Key Highlights

  • Diluted EPS of USD 2.84 rose 6.4% from USD 2.67 and topped the consensus estimate of USD 2.80.
  • Taxable-equivalent Revenue of USD 626.7 million beat the consensus estimate of USD 610.2 million; net interest Margin reached 3.78%.
  • Net income to common shareholders reached USD 178.5 million, up 3.4%, with return on average common Equity at 16.16%.
  • Total loans reached USD 23.66 billion versus USD 21.89 billion at year end; total deposits rose to USD 44.22 billion.

Cullen/Frost Bankers, Inc. (NYSE:CFR) reported third quarter 2026 Diluted Earnings per Share of USD 2.84, above a consensus estimate of USD 2.80 and up from USD 2.67 a year earlier. Net Income available to common shareholders was USD 178.5 million, compared with USD 172.7 million in the prior year period. Revenue on a taxable-equivalent basis, which is net interest income of USD 490.8 million plus non-interest income of USD 136.0 million, came to USD 626.7 million, above a consensus estimate of USD 610.19 million. On a GAAP basis, net interest income was USD 467.9 million, so total GAAP revenue was USD 603.8 million.

Margin Expansion and Fee Growth Offset Higher Costs

Net interest income rose USD 26.1 million, or 5.9%, on higher average Loan volumes and lower average costs on interest-bearing deposits and repurchase agreements. Average loans increased by USD 1.9 billion from the prior year period, while taxable-equivalent net interest margin widened 9 basis points to 3.78%. Non-interest income grew USD 10.3 million to USD 136.0 million, with trust and Investment management fees up 10.3% to USD 49.5 million and service charges on deposit accounts rising to USD 36.3 million from USD 31.4 million. A net loss of USD 7.5 million on securities transactions partly offset those gains.

Non-interest expense increased 7.0% to USD 377.2 million. Salaries and wages rose USD 13.0 million on merit increases and headcount growth tied to organic expansion across markets, and Advertising and promotions expense added USD 6.4 million. Credit loss expense was USD 12.1 million versus USD 6.8 million a year earlier, and the effective tax rate was about 16%, with income taxes of USD 34.3 million on pretax income of USD 214.5 million.

Rate Sensitivity and Credit Quality Disclosures

Management describes the rate backdrop in terms of Balance Sheet structure rather than earnings targets: about 40.4% of loans carry fixed rates, with the remainder floating, mostly tied to SOFR at roughly 40.5% and the prime rate at roughly 18.0%. The company said its balance sheet is less asset-sensitive than at year end. Its simulations project net interest income 0.8% higher for a 100 basis point ratable rise in rates and 0.9% lower for a 100 basis point decline over the next 12 months.

Credit measures were mixed. Non-accrual loans fell to USD 63.7 million from USD 70.5 million at year end, and the allowance for credit losses on loans stood at 1.23% of total loans versus 1.29%. Annualized net charge-offs were 0.14% of average loans for the quarter, led by consumer and other loans. The Common Equity Tier 1 ratio was 13.76%, down from 14.06% at December 31, 2025, against a 7.00% minimum including the conservation buffer.

Items Worth Tracking Into the Next Report

Several figures frame the next release. Net interest margin of 3.78% and the 0.8% and 0.9% sensitivity readings show how rate moves feed through. Non-accrual loans of USD 63.7 million and the 1.23% allowance ratio mark the credit baseline. The company repurchased 1,255,408 shares for USD 175.0 million under its USD 300.0 million program, which expires on January 27, 2027, and the quarterly Dividend was USD 1.03 per share versus USD 1.00. The CET1 ratio of 13.76% provides the Capital reference for both.