A.B. Mendez

Investor Relations

210.220.5234

or

Bill Day

Media Relations

210.220.5427

FOR IMMEDIATE RELEASE    

July 25, 2024

SAN ANTONIO -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported second quarter 2024 results.

Net income available to common shareholders for the second quarter of 2024 was $143.8 million compared to $160.4 million for the second quarter of 2023. On a per-share basis, net income available to common shareholders for the second quarter of 2024 was $2.21 per diluted common share, compared to $2.47 per diluted common share reported a year earlier. Returns on average assets and average common equity were 1.18 percent and 17.08 percent, respectively, for the second quarter of 2024 compared to 1.30 percent and 19.36 percent, respectively, for the same period a year earlier.

For the second quarter of 2024, net interest income on a taxable-equivalent basis was $417.6 million, up 2.2 percent compared to the same quarter in 2023. Average loans for the second quarter of 2024 increased $2.0 billion, or 11.3 percent, to $19.7 billion, from the $17.7 billion reported for the second quarter a year earlier, and increased $540.0 million, or 2.8 percent, compared to the first quarter of 2024. Average deposits for the second quarter decreased $496.8 million, or 1.2 percent, to $40.5 billion, compared to the $41.0 billion reported for last year's second quarter, and decreased $214.7 million, or 0.5 percent, compared to the first quarter of 2024. Average non-interest-bearing deposits were down $297.6 million, or 2.1 percent, from the first quarter. Average interest-bearing deposits were up $82.9 million, or 0.3 percent, from the first quarter.

“Our people continue to execute on our organic growth strategy, and the results are shown in our second-quarter earnings as well as our solid loan growth,” said Cullen/Frost Chairman and CEO Phil Green. “We have the best bankers in the best markets, providing the best customer experience of any bank in our markets, and our continued investments will set us up to be able to extend our value proposition to more consumers and businesses throughout the state.”

For the first six months of 2024, net income available to common shareholders was $277.9 million, down 17.4 percent compared to $336.4 million for the first six months of 2023. Diluted EPS available to common shareholders for the first six months of 2024 was $4.27 compared to $5.17 in the year-earlier period. Returns on average assets and average common equity for the first six months of 2024 were 1.14 percent and 16.13 percent, respectively, compared to 1.35 percent and 20.92 percent, respectively, for the same period in 2023.

Noted financial data for the second quarter of 2024 follows:

•The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios at the end of the second quarter of 2024 were 13.35 percent, 13.82 percent and 15.27 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 $417.6 million for the second quarter of 2024, an increase of 2.2 percent, compared to the prior year period. Net interest margin was 3.54 percent for the second quarter compared to 3.48 percent for the first quarter of 2024 and 3.45 percent for the second quarter of 2023.

•Non-interest income for the second quarter of 2024 totaled $111.2 million, an increase of $7.7 million, or 7.4 percent, from the $103.5 million reported for the second quarter of 2023. Trust and investment management fees increased $2.0 million or 5.1 percent, compared to the second quarter of 2023. The increase in trust and investment management fees during the second quarter was primarily related to an increase in investment management fees (up $2.8 million), and oil and gas fees (up $906,000), partly offset by decreases in estate fees (down $996,000) and real estate fees (down $753,000). Service charges on deposit accounts increased $2.6 million or 11.2 percent, compared to the second quarter of 2023. The increase in the second quarter was primarily related to increases in commercial service charges (up $1.3 million) and commercial and consumer overdraft charges (up $1.1 million), among other things. Other non-interest income increased $1.0 million, or 10.1 percent, compared to the second quarter of 2023. The increase was primarily related to an increase in public finance underwriting fees (up $1.1 million). Insurance commissions and fees increased $979,000, or 7.6 percent, compared to the second quarter of 2023. The increase in the second quarter was primarily the result of an increase in commission income (up $891,000), mainly related to commercial lines property and casualty commissions.

•Non-interest expense was $317.0 million for the second quarter of 2024, up $31.9 million, or 11.2 percent, compared to the $285.0 million reported for the second quarter a year earlier. Salaries and wages expense increased $18.0 million, or 13.5 percent, compared to the second quarter of 2023. The increase in salaries and wages was primarily related to increases in salaries due to annual merit and market increases and to an increase in the number of employees. The increase in the number of employees was partly related to our investment in organic expansion in various markets. Employee benefits expense increased by $2.0 million, or 7.5 percent, compared to the second quarter of 2023. The increase in employee benefits expense was primarily related to increases in medical/dental benefits expense (up $1.5 million) and payroll taxes (up $1.3 million), partly offset by a decrease in 401(k) plan expense (down $618,000), among other things. Other non-interest expense increased $6.1 million, or 11.3 percent, compared to the second quarter of 2023. The increase in other non-interest expense during the second quarter of 2024 included increases in professional services expense (up $862,000), which was primarily related to information technology services; advertising/promotions expense (up $757,000); and fraud losses (up $500,000), among other things. Technology, furniture, and equipment expense increased $2.9 million, or 8.8 percent, compared to the second quarter of 2023. The increase was primarily related to increased cloud services expense.

•For the second quarter of 2024, the company reported a credit loss expense of $15.8 million, and reported net loan charge-offs of $9.7 million. This compares to a credit loss expense of $13.7 million and net loan charge-offs of $7.3 million for the first quarter of 2024 and a credit loss expense of $9.9 million and net

loan charge-offs of $9.8 million for the second quarter of 2023. The allowance for credit losses on loans as a percentage of total loans was 1.28 percent at June 30, 2024, compared to 1.29 percent at the end of the first quarter of 2024 and 1.32 percent at the end of the second quarter of 2023. Non-accrual loans were $75.0 million at the end of the second quarter of 2024, compared to $71.5 million at the end of the first quarter of 2024 and $67.8 million at the end of the second quarter of 2023.

The Cullen/Frost board declared a third-quarter cash dividend of $0.95 per common share, representing a 3.3 percent increase compared to the previous quarterly dividend of $0.92 per share. The dividend on common stock is payable September 13, 2024 to shareholders of record on August 30 of this year. The board of directors also declared a cash dividend of $11.125 per share of Series B Preferred Stock (or $0.278125 per depositary share). The depositary shares representing the Series B Preferred Stock are traded on the NYSE under the symbol "CFR PrB." The Series B Preferred Stock dividend is payable September 16, 2024 to shareholders of record on August 30 of this year.

Cullen/Frost Bankers, Inc. will host a conference call on Thursday, July 25, 2024, at 1 p.m. Central Time (CT) to discuss the results for the quarter. The media and other interested parties are invited to access the call in a “listen only” mode at 1-877-709-8150 or via webcast on our investor relations website linked below. Playback of the conference call will be available after 5 p.m. CT on the day of the call until midnight Sunday, July 28, 2024 at 1-877-660-6853 with Conference ID # of 13747676. A replay of the call will also be available by webcast at the URL listed below after 5 p.m. CT on the day of the call.

Cullen/Frost investor relations website: https://investor.frostbank.com/ Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding company, headquartered in San Antonio, with $48.8 billion in assets at June 30, 2024. Frost provides a wide range of banking, investments and insurance services to businesses and individuals across Texas in the Austin, Corpus Christi, Dallas, Fort Worth, Houston, Permian Basin, Rio Grande Valley and San Antonio regions. Founded in 1868, Frost has helped clients with their financial needs during three centuries. Additional information is available at www.frostbank.com.

Certain statements contained in this Earnings Release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the SEC, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of Cullen/Frost or its management or Board of Directors, including those relating to products, services or operations; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes”, “anticipates”, “expects”, “intends”, “targeted”, “continue”, “remain”, “will”, “should”, “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

•The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board.

•Inflation, interest rate, securities market, and monetary fluctuations.

•Local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact.

•Changes in the financial performance and/or condition of our borrowers.

•Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs.

•Changes in estimates of future credit loss reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.

•Changes in our liquidity position.

•Impairment of our goodwill or other intangible assets.

•The timely development and acceptance of new products and services and perceived overall value of these products and services by users.

•Changes in consumer spending, borrowing, and saving habits.

•Greater than expected costs or difficulties related to the integration of new products and lines of business.

•Technological changes.

•The cost and effects of cyber incidents or other failures, interruptions, or security breaches of our systems or those of our customers or third-party providers.

•Acquisitions and integration of acquired businesses.

•Changes in the reliability of our vendors, internal control systems or information systems.

•Our ability to increase market share and control expenses.

•Our ability to attract and retain qualified employees.

•Changes in our organization, compensation, and benefit plans.

•The soundness of other financial institutions.

•Volatility and disruption in national and international financial and commodity markets.

•Changes in the competitive environment in our markets and among banking organizations and other financial service providers.

•Government intervention in the U.S. financial system.

•Political or economic instability.

•Acts of God or of war or terrorism.

•The potential impact of climate change.

•The impact of pandemics, epidemics, or any other health-related crisis.

•The costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals.

•The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) and their application with which we and our subsidiaries must comply.

•The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.

•Our success at managing the risks involved in the foregoing items.

In addition, financial markets and global supply chains may continue to be adversely affected by the current or anticipated impact of global wars/military conflicts, terrorism, or other geopolitical events.

Forward-looking statements speak only as of the date on which such statements are made. We do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
			2024												2023
			2nd Qtr						1st Qtr						4th Qtr						3rd Qtr						2nd Qtr
CONDENSED INCOME STATEMENTS
Net interest income			$	396,712					$	390,051					$	388,152					$	385,426					$	385,266
Net interest income (1)			417,621						411,367						409,904						407,353						408,594
Credit loss expense			15,787						13,650						15,981						11,185						9,901
Non-interest income:
Trust and investment management fees			41,404						39,085						40,163						37,616						39,392
Service charges on deposit accounts			26,114						24,795						24,535						23,603						23,487
Insurance commissions and fees			13,919						18,296						12,743						13,636						12,940
Interchange and card transaction fees			5,351						4,474						4,608						4,672						5,250
Other charges, commissions, and fees			13,020						12,060						12,104						13,128						12,090
Net gain (loss) on securities transactions			—						—						—						12						33
Other			11,382						12,667						19,598						13,331						10,336
Total non-interest income			111,190						111,377						113,751						105,998						103,528
Non-interest expense:
Salaries and wages			151,237						148,000						146,616						137,562						133,195
Employee benefits			28,802						35,970						28,065						26,527						26,792
Net occupancy			32,374						31,778						30,752						31,581						31,714
Technology, furniture, and equipment			35,951						34,995						34,484						35,278						33,043
Deposit insurance			8,383						14,724						58,109						6,033						6,202
Other			60,217						60,750						67,196						56,275						54,096
Total non-interest expense			316,964						326,217						365,222						293,256						285,042
Income before income taxes			175,151						161,561						120,700						186,983						193,851
Income taxes			29,652						25,871						18,149						31,332						31,733
Net income			145,499						135,690						102,551						155,651						162,118
Preferred stock dividends			1,669						1,669						1,669						1,668						1,669
Net income available to common shareholders			$	143,830					$	134,021					$	100,882					$	153,983					$	160,449
PER COMMON SHARE DATA
Earnings per common share - basic			$	2.21					$	2.06					$	1.55					$	2.38					$	2.47
Earnings per common share - diluted			2.21						2.06						1.55						2.38						2.47
Cash dividends per common share			0.92						0.92						0.92						0.92						0.87
Book value per common share at end of quarter			55.02						54.36						55.64						44.59						50.55
OUTSTANDING COMMON SHARES
Period-end common shares			63,989						64,251						64,185						64,017						64,120
Weighted-average common shares - basic			64,193						64,216						64,139						64,067						64,241
Dilutive effect of stock compensation			140						156						176						172						187
Weighted-average common shares - diluted			64,333						64,372						64,315						64,239						64,428
SELECTED ANNUALIZED RATIOS
Return on average assets			1.18		%				1.09		%				0.82		%				1.25		%				1.30		%
Return on average common equity			17.08						15.22						13.51						18.93						19.36
Net interest income to average earning assets			3.54						3.48						3.41						3.44						3.45
(1) Taxable-equivalent basis assuming a 21% tax rate.