Cullen/frost Bankers, Inc. · NYSE:CFR
Cullen/frost Bankers — Q4 2024 Earnings Presentation
23 slides from Cullen/frost Bankers's earnings presentation, Feb 12, 2025
Slide 1: Cullen/Frost Bankers, Inc. December 31, 2024
Phillip D. Green, Chairman and Chief Executive Officer | Dan Geddes, Chief Financial Officer Cullen/Frost Bankers, Inc. December 31, 2024
Slide 2: Cautionary Statement
2 Cautionary Statement Certain statements contained in this Annual Report on Form 10-K 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
Slide 3: Overview: Cullen/Frost Bankers
3 OVERVIEW Cullen/Frost Bankers • Headquartered in San Antonio, Texas • Founded in 1868 by T.C. Frost • Provides a wide range of banking, investments, and insurance products and services to businesses and individuals • Branch footprint located exclusively in Texas throughout eight markets with nearl
Slide 4: Overview: Company Highlights and Awards
4 OVERVIEW Cullen/Frost Bankers Source: S&P Global Market Intelligence Note: Market and financial data as of December 31, 2024 Award Winning Value Proposition J.D. Power Company Highlights Listing NYSE:CFR Market Capitalization ($ billions) 8.6 Total Assets 52.5 Trust Assets 51.4 Total Loans 20.8 To
Slide 5: Historical Performance: 15-Year Stock Price Performance
5 OVERVIEW Historical Performance 15-Year Stock Price Performance Total Return Source: S&P Global Note: Market data as of December 31, 2024 23.7% 37.3% 90.0% 168.5% 24.5% (16.0)% 31.4% 145.4% CFR S&P 500 Regional Bank Index 1yr 5yr 10yr 15yr -50% 0% 50% 100% 150% 200%
Slide 6: Historical Performance: Dividends - Consecutive Years of Increases
6 OVERVIEW Historical Performance Dividends - 31 Consecutive Years of Increases $0.04 $0.17 $0.29 $0.40 $0.48 $0.58 $0.68 $0.76 $0.84 $0.88 $0.94 $1.04 $1.17 $1.32 $1.54 $1.66 $1.71 $1.78 $1.83 $1.90 $1.98 $2.03 $2.10 $2.15 $2.25 $2.58 $2.80 $2.85 $2.94 $3.24 $3.58 $3.74 1993 1994 1995 1996 1997 199
Slide 7: Relationship Banking: Our Mission
7 RELATIONSHIP BANKING Our Mission We will grow and prosper, building long-term relationships based on top-quality service, high ethical standards and safe, sound assets. INTEGRITY Steadfast adherence to an ethical code. CARING Feeling and exhibiting concern for others. EXCELLENCE Commitment to bein
Slide 8: Our Banking Markets
8 OVERVIEW Our Banking Markets Compelling Texas market demographics: • Population of 31 million ranks 2nd in the U.S. • 2025-2030E projected population growth of 5.6% vs. 2.4% national • 52 Fortune 500 companies headquartered in Texas • Between 2022 and YTD 2024, there have been 62 headquarter reloc
Slide 9: Technology Highlights
9 Technology Highlights • In Q4-2024, 46% of consumer deposit accounts came from our online channel • Highest-rated consumer banking mobile app of all U.S. banks • Partnered with Atomic and introduced Direct Deposit Switch to simplify direct deposit transfers for Frost customers • 24/7 customer phon
Slide 10: Diversified Loan Portfolio
10 Diversified Loan Portfolio Period End Growth in Energy, Non-energy Loans Loan Composition (Q4-2024) Q4-2024 Period End Loans to Deposits: 48.6% Source: 2024 10-K Since peak (1Q15)(Y/Y) 2024 CAGR Energy Loans 20.5% (4.8)% Non-Energy Loans 9.7% 7.8% Total Loans 10.3% 6.5% 5.4% Energy Loans Non-Ener
Slide 11: Commercial Real Estate Portfolio
11 Commercial Real Estate Portfolio 1. Commercial real estate portfolio diversified across Texas regions and underlying collateral type a. Broad array of industries supporting economic activity and stability b. Balanced concentrations across key Texas regions c. Well distributed mix of CRE by proper
Slide 12: Commercial Real Estate Portfolio - Investor Office
12 Commercial Real Estate Portfolio - Investor Office As of December 31, 2024, Office represented 9.1% of total loans outstanding, and 6.0% of total commitments. Investor Office represented 4.9% of total loans outstanding, and 3.3% of total commitments. Facts and Figures re: Frost's Investor Office
Slide 13: Energy Loan Portfolio
13 $277 — $317 6 Special Mention Loans Classified Loans Peak Q1-16 Q4-24 Energy Loan Portfolio • Lending to clients in the energy sector is a core competency of Frost Bank that spans decades • Today’s portfolio is well balanced with the majority of loans in production and secured by proven, develope
Slide 14: Credit Quality
14 $ (0 0 0 s) Energy C&I CRE Consumer Non-Accruals ACL 0 50,000 100,000 150,000 200,000 250,000 300,000 Credit Quality • Frost has a long-standing culture of conservative underwriting and prudent risk management • Our commitment to relationship banking has served us well—notably, Frost is the only
Slide 15: Credit Quality: Net Charge-Offs Through the Cycle
15 Credit Quality • Strong record of prudent risk management reflected in ratio of net charge-offs to average loans since 2007 • Net charge-offs in 2020 represented the last of problem energy credits from previous energy down-cycle; we have seen net recoveries of previously charged-off energy loans
Slide 16: Strong Capital Position
16 13.62% 14.07% 15.53% 8.63% 12.31% 12.74% 14.86% 9.86% Common Equity Tier 1 Tier 1 Capital Total Capital Tier 1 Leverage Strong Capital Position Cullen/Frost Capital Ratios as of December 31, 2024. Frost Bank maintains the capacity to pay $1.2 billion of dividends to Cullen/Frost 1 CFR Q4-24 Curre
Slide 17: Funding and Liquidity Profile
17 Funding and Liquidity Profile • Primarily deposit funded institution with limited wholesale, short- term, or long-term borrowings • 48.3% loan to deposit ratio • Solid liquidity position with cash and securities in the range of 50%–60% of earning assets since 2012 FY-24 Average Liabilities and To
Slide 18: Deposit Portfolio
18 Deposit Portfolio • Highly focused on winning customers’ core transactional accounts • Non-interest-bearing has averaged 39% of total deposits over the 20 years through 2024 • Goal to drive consistent, balanced growth in deposits and loans • Top quality customer service results in low customer at
Slide 19: Deposit Portfolio: Composition and Growth
19 Deposit Portfolio Deposit Composition (2024 Avg.) Deposit Growth Trends 1 CAGR compares period ending balances for 2020 to 2024. Non-Interest Bearing: 33.8% Savings & Interest on Checking: 23.7% Money Market Accounts: 27.4% Time Accounts: 15.1% 5-Year CAGR (1) 2024 Y/Y Avg. Growth 2024 Avg. Balan
Slide 20: Investment Portfolio
20 Investment Portfolio • High quality $18.6 billion securities portfolio comprised of municipals (37%), Treasuries (19%), MBS and other securities1 (44%) • Average fully taxable-equivalent yield of 3.38% in 2024 (4.31% for tax-exempt securities) • Portfolio duration of 5.7 years as of December 31,
Slide 21: Multiple Sources of Revenue
21 Multiple Sources of Revenue • In 2024 non-interest income comprised 22.2% of total revenue • Primary drivers of fee income include: – Trust and investment management fees (36.0% of non-interest income) – Total trust assets of $51.4 billion ($26.2 billion managed) at December 31, 2024 – Deposit se
Slide 22: Consistent Profitability Over the Cycle
22 Consistent Profitability Over the Cycle • Consistent profitability through Great Recession with no quarterly or annual net loss • History of strong returns on average common equity • The first bank in the nation to turn down TARP bailout funds Return on Average Assets Return on Average Common Equ
Slide 23: Loan Pricing
23 Loan Pricing Average Spread to Ameribor and SOFR (New and Renewed Loans) Average Spread to Prime (New and Renewed Loans) 3.06% 2.73% 2.46% 2.39% 2.31%2.25% 2.40% 2.40% 2.41% Ameribor SOFR 2020 2021 2022 2023 2024 0.80% 0.63% 0.46% 0.55% 0.48% 2020 2021 2022 2023 2024