.8 percent from $463.7 million in the third quarter of 2025.
• Net interest margin was 3.78 percent for the third quarter of 2026, compared to 3.69 percent in the third quarter of 2025.
• Non-interest income totaled $136.0 million for the third quarter of 2026, an 8.2 percent increase from $125.6 million in the third quarter of 2025.
• Trust and investment management fees increased 10.3 percent year-over-year to $49.5 million.
• Other non-interest income increased 54.5 percent year-over-year, primarily driven by $7.6 million in gains on the sale of excess bank properties.
• Non-interest expense was $377.2 million for the third quarter of 2026, up 7.0 percent from $352.5 million in the third quarter of 2025.
• Salaries and wages expense increased 7.7 percent year-over-year to $182.2 million.
• Technology, furniture, and equipment expense increased 6.1 percent year-over-year to $46.1 million, driven by cloud services and software maintenance.
• Credit loss expense was $12.1 million for the third quarter of 2026, compared to $6.8 million in the third quarter of 2025.
• Net charge-offs were $8.4 million for the third quarter of 2026, compared to $6.6 million in the third quarter of 2025.
• The allowance for credit losses on loans as a percentage of total loans was 1.23 percent at September 30, 2026, down from 1.31 percent at September 30, 2025.
• Non-accrual loans were $63.7 million at September 30, 2026, compared to $44.8 million at September 30, 2025.
• For the first nine months of 2026, net income available to common shareholders was $518.2 million, up 8.6 percent from $477.3 million in the first nine months of 2025.
• Earnings per diluted common share for the first nine months of 2026 were $8.19, up 11.3 percent from $7.36 in the prior year period.

Guidance and Future Outlook:

• No specific forward-looking financial guidance or quantitative future outlook metrics were provided in the press release.
• Management highlighted the opportunity to extend the Frost experience to new Texans due to population migration into the state.
• The company expressed confidence in continuing its organic growth strategy and executing against competition.

Business Segments and Product Lines:

• Average loans increased 9.0 percent year-over-year to $23.4 billion for the third quarter of 2026.
• Average deposits increased 3.6 percent year-over-year to $43.6 billion for the third quarter of 2026.
• The overall banking customer base grew at a five percent yearly rate during the third quarter.
• Wealth Management managed customer accounts grew by more than five percent compared to the prior year.
• Frost Insurance Agency increased commercial customers by over ten percent compared to the third quarter of 2025.
• The company serves customers across Texas regions including Austin, Dallas, Fort Worth, Gulf Coast, Houston, Permian Basin, and San Antonio.

Market and Competitive Landscape:

• The company competes against both "competitors old and new" in its markets.
• Management noted the impact of population migration into Texas as a key market driver.
• The company is one of the 50 largest U.S. banks with $54.5 billion in assets at September 30, 2026.

Risks and Challenges:

• Risks include changes in trade and monetary policies, inflation, interest rate fluctuations, and economic conditions affecting borrowers.
• Specific risks mentioned include geopolitical tensions, armed conflicts, and disruptions to energy markets and shipping routes.
• Risks related to trade policy uncertainty, including tariffs and protectionist policies, affecting customer cash flows and supply chains.
• Operational risks include cyber incidents, technology failures, and the cost of integrating new products.
• Regulatory risks involve changes in laws, accounting policies, and the results of regulatory examinations.
• Credit risks include changes in the mix of loan geographies, sectors, and the level of non-performing assets.

Management Commentary and Tone:

• Phil Green, Chairman and CEO, stated the company continued its "outstanding execution of our organic growth strategy."
• Management expressed confidence in the "great opportunity" presented by new Texans moving to the state.
• CEO Phil Green recognized the "outstanding focus and execution of our employees" in competing and winning against competitors.

Other Key Points:

• The Board declared a fourth-quarter cash dividend of $1.03 per common share, payable December 15, 2026.
• The Board declared a cash dividend of $11.125 per share of Series B Preferred Stock, payable December 15, 2026.
• The company repurchased 92,700 common shares for a total cost of $15.0 million during the third quarter of 2026.
• As of the end of the third quarter, $125.0 million remained under the $300 million stock repurchase authorization, which expires in January 2027.
• Common Equity Tier 1, Tier 1, and Total Risk-Based Capital Ratios were 13.76 percent, 14.18 percent, and 15.50 percent, respectively, at the end of the third quarter of 2026.
• Total households, including consumer and commercial customers, grew by 5.4 percent from September 2025 to September 2026.
• The company recognized $7.5 million in losses on sales of securities during the third quarter.
• A conference call to discuss results was scheduled for October 29, 2026, at 1 p.m. Central Time.