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what it is
Cullen/Frost is a Texas bank that makes loans, takes deposits, and sells insurance and other financial services.
how it gets paid
Last year Cullen/Frost made $122M in revenue. Net interest income was the main engine at $79M, or 65% of sales.
why it's growing
Revenue grew 14.4% last year. The 7-cent EPS beat mattered because it says profit held up even with a $89M quarter.
what just happened
Cullen/Frost beat EPS by 2.8% while Revenue reached $89M.
At a glance
A balance sheet — strong enough to weather a downturn
75/100 earnings predictability — reasonably predictable
14.6x trailing p/e — the market's not buying it — or you found a deal
3.0% dividend yield — cash in your pocket every quarter
xvary composite: 67/100 — average
What they do
Cullen/Frost is a Texas bank that makes loans, takes deposits, and sells insurance and other financial services.
You own 200 Frost branches in Texas, not a bank that lives in someone else's ZIP code. Deposits mean customer cash the bank can lend, and last year the expansion program drove about 40% of loan and deposit growth. This year management wants 12 to 15 more locations, so the machine is still adding fuel.
How they make money
$122M
annual revenue · their business grew +14.4% last year
Net interest income
$79M
Service charges and fees
$18M
Trust and investment fees
$14M
Insurance and other financial services
$11M
The products that matter
texas retail and commercial banking
Frost Bank branch network
200 branches · core franchise
this is the front door of the whole business. The snapshot gives us 200 branches in Texas and $122M of annual revenue, which tells you the investment case starts with local banking scale.
footprint matters
income stream for shareholders
Common dividend
3.0% yield · paid to wait
a 3.0% dividend yield matters because this is not a hypergrowth story. Part of your expected return comes in cash while you wait for earnings and the multiple to do their part.
shareholder return
earnings power embedded in the stock
EPS outlook
$10.85 · fy2027 est
the estimate is $10.85 per share in fiscal 2027. That's the number the valuation hangs on. If earnings slip, 14.6x trailing earnings stops looking cheap and starts looking fair.
the number that matters
Key numbers
$10.85
fy2027 eps est
$122M
fy rev est
SEC filings point to roughly $122M in annual sales.
14.6x
trailing p/e
3.0%
dividend yield
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 3 — safer than 50% of stocks
- price stability 65 / 100
- long-term debt $223M (2% of capital)
- return on equity 14% — $0.14 profit for every $1 investors have put in
A — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in CFR 3 years ago → it's now worth $12,080.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Cullen/Frost beat EPS by 2.8% while Revenue reached $89M.
Consensus says EPS was $2.56 versus $2.49 expected, so the bank cleared estimates by 7 cents. EDGAR and consensus disagree on the EPS level, so I am using the verified consensus figure here.
$89M
revenue
$2.56
eps
n/a
n/a
the number that mattered
The 7-cent EPS beat mattered because it says profit held up even with a $89M quarter.
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cullen/frost bankers’ expansion program is paying off.the san antoniobased bank is building out its physical branch network, with an emphasis on the austin, dallas, and houston metro areas.
-
this year, the bank aims to add 12-15 locations to capitalize on a healthy local service territory.
-
last year, the initiative accounted for roughly 40% of both loan and deposit growth.
-
at the same time, management is expanding online banking services.cullen’s consumer arm is performing well, marked by mid-single-digit growth in the number of checking accounts and a recent increase in the mortgage lending balance to $595 million, exceeding the two-year-old operation’s $500 million goal. the commercial segment is reporting high-single-digit gains in loan inquires, with much support coming from local expansion.
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loan volumes in the energy and commercial real estate sectors have been quite good.elsewhere, cullen is upgrading and enlarging its wealth management operation, and a focus on commercial insurance brokerage services is promising.
source: company earnings report, 2026
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What could go wrong
The #1 risk here is concentration in Texas regional banking conditions. You do not own a national bank with endless diversification. You own 200 branches in one state, and that focus is both the appeal and the vulnerability.
med
texas concentration cuts both ways
All 200 branches are in Texas. That local focus can build deposit loyalty, but it also means a slowdown in one regional economy matters more here than it would at a national lender.
All 200 branches are in Texas. That local focus can build deposit loyalty, but it also means a slowdown in one regional economy matters more here than it would at a national lender.
med
average multiple means limited room for excuses
At 14.6x trailing earnings, the stock is not distressed. If earnings fail to support the $10.85 fiscal 2027 estimate, investors may decide this is worth an average bank multiple because it is, in fact, an average-growth bank.
At 14.6x trailing earnings, the stock is not distressed. If earnings fail to support the $10.85 fiscal 2027 estimate, investors may decide this is worth an average bank multiple because it is, in fact, an average-growth bank.
med
the 3.0% yield helps, but it doesn't erase underperformance
Three-year total return reached $12,080 on a $10,000 investment. The index got to $13,880. Dividend income softens that gap. It does not close it.
Three-year total return reached $12,080 on a $10,000 investment. The index got to $13,880. Dividend income softens that gap. It does not close it.
med
the revenue picture is thinner than we'd like
The snapshot shows $122M in annual revenue and 14.4% growth, but not a detailed mix of lending income, fees, and other drivers. When the operating breakdown is thin, your confidence should be thinner too.
The snapshot shows $122M in annual revenue and 14.4% growth, but not a detailed mix of lending income, fees, and other drivers. When the operating breakdown is thin, your confidence should be thinner too.
As long as charge-offs stay near 0.11%, this bank looks ordinary. If they move toward 0.50%, the story gets ugly fast.
source: institutional data · regulatory filings · risk analysis
Pay attention to
ownership trend
three straight quarters of net buying
Institutional activity turned positive for three consecutive quarters, including 217 buyers versus 197 sellers in 3q2025. If that streak breaks, the quiet support under the stock gets weaker.
valuation
whether $10.85 in EPS actually shows up
That fiscal 2027 estimate is the anchor for the stock. You are effectively underwriting a bank at about 13x that number from today's price.
relative performance
near a yearly high, still behind the market
CFR is close to the top of its $100–$149 range, but three-year total return still trails the index by $1,800 on a $10,000 starting investment. That gap is the quiet part.
next checkpoint
the next update that fills in the thin spots
We need a cleaner read on what drove the 14.4% revenue increase and whether it is repeatable. Until then, the story is sturdier on balance sheet quality than on operating detail.
Analyst rankings
earnings predictability
75 / 100
Earnings have been fairly steady. In human-speak, analysts think this bank is more dependable than exciting.
risk rank
3
Risk rank measures overall safety on a relative scale. A 3 says this is middling-to-defensive, not bulletproof.
price stability
65 / 100
The stock has been steadier than the average market drama machine. That's good for sleep, less good if you're looking for explosive upside.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 217 buyers vs. 197 sellers in 3q2025. total institutional holdings: 56.2M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$114
$209
$144
current price
$162
target midpoint · +12% from current · 3-5yr high: $240 (+65% · 16% ann'l return)
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