Transcript • Apr. 30, 2026 6:00 PM • Cullen/Frost Bankers Inc. (CFR)
Transcript
Apr. 30, 2026 6:00 PM
Cullen/Frost Bankers Inc. (CFR)
Sherry: Thank you for your patience. The conference will be beginning in just a few minutes. Again, thank you for your patience. We will be beginning in just a few minutes. Thank you. . . .
Unknown: . . . . . . . . Greetings.
Sherry: Welcome to Colin Frost Bankers Incorporated First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to A.B. Mendez, Senior Vice President and Director of Investor Relations. Thank you. You may begin.
A.B. Mendez: Thanks, Sherry. This afternoon's conference call will be led by Phil Green, Chairman and CEO, and Dan Geddes, Group Executive Vice President and CFO. Before I turn the call over to Phil and Dan, I need to take a moment to address the Safe Harbor provisions. Some of the remarks made today will constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 as amended. We intend such statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 as amended. Please see the last page of text in this morning's earnings release for additional information about the risk factors associated with these forward-looking statements. If needed, a copy of the release is available on our website or by calling the Investor Relations Department at 210-220-5234. At this time, I'll turn the call over to Phil.
Phil Green: Thanks, A.B. Good afternoon, everyone, and thanks for joining us. As is our practice, today we'll review the first quarter of 2026 results for Cullen Frost, and our Chief Financial Officer, Dan Geddes, will provide additional commentary and guidance updates before we take your questions. In the first quarter of 2026, Cullen Frost earned $169.3 million, an increase of 13.4%. compared to the $149.3 million earned in the first quarter of last year. For share earnings for the first quarter were $2.65, and that was an increase of 15.2% from the $2.30 in the first quarter last year. Our return on average assets and average common equity in the first quarter were 1.32% and 15.15% respectively. and that compares with 1.19% and 15.54% in the first quarter of last year. Average deposits in the first quarter were $42.2 billion, an increase from the $41.7 billion in the same quarter last year, and average loans grew to $22 billion in the first quarter, up from $20.8 billion in the first quarter of last year. In past quarters, we discussed the success of our organic branch expansion strategy in the Houston, Dallas, and Austin regions. I thought it would be helpful to point out that those results have excluded the successes of a growing number of new locations that we have opened in markets outside of those announced regions. For example, Since the initial launch of our first Houston expansion in late 2018, we've actually opened eight of these financial centers outside of those announced regions. That's the same number of locations we opened in our Houston 2.0 expansion. So going forward, we'll incorporate all the new locations as we talk about the performance of our branch expansion strategy and Dan will talk more about these numbers in his prepared remarks. Turning now to our consumer line of business, our consumer bank earned the J.D. Power Award for Customer Satisfaction in Consumer Banking in Texas for the 17th consecutive year. While we don't do this for the awards, this sustained consistency in delivering excellence signals that our culture remains strong even after tripling our locations in Dallas, doubling our locations in Houston, and doubling our footprint in the Austin region. It also sends a powerful message to prospects that Frost is here to help them. In an extremely competitive banking market with many new entrants, our industry-leading customer experience continues to drive what we believe is some of the strongest organic growth results in the industry. Year over year, consumer checking households grew 5.3%, and year over year, consumer loan balances increased 19%. Consumer loan growth totaled $154 million in the first quarter alone, which is nearly double Q1 2025 growth. This success was driven by our mortgage products, which grew $124 million in the quarter and reached $719 million in total outstanding balances. Looking at consumer deposits, I like to...
