NYSE$CFR

Cullen/Frost Bankers Inc. · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Cullen/Frost Bankers reported strong Q4 2022 results driven by organic growth and increased net interest income.

Cullen/Frost Bankers reported a significant increase in net income available to common shareholders for Q4 2022, reaching $189.5 million, a 90.7% increase compared to Q4 2021. Earnings per diluted common share rose to $2.91, and net interest income saw a substantial increase. The company's organic growth strategy, particularly in Houston and Dallas, contributed to the positive results.

  • Net income available to common shareholders increased by 90.7% to $189.5 million compared to Q4 2021.
  • Earnings per diluted common share rose to $2.91, up from $1.54 in Q4 2021.
  • Net interest income on a taxable-equivalent basis increased by 60.5% to $423.9 million.
  • Average loans increased by 6.8% to $17.1 billion compared to Q4 2021.

Headline financials

Total Revenue

$504M

Previous: $373M+35.1%
EPS (adj)

$2.91

Previous: $1.54+89.0%
ROAA

1.4%

Previous: 0.8%+77.8%
ROACE

27.2%

Previous: 9.3%+193.3%
CET1 Ratio

12.8%

Previous: 13.1%-2.1%
Tier 1 Capital Ratio

13.3%

Previous: 13.7%-2.6%
Total Capital Ratio

14.8%

Previous: 15.4%-3.9%
Tier 1 Leverage Ratio

7.3%

Previous: 7.3%-0.7%
NALs to Total Loans

0.2%

No prior period
Capital Expenditures

$46.9M

Previous: $28.8M+62.9%
Free Cash Flow

$136M

Previous: $66.9M+102.9%
Net Income

$191M

Previous: $101M+89.2%
Operating Income

$220M

Previous: $111M+97.8%
Gross Profit

$504M

Previous: $350M+44.1%
Cash & Equivalents

$12B

Previous: $15.6B-22.8%
Total Assets

$52.9B

Previous: $50.9B+4.0%
Stock-Based Comp

$9.62M

Previous: $5M+92.5%

Revenue & EPS history

Cullen/Frost Bankers · Revenue · Quarterly

$504M

Q4 2022+35.1%vs Q4 2021
Beat estimate in 5 of 14 quarters(36%)
ActualEstimate

Revenue by segment

Cullen/Frost Bankers · $78.2M total across 4 segments · Q4 2022

  • Trust & Investment Mgmt
    $39.7M+3.3%
  • Deposit Service Charges
    $22.3M+0.4%
  • Insurance Commissions
    $11.7M-0.3%
  • Interchange Fees
    $4.48M+5.7%

Forward guidance

The company did not provide specific forward guidance in this earnings report. However, the CEO expressed confidence in the company's momentum as they enter 2023, citing the success of their organic growth strategy and new initiatives like the mortgage pilot program.

Tailwinds

  • Organic growth strategy paying off in Houston with newly opened locations surpassing $1 billion in deposits.
  • Expansion in Dallas with 10 new financial centers and over 100 banking positions filled.
  • Successful launch of mortgage pilot program with the first loan closed.
  • Strong capital ratios exceeding well-capitalized levels and Basel III requirements.
  • Increase in net interest income and net interest margin.

Headwinds

  • Decrease in non-interest income due to the absence of a gain on the exchange of a branch facility recorded in Q4 2021.
  • Increase in non-interest expense, particularly salaries and wages, due to merit increases, minimum wage implementation, and organic expansion investments.
  • Increase in fraud losses and accrual related to a license negotiation impacting other non-interest expenses.
  • Customer balances moved out of deposit accounts and into repurchase agreement accounts
  • Net charge-offs increased to $3.8 million

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2022

Historical avgQ4 2022

+0.7%

Avg return

Earnings day

+0.7%

Avg return

5 days after

+1.2%

Avg return

30 days after

62%

42 / 68 earnings

Positive

+10.7%

Q4 2015

Best reaction

-8.4%

Q2 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+1.5%-1.6%-5.1%
Q4 2025-0.3%-0.1%+8.6%
Q3 2025+1.8%+1.6%+1.9%
Q1 2025+3.3%+5.1%+9.0%
Q4 2024+1.2%-0.1%-1.3%
Q3 2024-3.4%-2.2%+7.8%
Q2 2024+5.2%+5.1%-1.8%
Q1 2024-8.4%-10.7%-12.4%
Q4 2023-1.3%+0.4%-1.3%
Q3 2023+7.2%+8.8%+18.3%
Q2 2023-8.4%-7.2%-18.0%
Q1 2023+6.6%-1.5%+1.7%
Q4 2022-6.3%-4.2%-3.3%
Q3 2022+9.4%+10.3%+4.2%
Q2 2022+1.1%+0.5%+1.9%
Q1 2022-1.0%-0.4%-6.1%
Q4 2021+7.5%+8.9%+7.3%
Q3 2021+1.4%+6.7%+2.0%
Q2 2021+0.6%+3.4%+8.9%
Q1 2021+1.8%+5.1%+2.4%
Q4 2020-4.5%-3.0%+8.1%
Q3 2020+5.5%+12.5%+30.8%
Q2 2020-4.6%-5.2%-6.1%
Q1 2020-7.6%-10.0%+2.9%
Q4 2019-3.0%+0.4%-14.7%
Q3 2019-2.3%+2.1%+0.4%
Q2 2019-0.4%-0.8%-14.5%
Q1 2019-2.6%-1.0%-6.0%
Q4 2018-0.8%+0.6%+5.1%
Q3 2018+1.5%+5.9%+7.0%
Q2 2018-1.9%-3.0%-1.0%
Q1 2018+6.0%+5.8%+6.5%
Q4 2017+3.9%+4.2%+4.2%
Q3 2017+1.9%-1.0%-4.6%
Q2 2017-5.1%-5.9%-10.8%
Q1 2017+3.0%+2.3%-0.2%
Q4 2016+3.8%-0.6%+2.6%
Q3 2016-0.1%-0.1%+9.1%
Q2 2016-0.9%-5.1%+3.4%
Q1 2016+1.4%
Q4 2015+10.7%
Q3 2015+7.5%
Q2 2015+1.1%
Q1 2015+3.2%
Q4 2014-1.9%
Q3 2014+1.5%
Q2 2014+0.0%
Q1 2014+0.3%
Q4 2013+1.8%
Q3 2013-0.8%
Q2 2013-1.7%
Q1 2013-2.6%
Q4 2012+0.5%
Q3 2012+1.9%
Q2 2012-1.3%
Q1 2012+0.8%
Q4 2011+0.4%
Q3 2011+5.2%
Q2 2011-2.1%
Q1 2010-2.1%
Q1 2011+2.2%
Q4 2009+0.5%
Q4 2010+0.5%
Q4 2008+0.5%
Q3 2009+0.7%
Q3 2010+0.7%
Q2 2010+3.9%
Q2 2009+3.9%

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