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Cullen/frost Bankers (CFR)
:CFR
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Cullen/Frost Bankers
(NYSE:CFR)
76Outperform
Positive Factors
Branch Expansion
Cullen/Frost Bankers is expanding its branch network in major Texas cities, which is expected to drive deposit and loan growth in the future.
Earnings Performance
Cullen/Frost Bankers reported earnings per share of $2.36, surpassing expectations due to better-than-expected growth in loans and earning assets, as well as stable net interest margins.
Negative Factors
Credit Migration
Credit migration was negative, driving reserve build/provision miss.
Cullen/Frost Bankers (CFR) vs. S&P 500 (SPY)
Market Cap
$7.83B
Dividend Yield2.98%
Average Volume (3M)443.79K
Price to Earnings (P/E)14.3
Beta (1Y)0.96
Revenue Growth7.81%
EPS Growth-2.49%
CountryUS
Employees5,854
SectorFinancial
Sector Strength77
IndustryBanking
Share Statistics
EPS (TTM)8.86
Shares Outstanding64,235,030
10 Day Avg. Volume418,785
30 Day Avg. Volume443,793
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.14
Price to Cash Flow (P/CF)6.60
P/FCF Ratio4.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$147.85Price Target Upside21.35% Upside
Rating ConsensusHold
Number of Analyst Covering9
Cullen/Frost Bankers Business Overview & Revenue Model
Company DescriptionCullen/Frost Bankers, Inc. (CFR) is a financial holding company, primarily operating through its subsidiary, Frost Bank. Based in Texas, the company provides a comprehensive range of financial services, which include commercial and consumer banking, investment services, and insurance products. With a strong regional presence, Cullen/Frost Bankers caters to both individual and business clients, offering personalized services and fostering long-term customer relationships.
How the Company Makes MoneyCullen/Frost Bankers generates revenue through several key streams. The primary source is interest income from loans and advances provided to individuals and businesses, including commercial loans, real estate loans, and consumer loans. The company also earns non-interest income from service charges on deposit accounts, fees from asset management and investment services, and income from insurance products. Additionally, the bank profits from securities gains and trading activities. Significant partnerships with financial service providers and a robust local network contribute to the company's financial performance, allowing it to maintain a competitive edge in the regional banking sector.
Cullen/Frost Bankers Financial Statement Overview
Summary
Cullen/Frost Bankers displays a solid financial standing with consistent revenue growth and effective cash flow management. The balance sheet reflects prudent financial policies with minimal debt, which is advantageous in the banking sector. Despite minor fluctuations in profitability and liquidity, the company's overall trajectory appears stable and promising, aligning well with industry norms.Income Statement
Cullen/Frost Bankers has demonstrated solid revenue growth over the years, with Total Revenue increasing from $1.37 billion in 2019 to $2.39 billion in 2024. The Net Profit Margin remains robust, though it has slightly fluctuated, indicating effective cost management. The company's performance in 2023 was strong with a Net Income of $597.97 million, but it slightly decreased in 2024. EBIT and EBITDA margins are not available for the latest year, which could provide more insights into operational efficiency.75
Positive
Balance Sheet
The company's balance sheet reveals a strong equity position with Stockholders' Equity standing at $3.9 billion in 2024. The Debt-to-Equity ratio is minimal due to negligible total debt, indicating a conservative leverage strategy typical for the banking industry. The Equity Ratio has shown some variation but remains relatively stable, supporting a solid financial foundation. However, the decrease in Cash and Cash Equivalents from 2021 to 2024 might warrant attention regarding liquidity management.70
Positive
Cash Flow
Cullen/Frost Bankers exhibits a healthy Operating Cash Flow, which has increased significantly from $634 million in 2019 to $989.53 million in 2024. The Free Cash Flow growth has been positive, showcasing the company's ability to generate cash after capital expenditures. The Operating Cash Flow to Net Income ratio is strong, indicating efficient conversion of income into cash flow. However, fluctuations in Investing and Financing Cash Flows suggest variability in capital management strategies.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.39B | 1.94B | 220.38M | 1.37B | 1.44B | Gross Profit |
| 2.39B | 1.94B | 220.38M | 1.37B | 1.44B | EBIT |
| -1.56B | 712.37M | 1.01B | 489.54M | 351.32M | EBITDA |
| 0.00 | 0.00 | 740.17M | 558.83M | 415.69M | Net Income Common Stockholders |
| 582.54M | 597.97M | 579.15M | 443.08M | 331.15M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 15.77B | 8.59B | 18.94B | 30.47B | 20.73B | Total Assets |
| 52.52B | 50.85B | 52.89B | 48.90B | 40.96B | Total Debt |
| 222.83M | 222.62M | 222.40M | 222.19M | 235.38M | Net Debt |
| -722.91M | -8.38B | -11.60B | -16.32B | -10.05B | Total Liabilities |
| 48.62B | 47.13B | 49.76B | 44.46B | 36.67B | Stockholders Equity |
| 3.90B | 3.72B | 3.14B | 4.44B | 4.29B |
| Cash Flow | Free Cash Flow | |||
| 989.53M | 320.21M | 620.08M | 582.44M | 428.82M | Operating Cash Flow |
| 989.53M | 478.85M | 722.58M | 648.29M | 524.24M | Investing Cash Flow |
| -180.88M | -942.75M | -8.28B | -2.53B | -1.63B | Financing Cash Flow |
| 738.33M | -2.88B | 3.00B | 8.17B | 7.61B |
Cullen/Frost Bankers Technical Analysis
Negative
121.84
Price Trends
136.85
Negative
134.79
Negative
119.85
Positive
Market Momentum
-2.70
Positive
30.74
Neutral
13.47
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CFR, the sentiment is Negative. The current price of 121.84 is below the 20-day moving average (MA) of 136.65, below the 50-day MA of 136.85, and above the 200-day MA of 119.85, indicating a neutral trend. The MACD of -2.70 indicates Positive momentum. The RSI at 30.74 is Neutral, neither overbought nor oversold. The STOCH value of 13.47 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CFR.
Cullen/Frost Bankers Risk Analysis
Cullen/Frost Bankers disclosed 39 risk factors in its most recent earnings report. Cullen/Frost Bankers reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cullen/Frost Bankers Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $7.83B | 14.29 | 15.13% | 2.98% | 7.81% | -2.49% | |
72 Outperform | $8.15B | 16.07 | 16.67% | 1.65% | -2.75% | 11.75% | |
70 Outperform | $6.82B | 14.43 | 6.60% | 3.10% | 11.96% | 11.66% | |
69 Neutral | $6.98B | 10.13 | 13.15% | 3.35% | 7.91% | 13.79% | |
68 Neutral | $6.37B | 12.59 | 9.70% | 2.19% | 11.17% | 1.47% | |
64 Neutral | $13.80B | 10.64 | 9.23% | 4.22% | 17.66% | -7.66% | |
61 Neutral | $9.24B | 13.92 | 8.70% | 3.18% | 4.56% | -13.90% |
* Financial Sector Average
Performance Comparison
CFR
Cullen/Frost Bankers
121.84
17.31
16.56%
BOKF
Bok Financial
98.85
14.57
17.29%
CBSH
Commerce Bancshares
59.57
10.76
22.04%
FHN
First Horizon
18.19
3.99
28.10%
PB
Prosperity Bancshares
70.66
10.15
16.77%
ZION
Zions Bancorporation National Association
47.33
7.77
19.64%
Cullen/Frost Bankers Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -11.60% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with strong quarterly results, significant loan and deposit growth, and successful expansion efforts. However, the decline in full-year earnings, increased nonperforming assets, and higher net charge-offs pose challenges. The overall sentiment is cautious optimism with a focus on managing risks and maintaining growth.Highlights
Strong Quarterly and Annual Performance
Cullen/Frost earned $153.2 million or $2.36 per share in Q4 2024, compared to $100.9 million or $1.55 per share in Q4 2023. Full-year net income was $575.9 million compared to $591.3 million in 2023.
Significant Loan Growth
Average loans grew by 9% to $20.3 billion in Q4 2024 compared to $18.6 billion in Q4 2023, with strong consumer loan growth at a 21% annual growth rate.
Expansion Success
Expansion efforts generated $2.4 billion in deposits, $1.8 billion in loans, and added more than 59,000 new households. Consumer checking household growth continued its 4-year run of 6% or greater growth.
Improved Return Metrics
Return on average assets and average common equity in Q4 2024 were 1.19% and 15.58% respectively, compared to 0.82% and 13.51% in Q4 2023.
Positive Deposit Trends
Average deposits in Q4 2024 were $41.9 billion, up from $41.2 billion in Q4 2023, with consumer deposits growing 3.2% for the year.
Lowlights
Decline in Full-Year Earnings
2024 full-year earnings per share were $8.87, down from $9.10 per share in 2023.
Increased Nonperforming Assets
Nonperforming assets totaled $93 million at the end of Q4 2024, up from $62 million in Q4 2023.
Higher Net Charge-Offs
Net charge-offs for Q4 2024 were $14 million compared to $10.9 million in Q4 2023, with annualized net charge-offs representing 27 basis points of average loans.
Increased Total Problem Loans
Total problem loans increased to $943 million at the end of Q4 2024 from $839 million at the end of Q3 2024.
Pressure on Net Interest Margin
Net interest margin percentage was down three basis points to 3.53% in Q4 2024 from 3.56% in Q3 2024.
Company Guidance
During the fourth quarter and full year 2024 results conference call for Cullen/Frost Bankers, various financial metrics and guidance were discussed. The company reported fourth-quarter earnings of $153.2 million, or $2.36 per share, a notable increase from the $100.9 million, or $1.55 per share, from the same quarter last year. For the full year 2024, net income available to common shareholders was $575.9 million, compared to $591.3 million in 2023, with earnings per share at $8.87, down from $9.10 the previous year. The return on average assets was 1.19%, and average common equity was 15.58% for the fourth quarter, both improvements from the previous year. Average deposits rose to $41.9 billion, and average loans increased by 9% to $20.3 billion. The company highlighted significant growth in consumer loans, with a 21% annual increase, and anticipated 2025 loan growth in the mid to high single digits. They plan for net interest income growth of 4% to 6% and expect the net interest margin to improve by about 10 basis points. The company also discussed its ongoing expansion efforts, which have generated $2.4 billion in deposits and $1.8 billion in loans, surpassing their goals. Despite these achievements, the company is mindful of competitive pressures and intends to continue investing in technology and branch expansions to sustain growth.Cullen/Frost Bankers Corporate Events
Business Operations and StrategyFinancial Disclosures
Cullen/Frost Bankers Highlights Strong Market Leadership
Positive
Feb 12, 2025
On December 31, 2024, Cullen/Frost Bankers released an investor presentation highlighting its financial performance and strategic positioning. The company has maintained strong market leadership in Texas, receiving top satisfaction rankings and numerous awards. Their technological advancements include a highly-rated mobile app and increased digital transactions. The presentation underscores the company’s resilience and commitment to growth in a competitive industry, which is significant for stakeholders given the robust Texas market and Cullen/Frost’s significant presence and influence.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.