Cullen/Frost Bankers, Inc. Q3 2024 Earnings Report

Cullen/Frost Bankers, Inc. (NYSE: CFR) reported a decrease in earnings for Q3 2024. CEO Phil Green announced earnings of $144.8 million ($2.24 per share), down from $154 million ($2.38 per share) year-over-year. Despite this decline, the company has a positive outlook for future growth, especially in Texas.

Key Takeaways

• Earnings decreased to $144.8 million ($2.24 per share) from $154 million ($2.38 per share) year-over-year.
• Return on average assets and common equity also declined compared to last year.
• Deposits slightly decreased, while loans increased by 11.8%.
• Expansion efforts in Houston, Dallas, and Austin exceeded goals.
• Anticipated Fed rate cuts may enhance net interest income and loan growth.

Company Outlook

• Expecting two Fed rate cuts in late 2024.
• Net interest income growth projected at 2%-3%.
• Loan growth anticipated in low double digits.
• Average deposits expected to slightly decline.

Highlights

Bearish:

• Decreased earnings per share and returns on equity.
• Slight decline in average deposits.

Bullish:

• Expansion efforts yielding results.
• Improved consumer loan growth and credit quality.

Management Insights

Cullen/Frost has shown resilience and strategic investments in Texas markets, focusing on organic growth and maintaining a robust deposit structure. The company is optimistic about its performance heading into 2025 and beyond.

InvestingPro Insights

Cullen/Frost has a market capitalization of $8.12 billion and has raised its dividend for 32 consecutive years, maintaining an attractive yield for investors. Despite recent earnings dips, the firm has been profitable, boasting a P/E ratio of 15.75 and positive revenue growth.

Conference Call Highlights

Management Discussion:

• Phil Green and executives discussed the company's Q3 results, highlighting the increase in loan balances and expansion successful in Texas markets.
• Analysts raised questions about net interest margins and guidance, emphasizing the company’s growth strategy and credit quality.

Conclusion

Cullen/Frost Bankers, Inc. showcases its focus on growth, customer acquisition, and effective expense management, setting a positive tone for future performance. The discussion reflected confidence in the company's ability to navigate market conditions effectively, particularly post-election.

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