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Cullen/Frost Q2 Earnings Beat on Higher Y/Y NII & Fee Income Growth
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Key Takeaways
Cullen/Frost posted Q2 EPS of $2.70, topping estimates on net interest and fee income growth.
CFR loans grew to $23B and deposits rose to $43.3B, while credit loss expense declined y/y.
Cullen/Frost capital ratios increased and it repurchased 654,955 shares for $90.9M in Q2.
Cullen/Frost Bankers, Inc. (CFR - Free Report) reported second-quarter 2026 earnings per share of $2.70, beating the Zacks Consensus Estimate of $2.53. The bottom line also increased from $2.39 in the year-ago quarter.
Results benefited from higher net interest income (NII) and non-interest income. However, higher non-interest expenses remained a headwind.
Net income available to common shareholders was $170.4 million, up 9.7% from $155.3 million in the second quarter of 2025.
CFR’s Revenues & Expenses Increase
Total revenues were $598.4 million, topping the Zacks Consensus Estimate by 0.7%. The metric also improved from $567.8 million in the year-ago quarter.
NII rose 4.3% year over year to $470.1 million in the second quarter of 2026. Our estimate for NII was $446.6 million.
Non-interest income increased 9.4% year over year to $128.3 million. The rise was driven by higher trust and investment management fees, service charges on deposit accounts, interchange and card transaction fees, and other income. Our estimate for non-interest income was $126 million.
Non-interest expenses totaled $361.7 million, up 4.2% year over year. The increase was primarily attributable to higher salaries and wages, employee benefits, net occupancy, and technology, furniture and equipment expenses. Our estimate for non-interest expenses was $372.6 million.
CFR’s Loans & Deposits Rise
Total loans were $23.0 billion as of June 30, 2026, up from $22.4 billion in the prior quarter. Total deposits increased to $43.3 billion from $42.8 billion in the prior quarter. Our estimates for total loans and total deposits were $22.5 billion and $42.4 billion, respectively.
Cullen/Frost’s Credit Quality Improves
For the second quarter of 2026, the company recorded credit loss expenses of $9.8 million, down from $13.1 million in the prior-year quarter.
The allowance for credit losses on loans was $283.7 million at the quarter-end, representing 1.23% of the total loans compared with 1.31% a year earlier. Our estimate for the metric was pegged at $288.2 million.
CFR’s Capital Ratios & Profitability Ratios Improve
As of June 30, 2026, the common equity Tier 1 risk-based capital ratio was 14.06% compared with 13.95% a year ago. The Tier 1 risk-based capital ratio was 14.50% versus 14.41%, while the total risk-based capital ratio improved to 15.89% from 15.87%.
The leverage ratio was 9.07%, up from 8.97% in the prior-year period.
Return on average assets was 1.29% compared with 1.25% a year earlier, while return on average common equity was 14.90% versus 15.34% in the prior-year quarter.
CFR Dividend & Share Repurchase Update
The company paid out a quarterly cash dividend of $1.03 per common share during the quarter.
In the second quarter, Cullen/Frost repurchased 654,955 shares for $90.9 million.
Our Viewpoint on Cullen/Frost
CFR continued to benefit from steady growth in net interest income and fee-based revenues, while credit quality remained solid. Loan growth and a strong capital position are encouraging. However, higher operating expenses could continue to weigh on profitability in the near term.
Cullen/Frost Bankers, Inc. Price, Consensus and EPS Surprise
Popular, Inc. (BPOP - Free Report) reported second-quarter 2026 earnings per share of $4.35, which surpassed the Zacks Consensus Estimate of $3.69. The bottom line compared favorably with $3.09 in the year-ago quarter.
BPOP’s results benefited from higher NII, strong fee income growth and rising loan and deposit balances. Lower operating expenses on a year-over-year basis were also encouraging. However, higher provisions and net charge-offs were headwinds.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2026 earnings per share of $1.55 met the Zacks Consensus Estimate. The bottom line rose 17.4% from the prior-year quarter.
HWC’s results were supported by higher net interest income and non-interest income, along with a decline in provisions. Also, a sequential increase in loans and deposit balances was positive. However, higher expenses were the undermining factor.
View the Zacks #1 Rank List
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Cullen/Frost Q2 Earnings Beat on Higher Y/Y NII & Fee Income Growth
Key Takeaways
Cullen/Frost Bankers, Inc. (CFR - Free Report) reported second-quarter 2026 earnings per share of $2.70, beating the Zacks Consensus Estimate of $2.53. The bottom line also increased from $2.39 in the year-ago quarter.
Results benefited from higher net interest income (NII) and non-interest income. However, higher non-interest expenses remained a headwind.
Net income available to common shareholders was $170.4 million, up 9.7% from $155.3 million in the second quarter of 2025.
CFR’s Revenues & Expenses Increase
Total revenues were $598.4 million, topping the Zacks Consensus Estimate by 0.7%. The metric also improved from $567.8 million in the year-ago quarter.
NII rose 4.3% year over year to $470.1 million in the second quarter of 2026. Our estimate for NII was $446.6 million.
Non-interest income increased 9.4% year over year to $128.3 million. The rise was driven by higher trust and investment management fees, service charges on deposit accounts, interchange and card transaction fees, and other income. Our estimate for non-interest income was $126 million.
Non-interest expenses totaled $361.7 million, up 4.2% year over year. The increase was primarily attributable to higher salaries and wages, employee benefits, net occupancy, and technology, furniture and equipment expenses. Our estimate for non-interest expenses was $372.6 million.
CFR’s Loans & Deposits Rise
Total loans were $23.0 billion as of June 30, 2026, up from $22.4 billion in the prior quarter. Total deposits increased to $43.3 billion from $42.8 billion in the prior quarter. Our estimates for total loans and total deposits were $22.5 billion and $42.4 billion, respectively.
Cullen/Frost’s Credit Quality Improves
For the second quarter of 2026, the company recorded credit loss expenses of $9.8 million, down from $13.1 million in the prior-year quarter.
The allowance for credit losses on loans was $283.7 million at the quarter-end, representing 1.23% of the total loans compared with 1.31% a year earlier. Our estimate for the metric was pegged at $288.2 million.
CFR’s Capital Ratios & Profitability Ratios Improve
As of June 30, 2026, the common equity Tier 1 risk-based capital ratio was 14.06% compared with 13.95% a year ago. The Tier 1 risk-based capital ratio was 14.50% versus 14.41%, while the total risk-based capital ratio improved to 15.89% from 15.87%.
The leverage ratio was 9.07%, up from 8.97% in the prior-year period.
Return on average assets was 1.29% compared with 1.25% a year earlier, while return on average common equity was 14.90% versus 15.34% in the prior-year quarter.
CFR Dividend & Share Repurchase Update
The company paid out a quarterly cash dividend of $1.03 per common share during the quarter.
In the second quarter, Cullen/Frost repurchased 654,955 shares for $90.9 million.
Our Viewpoint on Cullen/Frost
CFR continued to benefit from steady growth in net interest income and fee-based revenues, while credit quality remained solid. Loan growth and a strong capital position are encouraging. However, higher operating expenses could continue to weigh on profitability in the near term.
Cullen/Frost Bankers, Inc. Price, Consensus and EPS Surprise
Cullen/Frost Bankers, Inc. price-consensus-eps-surprise-chart | Cullen/Frost Bankers, Inc. Quote
Currently, CFR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Popular, Inc. (BPOP - Free Report) reported second-quarter 2026 earnings per share of $4.35, which surpassed the Zacks Consensus Estimate of $3.69. The bottom line compared favorably with $3.09 in the year-ago quarter.
BPOP’s results benefited from higher NII, strong fee income growth and rising loan and deposit balances. Lower operating expenses on a year-over-year basis were also encouraging. However, higher provisions and net charge-offs were headwinds.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2026 earnings per share of $1.55 met the Zacks Consensus Estimate. The bottom line rose 17.4% from the prior-year quarter.
HWC’s results were supported by higher net interest income and non-interest income, along with a decline in provisions. Also, a sequential increase in loans and deposit balances was positive. However, higher expenses were the undermining factor.