CULLEN/FROST REPORTS FOURTH QUARTER AND 2023 ANNUAL RESULTS

Rhea-AI Summary

Cullen/Frost Bankers, Inc. (NYSE:CFR) reported fourth-quarter and full-year results for 2023, with net income available to common shareholders for the fourth quarter of 2023 at $100.9 million, which was impacted by a one-time surcharge expense of $51.5 million. Excluding this, net income would have been $141.6 million, representing a 25.3% decrease compared to 2022. For the full year, net income available to common shareholders was $591.3 million, an increase of 3.3% compared to 2022. The company also declared a first-quarter dividend on common and preferred stock and authorized a $150 million stock repurchase program.

Positive

• Solid fourth-quarter and record 2023 earnings
• Annual net income available to common shareholders increased by 3.3% compared to 2022
• Declared a first-quarter dividend on common and preferred stock
• Authorized a $150 million stock repurchase program

Negative

• Net income for the fourth quarter decreased by 25.3% compared to 2022
• Net interest income on a taxable-equivalent basis decreased by 3.3% for the fourth quarter of 2023

Insights

Financial Analyst

The announcement by Cullen/Frost Bankers, Inc. of a dividend declaration and a new stock repurchase program represents a strategic utilization of capital that is likely to be closely scrutinized by investors and market analysts. The authorization to repurchase up to $150 million of common stock signals a confidence by the company's management in the intrinsic value of the stock, which could be interpreted as a positive indicator of the company's financial health and future prospects. Such buyback programs are often viewed favorably in the market as they can lead to earnings per share (EPS) accretion and indicate that the company believes its stock is undervalued.

However, the reported decrease in net income and EPS, excluding the one-time FDIC surcharge, compared to the previous year's fourth quarter, raises concerns about the company's growth trajectory and profitability. The 25.3 percent decrease in net income available to common shareholders, albeit influenced by a one-time surcharge, might prompt investors to delve deeper into the company's operational efficiency and cost management strategies. The decline in net interest income and the increase in non-interest expenses, even when excluding the one-time surcharge, are areas that warrant attention. The reported increase in loans and decrease in deposits could reflect changing market dynamics or strategic business decisions that may affect the company's liquidity and interest rate risk profile.

Market Research Analyst

From a market perspective, Cullen/Frost Bankers, Inc.'s performance and strategic decisions should be evaluated in the context of the broader banking sector and economic environment. The banking industry is sensitive to interest rate changes and the reported increase in net interest margin suggests an ability to manage interest rate risk effectively. However, the decrease in net interest income points to challenges in generating revenue from the core business of lending, which may be a result of competitive pressures or a shift in the loan portfolio mix.

The reported increase in non-interest income, particularly from customer derivative and foreign exchange transactions, indicates a diversification of revenue streams, which could be a strategic response to the low interest rate environment experienced in recent years. The organic expansion strategy in key Texas markets, as mentioned by the CEO, could be a long-term growth driver but also requires capital investment and carries execution risk. The decrease in deposits could be an area of concern as it may affect the bank's cost of funds and lending capacity.

Legal Expert

Regarding regulatory compliance, the Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios reported by Cullen/Frost Bankers, Inc. are above the Basel III regulatory requirements, which is a strong indicator of the bank's capital adequacy and resilience to potential financial stresses. Maintaining well-capitalized levels is crucial for regulatory compliance and for investor confidence, especially in an environment where regulatory scrutiny is high. The one-time surcharge expense related to FDIC insurance, while impacting the current financials, is a regulatory cost that banks must manage as part of their normal operations. It is important for stakeholders to consider the non-recurring nature of this expense when evaluating the company's performance.

Board declares first quarter dividend on common and preferred stock, and authorizes $150 million stock repurchase program

SAN ANTONIO, Jan. 25, 2024 /PRNewswire/ -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported fourth quarter and full-year results for 2023. Net income available to common shareholders for the fourth quarter of 2023 was $100.9 million, and was impacted by a $51.5 million ($40.7 million net of tax) one-time surcharge expense associated with FDIC insurance. Excluding this one-time item, net income available to common shareholders for the fourth quarter would have been approximately $141.6 million, representing a 25.3 percent decrease compared to the fourth quarter of 2022. On a per-share basis, the company reported net income available to common shareholders of $1.55 per diluted common share for the fourth quarter of 2023, compared to $2.91 per diluted common share for the fourth quarter of 2022. Excluding the after-tax impact of the FDIC surcharge in the fourth quarter, EPS would have been $2.18, representing a 25.1 percent decrease from the fourth quarter of 2022. For the fourth quarter of 2023, returns on average assets and average common equity were 0.82 percent and 13.51 percent, respectively, compared to 1.44 percent and 27.16 percent for the same period in 2022. Adjusted for the FDIC insurance surcharge, returns on assets and average common equity for the fourth quarter would have been approximately 1.14 percent and 18.96 percent.

The company also reported 2023 annual net income available to common shareholders of $591.3 million, an increase of 3.3 percent compared to 2022 earnings available to common shareholders of $572.5 million. Excluding the impact of the one-time FDIC surcharge, net income available to common shareholders for 2023 would have been approximately $632.0 million, representing a 10.4 percent increase compared to 2022. On a per-share basis, 2023 earnings were $9.10 per diluted common share compared to $8.81 per diluted common share reported in 2022. For the year 2023, returns on average assets and average common equity were 1.19 percent and 18.66 percent respectively, compared to 1.11 percent and 16.86 percent reported in 2022.

"Our solid fourth quarter and record 2023 earnings are a result of continued strong execution by Frost bankers throughout the state, and were aided by our continued success with our organic expansion strategy in key growth markets in Texas," said Phil Green, Cullen/Frost Chairman and CEO.

For the fourth quarter of 2023, net interest income on a taxable-equivalent basis was $409.9 million, down 3.3 percent compared to the same period in 2022. Average loans for the fourth quarter of 2023 increased $1.5 billion, or 9.1 percent, to $18.6 billion, from the $17.1 billion reported for the fourth quarter a year earlier, and increased 3.6 percent compared to the third quarter of 2023. Average deposits for the quarter decreased $3.6 billion, or 8.0 percent to $41.2 billion compared to $44.8 billion in last year's fourth quarter, and increased 0.9 percent compared to the third quarter of 2023.

For full year 2023, average total loans were $17.9 billion, an increase of approximately $1.2 billion, or 6.9 percent, from the $16.7 billion reported in 2022. Average total deposits for 2023 were $41.4 billion, down $3.1 billion, or 7.0 percent, compared to the $44.6 billion reported for full year 2022.

Noted financial data for the fourth quarter:

• The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios for Cullen/Frost at the end of the fourth quarter of 2023 were 13.25 percent, 13.73 percent, and 15.18 percent, respectively. Current capital ratios continue to be in excess of well-capitalized levels and exceed Basel III requirements.
  
  
• Net interest income on a tax-equivalent basis was $409.9 million for the fourth quarter of 2023, a decrease of 3.3 percent compared to the $423.9 million reported for the fourth quarter of 2022. The net interest margin was 3.41 percent for the fourth quarter of 2023 compared to 3.31 percent for the fourth quarter of 2022 and 3.44 percent for the third quarter of 2023.
  
  
• Non-interest income for the fourth quarter of 2023 was $113.8 million, up $8.1 million, or 7.6 percent, from the $105.7 million reported a year earlier. Other non-interest income increased $3.1 million, or 18.6 percent, compared to the fourth quarter of 2022. The increase was mainly driven by a $3.0 million increase in income from customer derivative and foreign exchange transactions. Other charges, commissions and fees increased $1.1 million, or 10.2 percent, compared to the fourth quarter of 2022. The increase was primarily related to an increase in income from the placement of money market accounts (up $642,000) and an increase in merchant services income (up $296,000). Service charges on deposit accounts increased by $2.2 million, or 9.9 percent, compared to the fourth quarter of 2022. The increase was driven by increases in overdraft fees and other service charges. Insurance commissions and fees increased by $1.1 million, or 9.2 percent, compared to the fourth quarter of 2022. The increase was mainly driven by increases in commission revenues.
  
  
• Non-interest expense for the fourth quarter of 2023 was $365.2 million, up $83.9 million, or 29.8 percent, compared to the $281.3 million reported for the fourth quarter of 2022. Excluding the one-time surcharge expense associated with FDIC insurance, non-interest expense for the fourth quarter of 2023 was $313.7 million, up $32.4 million, or 11.5 percent compared to the same quarter a year earlier. Salaries and wages expense increased by $9.9 million, or 7.3 percent, compared to the fourth quarter of 2022. The increase in salaries and wages was primarily related to an increases in employee headcount and an increase in salaries due to annual merit and market increases. The increase in the number of employees was partly related to our investments in organic expansion in the Houston, Dallas and Austin markets, as well as the rollout of our mortgage loan product offering, and was partially offset by a decrease in incentive compensation expenses. Employee benefits expense increased by $6.1 million, or 27.7 percent, compared with the fourth quarter of 2022. The increase in employee benefits expense was impacted by increases in headcount, medical benefits expense (up $2.1 million) and a decrease in the net periodic benefit related to our defined benefit retirement plan (down $1.6 million), among other things. Other non-interest expense increased by $8.0 million, or 13.6 percent, compared to the fourth quarter of 2022, impacted by increases in professional services expense (up $4.4 million), check card expense (up $1.0 million), and advertising and marketing expenses (up $904,000), among other things. Technology, furniture and equipment expense was up $3.6 million or 11.6 percent compared to the fourth quarter of 2022. The increase was primarily related to increases in cloud services expense (up $3.3 million).
  
  
• For the fourth quarter of 2023, the company reported a credit loss expense of $16.0 million and reported net charge-offs of $10.9 million, compared to a credit loss expense of $11.2 million and net charge-offs of $5.0 million for the third quarter of 2023. For the fourth quarter of 2022, the company reported a credit loss expense of $3.0 million and reported net charge-offs of $3.8 million. The allowance for credit losses on loans as a percentage of total loans was 1.31 percent at December 31, 2023, compared to 1.32 percent at September 30, 2023 and 1.33 percent at December 31, 2022. Non-accrual loans were $60.9 million at the end of 2023, compared to $67.2 million the previous quarter, and $37.8 million at year-end 2022.

The Cullen/Frost board declared a first-quarter cash dividend of $0.92 per common share, payable March 15, 2024 to shareholders of record on February 29 of this year. The board of directors also declared a cash dividend of $11.125 per share of Series B Preferred Stock (or $0.278125 per depositary share). The depositary shares representing the Series B Preferred Stock are traded on the NYSE under the symbol "CFR PrB." The Series B Preferred Stock dividend is payable on March 15, 2024, to shareholders of record on February 29 of this year.

In addition, the company's board of directors approved a new share repurchase program with authorization to purchase up to $150 million of Cullen/Frost common stock over a one-year period expiring on January 24, 2025. Share repurchases under the authorization may be made through a variety of methods, which may include open market purchases, in privately negotiated transactions, block trades, accelerated share repurchase transactions, and/or through other legally permissible means. The timing and amount of any share repurchases under the authorization will be determined by management at its discretion and based on market conditions and other considerations. The share repurchase program may be suspended or discontinued at any time at the company's discretion and does not obligate Cullen/Frost to purchase any amount of common stock.

Cullen/Frost Bankers, Inc. will host a conference call on Thursday, January 25, 2024, at 1:00 p.m. Central Time (CT) to discuss the results for the quarter and the year. The media and other interested parties are invited to access the call in a "listen only" mode at 877-709-8150. Playback of the conference call will be available after
5:00 p.m. CT on the day of the call until midnight Sunday, January 28 at 877-660-6853, with the Conference ID# of 13743292. A replay of the call will also be available by webcast at the URL listed below after 5:00 p.m. CT on the day of the call.

Cullen/Frost investor relations website: https://investor.frostbank.com/

Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding company, headquartered in San Antonio, with $50.8 billion in assets at December 31, 2023. One of the 50 largest U.S. banks, Frost provides a wide range of banking, investments and insurance services to businesses and individuals across Texas in the Austin, Corpus Christi, Dallas, Fort Worth, Houston, Permian Basin, Rio Grande Valley and San Antonio regions. Founded in 1868, Frost has helped clients with their financial needs during three centuries. Additional information is available at frostbank.com.

Forward-Looking Statements and Factors that Could Affect Future Results

Certain statements contained in this press release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the SEC, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of Cullen/Frost or its management or Board of Directors, including those relating to products, services or operations; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes", "anticipates", "expects", "intends", "targeted", "continue", "remain", "will", "should", "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

• The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board.
• Inflation, interest rate, securities market and monetary fluctuations.
• Local, regional, national and international economic conditions and the impact they may have on us and our customers and our assessment of that impact.
• Changes in the financial performance and/or condition of our borrowers.
• Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs.
• Changes in estimates of future credit loss reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.
• Changes in our liquidity position.
• Impairment of our goodwill or other intangible assets.
• The timely development and acceptance of new products and services and perceived overall value of these products and services by users.
• Changes in consumer spending, borrowing and saving habits.
• Greater than expected costs or difficulties related to the integration of new products and lines of business.
• Technological changes.
• The cost and effects of cyber incidents or other failures, interruptions or security breaches of our systems or those of our customers or third-party providers.
• Acquisitions and integration of acquired businesses.
• Changes in the reliability of our vendors, internal control systems or information systems.
• Our ability to increase market share and control expenses.
• Our ability to attract and retain qualified employees.
• Changes in our organization, compensation and benefit plans.
• The soundness of other financial institutions.
• Volatility and disruption in national and international financial and commodity markets.
• Changes in the competitive environment in our markets and among banking organizations and other financial service providers.
• Government intervention in the U.S. financial system.
• Political or economic instability.
• Acts of God or of war or terrorism.
• 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, financial markets and global supply chains may continue to be adversely affected by the current or anticipated impact of global wars/military conflicts, terrorism, or other geopolitical events.

Forward-looking statements speak only as of the date on which such statements are made. We do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

 

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
	2023								2022
	4th Qtr		3rd Qtr		2nd Qtr		1st Qtr		4th Qtr
CONDENSED INCOME STATEMENTS
Net interest income	$ 388,152		$ 385,426		$ 385,266		$ 399,820		$ 398,457
Net interest income (1)	409,904		407,353		408,594		425,844		423,892
Credit loss expense	15,981		11,185		9,901		9,104		3,000
Non-interest income:
Trust and investment management fees	40,163		37,616		39,392		36,144		39,695
Service charges on deposit accounts	24,535		23,603		23,487		21,879		22,321
Insurance commissions and fees	12,743		13,636		12,940		18,952		11,674
Interchange and card transaction fees	4,608		4,672		5,250		4,889		4,480
Other charges, commissions and fees	12,104		13,128		12,090		11,704		10,981
Net gain (loss) on securities transactions	—		12		33		21		—
Other	19,598		13,331		10,336		11,676		16,529
Total non-interest income	113,751		105,998		103,528		105,265		105,680
Non-interest expense:
Salaries and wages	146,616		137,562		133,195		130,345		136,697
Employee benefits	28,065		26,527		26,792		33,922		21,975
Net occupancy	30,752		31,581		31,714		30,349		28,572
Technology, furniture and equipment	34,484		35,278		33,043		32,481		30,912
Deposit insurance	58,109		6,033		6,202		6,245		3,967
Other	67,196		56,275		54,096		51,800		59,174
Total non-interest expense	365,222		293,256		285,042		285,142		281,297
Income before income taxes	120,700		186,983		193,851		210,839		219,840
Income taxes	18,149		31,332		31,733		33,186		28,666
Net income	102,551		155,651		162,118		177,653		191,174
Preferred stock dividends	1,669		1,668		1,669		1,669		1,669
Net income available to common shareholders	$ 100,882		$ 153,983		$ 160,449		$ 175,984		$ 189,505
PER COMMON SHARE DATA
Earnings per common share - basic	$        1.55		$        2.38		$        2.47		$        2.71		$        2.92
Earnings per common share - diluted	1.55		2.38		2.47		2.70		2.91
Cash dividends per common share	0.92		0.92		0.87		0.87		0.87
Book value per common share at end of quarter	55.64		44.59		50.55		51.59		46.49
OUTSTANDING COMMON SHARES
Period-end common shares	64,185		64,017		64,120		64,396		64,355
Weighted-average common shares - basic	64,139		64,067		64,241		64,374		64,303
Dilutive effect of stock compensation	176		172		187		258		344
Weighted-average common shares - diluted	64,315		64,239		64,428		64,632		64,647
SELECTED ANNUALIZED RATIOS
Return on average assets	0.82 %		1.25 %		1.30 %		1.39 %		1.44 %
Return on average common equity	13.51		18.93		19.36		22.59		27.16
Net interest income to average earning assets (1)	3.41		3.44		3.45		3.47		3.31
(1) Taxable-equivalent basis assuming a 21% tax rate.

 

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
	2023								2022
	4th Qtr		3rd Qtr		2nd Qtr		1st Qtr		4th Qtr
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
Loans	$   18,609		$   17,965		$   17,664		$   17,319		17,063
Earning assets	45,579		45,366		45,929		47,904		48,867
Total assets	49,087		48,804		49,317		51,307		52,284
Non-interest-bearing demand deposits	14,697		14,823		15,231		16,636		17,980
Interest-bearing deposits	26,487		26,005		25,776		26,121		26,779
Total deposits	41,184		40,828		41,007		42,757		44,759
Shareholders' equity	3,108		3,372		3,470		3,305		2,913
Period-End Balance:
Loans	$   18,824		$   18,399		$   17,746		$   17,486		$   17,155
Earning assets	47,124		45,218		45,146		47,870		49,402
Total assets	50,845		48,747		48,597		51,246		52,892
Total deposits	41,921		40,992		40,701		42,184		43,954
Shareholders' equity	3,716		3,000		3,387		3,468		3,137
Adjusted shareholders' equity (1)	4,836		4,779		4,692		4,610		4,486
ASSET QUALITY
($ in thousands)
Allowance for credit losses on loans:	$ 245,996		$ 242,235		$ 233,619		$ 231,514		$ 227,621
As a percentage of period-end loans	1.31 %		1.32 %		1.32 %		1.32 %		1.33 %
Net charge-offs:	$   10,884		$     4,992		$     9,828		$     8,782		$     3,810
Annualized as a percentage of average loans	0.23 %		0.11 %		0.22 %		0.21 %		0.09 %
Non-accrual loans:	$   60,907		$   67,175		$   67,781		$   38,410		$   37,833
As a percentage of total loans	0.32 %		0.37 %		0.38 %		0.22 %		0.22 %
As a percentage of total assets	0.12		0.14		0.14		0.07		0.07
CONSOLIDATED CAPITAL RATIOS
Common Equity Tier 1 Risk-Based Capital Ratio	13.25 %		13.32 %		13.42 %		13.24 %		12.85 %
Tier 1 Risk-Based Capital Ratio	13.73		13.81		13.92		13.74		13.35
Total Risk-Based Capital Ratio	15.18		15.28		15.39		15.22		14.84
Leverage Ratio	8.35		8.17		8.11		7.69		7.29
Equity to Assets Ratio (period-end)	7.31		6.15		6.97		6.77		5.93
Equity to Assets Ratio (average)	6.33		6.91		7.04		6.44		5.57
(1) Shareholders' equity excluding accumulated other comprehensive income (loss).

 

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
	Year Ended December 31,
	2023		2022		2021
CONDENSED INCOME STATEMENTS
Net interest income	$  1,558,664		$  1,291,283		$      984,867
Net interest income (1)	1,651,695		1,386,981		1,077,315
Credit loss expense	46,171		3,000		63
Non-interest income:
Trust and investment management fees	153,315		154,679		148,994
Service charges on deposit accounts	93,504		91,891		83,292
Insurance commissions and fees	58,271		53,210		51,548
Interchange and card transaction fees	19,419		18,231		17,461
Other charges, commissions and fees	49,026		41,590		36,836
Net gain (loss) on securities transactions	66		—		69
Other	54,941		45,217		48,528
Total non-interest income	428,542		404,818		386,728
Non-interest expense:
Salaries and wages	547,718		492,096		395,497
Employee benefits	115,306		88,608		82,029
Net occupancy	124,396		112,495		107,344
Technology, furniture and equipment	135,286		120,771		112,738
Deposit insurance	76,589		15,603		12,232
Other	229,367		194,701		172,154
Total non-interest expense	1,228,662		1,024,274		881,994
Income before income taxes	712,373		668,827		489,538
Income taxes	114,400		89,677		46,459
Net income	597,973		579,150		443,079
Preferred stock dividends	6,675		6,675		7,157
Net income available to common shareholders	$      591,298		$      572,475		$      435,922
PER COMMON SHARE DATA
Earnings per common share - basic	$            9.11		$            8.84		$            6.79
Earnings per common share - diluted	9.10		8.81		6.76
Cash dividends per common share	3.58		3.24		2.94
Book value per common share at end of quarter	55.64		46.49		67.11
OUTSTANDING COMMON SHARES
Period-end common shares	64,185		64,355		63,986
Weighted-average common shares - basic	64,204		64,157		63,613
Dilutive effect of stock compensation	201		364		489
Weighted-average common shares - diluted	64,405		64,521		64,102
SELECTED ANNUALIZED RATIOS
Return on average assets	1.19 %		1.11 %		0.95 %
Return on average common equity	18.66		16.86		10.35
Net interest income to average earning assets (1)	3.45		2.82		2.53
(1) Taxable-equivalent basis assuming a 21% tax rate.

 

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
	Year Ended December 31,
	2023		2022		2021
BALANCE SHEET SUMMARY ($ in millions)
Average Balance:
Loans	$        17,893		$        16,739		$   16,770
Loans excluding Paycheck Protection Program	17,870		16,600		14,918
Earning assets	46,186		48,293		43,196
Total assets	49,604		51,513		45,983
Non-interest-bearing demand deposits	15,340		18,203		16,671
Interest-bearing deposits	26,098		26,368		21,802
Total deposits	41,438		44,571		38,473
Shareholders' equity	3,313		3,541		4,359
Period-End Balance:
Loans	$        18,824		$        17,155		$   16,336
Loans excluding Paycheck Protection Program	18,815		17,120		15,908
Earning assets	47,124		49,402		48,063
Total assets	50,845		52,892		50,878
Total deposits	41,921		43,954		42,696
Shareholders' equity	3,716		3,137		4,440
Adjusted shareholders' equity (1)	4,836		4,486		4,092
ASSET QUALITY ($ in thousands)
Allowance for credit losses on loan:	$      245,996		$      227,621		$ 248,666
As a percentage of period-end loans	1.31 %		1.33 %		1.52 %
Net charge-offs:	$        34,486		$        15,766		$     8,414
Annualized as a percentage of average loans	0.19 %		0.09 %		0.05 %
Non-accrual loans:	$        60,907		$        37,833		$   53,713
As a percentage of total loans	0.32 %		0.22 %		0.33 %
As a percentage of total assets	0.12		0.07		0.11
CONSOLIDATED CAPITAL RATIOS
Common Equity Tier 1 Risk-Based Capital Ratio	13.25 %		12.85 %		13.13 %
Tier 1 Risk-Based Capital Ratio	13.73		13.35		13.70
Total Risk-Based Capital Ratio	15.18		14.84		15.45
Leverage Ratio	8.35		7.29		7.34
Equity to Assets Ratio (period-end)	7.31		5.93		8.73
Equity to Assets Ratio (average)	6.68		6.87		9.48
(1) Shareholders' equity excluding accumulated other comprehensive income (loss).

 

Cullen/Frost Bankers, Inc.
TAXABLE-EQUIVALENT YIELD/COST AND AVERAGE BALANCES (UNAUDITED)
	2023								2022
	4th Qtr		3rd Qtr		2nd Qtr		1st Qtr		4th Qtr
TAXABLE-EQUIVALENT YIELD/COST(1)
Earning Assets:
Interest-bearing deposits	5.39 %		5.33 %		5.05 %		4.57 %		3.70 %
Federal funds sold	5.73		5.65		5.35		4.72		3.88
Resell agreements	5.60		5.53		5.26		4.77		4.14
Securities	3.24		3.24		3.24		3.24		3.09
Loans, net of unearned discounts	6.92		6.83		6.64		6.36		5.80
Total earning assets	5.00		4.92		4.77		4.57		4.14
Interest-Bearing Liabilities:
Interest-bearing deposits:
Savings and interest checking	0.40		0.38		0.41		0.36		0.27
Money market deposit accounts	2.83		2.78		2.68		2.47		1.94
Time accounts	4.59		4.34		3.77		2.40		1.52
Total interest-bearing deposits	2.27		2.12		1.87		1.52		1.16
Total deposits	1.46		1.35		1.18		0.93		0.69
Federal funds purchased	5.40		5.32		4.97		4.55		3.78
Repurchase agreements	3.75		3.67		3.52		3.20		2.69
Junior subordinated deferrable interest debentures	7.45		7.34		6.84		6.46		5.39
Subordinated notes payable and other notes	4.69		4.69		4.69		4.69		4.69
Total interest-bearing liabilities	2.48		2.33		2.11		1.79		1.37
Net interest spread	2.52		2.59		2.66		2.78		2.77
Net interest income to total average earning assets	3.41		3.44		3.45		3.47		3.31
AVERAGE BALANCES
($ in millions)
Assets:
Interest-bearing deposits	$   7,047		$   6,747		$   6,880		$   8,687		$ 11,574
Federal funds sold	3		13		22		64		52
Resell agreements	86		85		85		90		49
Securities	19,834		20,557		21,278		21,744		20,129
Loans, net of unearned discount	18,609		17,965		17,664		17,319		17,063
Total earning assets	$ 45,579		$ 45,366		$ 45,929		$ 47,904		$ 48,867
Liabilities:
Interest-bearing deposits:
Savings and interest checking	$   9,986		$ 10,202		$ 10,862		$ 11,662		$ 12,113
Money market deposit accounts	11,219		11,144		11,431		12,404		12,958
Time accounts	5,282		4,659		3,483		2,055		1,708
Total interest-bearing deposits	26,487		26,005		25,776		26,121		26,779
Total deposits	41,184		40,828		41,007		42,757		44,759
Federal funds purchased	18		21		33		51		37
Repurchase agreements	3,761		3,536		3,719		4,211		3,575
Junior subordinated deferrable interest debentures	123		123		123		123		123
Subordinated notes payable and other notes	99		99		99		99		99
Total interest-bearing funds	$ 30,488		$ 29,785		$ 29,750		$ 30,606		$ 30,613
(1) Taxable-equivalent basis assuming a 21% tax rate.

A.B. Mendez
Investor Relations
210.220.5234

or

Bill Day
Media Relations
210.220.5427

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SOURCE Cullen/Frost Bankers, Inc.

FAQ

What was the net income available to common shareholders for the fourth quarter of 2023?

The net income available to common shareholders for the fourth quarter of 2023 was $100.9 million.

What was the impact of the one-time surcharge expense on net income for the fourth quarter of 2023?

The one-time surcharge expense was $51.5 million, impacting the net income for the fourth quarter of 2023.

What was the annual net income available to common shareholders for 2023?

The annual net income available to common shareholders for 2023 was $591.3 million, representing a 3.3% increase compared to 2022.

What dividend was declared for the first quarter of 2024?

A first-quarter cash dividend of $0.92 per common share and a cash dividend of $11.125 per share of Series B Preferred Stock were declared.

What was the authorized amount for the stock repurchase program?

The authorized amount for the stock repurchase program is $150 million over a one-year period expiring on January 24, 2025.