AI Earnings Predictions for Cullen/Frost Bankers Inc. (CFR)

cfr-20230126

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United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 26, 2023

Cullen/Frost Bankers, Inc.

(Exact name of registrant as specified in its charter)

Texas001-1322174-1751768

(State or other jurisdiction of incorporation or organization)(Commission File Number)(I.R.S. Employer Identification No.)

111 W. Houston Street,San Antonio,Texas78205

(Address of principal executive offices)(Zip code)

(210)220-4011

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered

Common Stock, $.01 Par ValueCFRNew York Stock Exchange

Depositary Shares, each representing a 1/40th interest in a share of 4.450% Non-Cumulative Perpetual Preferred Stock, Series BCFR.PrBNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Item 2.02    Results of Operations and Financial Condition

Attached as Exhibit 99.1 and incorporated into this item by reference is a press release issued by the Registrant on January 26, 2023 regarding its financial results for the quarter and year ended December 31, 2022. The information furnished by the Registrant pursuant to this item shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Item 9.01    Financial Statements and Exhibits

(d)   Exhibits:

99.1    Press Release dated January 26, 2023.

104    Cover Page Interactive Data File - The cover page XBRL tags are embedded within the inline XBRL document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CULLEN/FROST BANKERS, INC.

By:    /s/ Jerry Salinas

Jerry Salinas

Group Executive Vice President

and Chief Financial Officer

Dated:    January 26, 2023

EXHIBIT INDEX

Exhibit NumberDescription

99.1 Press Release dated January 26, 2023.

104Cover Page Interactive Data File - The cover page XBRL tags are embedded within the inline XBRL document.

EX-99.1

2 a3q22formxex991xpressrelea.htm

EX-99.1 - 3Q22 EARNINGS RELEASE

Document

Exhibit 99.1

A.B. Mendez

Investor Relations

210.220.5234

or

Bill Day

Media Relations

210.220.5427

FOR IMMEDIATE RELEASE

October 27, 2022

CULLEN/FROST REPORTS THIRD QUARTER RESULTS

Board declares fourth quarter dividend on common and preferred stock

SAN ANTONIO -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported third quarter 2022 results.

Net income available to common shareholders for the third quarter of 2022 was $168.1 million compared to $106.3 million in the third quarter of 2021. On a per-share basis, net income available to common shareholders for the third quarter of 2022 was $2.59 per diluted common share, compared to $1.65 per diluted common share reported a year earlier, representing a 57.0 percent increase. Returns on average assets and average common equity were 1.27 percent and 20.13 percent, respectively, for the third quarter of 2022 compared to 0.90 percent and 9.87 percent, respectively, for the same period a year earlier.

For the third quarter of 2022, net interest income on a taxable-equivalent basis was $379.5 million, up 40.9 percent, compared to the same quarter in 2021. Average loans for the third quarter of 2022 increased $633.6 million, or 3.9 percent, to $16.8 billion, from the $16.2 billion reported for the third quarter a year earlier. Excluding PPP loans, third quarter average loans of $16.8 billion represented a 13.0 percent increase compared to the third quarter of 2021 and a 1.3 percent increase compared to the second quarter of 2022. Average deposits for the third quarter were $45.8 billion, up $6.7 billion, or 17.1 percent, compared to the $39.1 billion reported for last year's third quarter, and up $1.1 billion, or 2.4 percent, compared to the second quarter of 2022.

“Our third quarter results demonstrate how well-positioned we are for a rising interest rate environment, and they highlight our employees' success in executing our organic growth strategy,” said Phil Green, Cullen/Frost Chairman and CEO. “The performance resulted in part from higher interest rates, but we also have shared those increases with our customers in the form of higher rates on deposit accounts. That, in turn, has led to increased deposit growth and bolstered our relationships with customers.

“That investment, along with our investments in regional expansion projects, our new residential mortgage product, and enhancements in customer experiences, will lead to further benefits in the long term.”

For the first nine months of 2022, net income available to common shareholders was $383.0 million, up 13.8 percent compared to $336.6 million for the first nine months of 2021. Diluted EPS available to common shareholders for the first nine months of 2021 was $5.90 compared to $5.22 in the year-earlier period, representing an increase of 13.0 percent. Returns on average assets and average common equity for the first nine months of 2022 were 1.00 percent and 14.19 percent, respectively, compared to 1.00 percent and 10.72 percent, respectively, for the same period in 2021.

Noted financial data for the third quarter of 2022 follows:

•The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios at the end of the third quarter of 2022 were 12.74 percent, 13.26 percent and 14.80 percent, respectively, and continue to be in excess of well-capitalized levels and exceed Basel III minimum requirements.

•Net interest income on a taxable-equivalent basis was $379.5 million, an increase of 40.9 percent, compared to the prior year period. Net interest margin was 3.01 percent for the third quarter of 2022, a 45 basis point increase from 2.56 percent for the second quarter of 2022 and compared to 2.47 percent for the third quarter of 2021.

•Non-interest income for the third quarter of 2022 totaled $99.8 million, an increase of $6.6 million, or 7.1 percent, from the $93.2 million reported for the third quarter of 2021. Service charges on deposit accounts increased $1.7 million, or 8.2 percent, compared to the third quarter of 2021. The increase during the third

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quarter of 2022 was primarily related to increases in overdraft charges (up $1.9 million). Insurance commissions and fees increased $1.4 million, or 12.0 percent, compared to the third quarter of 2021. The increase during the third quarter of 2022 was primarily the result of an increase in commission income (up $1.4 million). Other charges, commissions and fees increased $1.3 million, or 13.4 percent, compared to the third quarter of 2021. The increase was primarily related to increases in income from the placement of money market accounts (up $1.6 million) and merchant services rebates/bonuses (up $417,000), among other things, partly offset by a decrease in income from the sale of mutual funds (down $983,000).

•Non-interest expense was $257.9 million for the quarter, up $39.9 million, or 18.3 percent, compared to the $218.0 million reported for th