Cullen/Frost Bankers delivered first quarter results that prompted a positive market response, despite missing Wall Street’s revenue expectations. Management attributed solid non-GAAP profit growth to continued momentum in both consumer and commercial lending, underpinned by its organic expansion strategy across Texas. CEO Phil Green highlighted a 20.5% increase in average consumer loan balances, driven by growth in real estate lending, and noted that deposit trends were balanced across categories. Green emphasized the impact of the bank’s expansion efforts, which have added significant deposits and loan volume, stating, “The successes of the earlier expansion locations are now funding the current expansion effort.”

Is now the time to buy CFR? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Frost Bank’s Q1 Earnings Call

• Jared Shaw (Barclays) asked about the sustainability of deposit betas amid expected rate cuts. CFO Dan Geddes replied that current levels should hold if rate decreases proceed as anticipated and the bank will remain competitive.
• Casey Haire (Autonomous Research) questioned why loan growth guidance wasn’t raised despite a stronger pipeline. Geddes explained ongoing headwinds from commercial real estate payoffs and emphasized the bank’s discipline in pricing and structure.
• Catherine Mealor (KBW) inquired about the impact of bond portfolio purchases on net interest margin. Geddes pointed to higher-yielding recent investments and lower deposit costs as primary drivers of margin improvement.
• Manan Gosalia (Morgan Stanley) asked about consumer sensitivity to inflation and macroeconomic trends. Green noted stable spending and borrowing, attributing resilience to strong employment in Texas.
• Michael Rose (Raymond James) sought clarity on reductions in problem loans and allowance builds. Green described recent problem loan resolutions, while Geddes attributed the modest allowance increase to prudent adjustments for tariffs and recession risk.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be watching (1) the pace of loan and deposit growth as new financial centers come online, (2) the impact of rate cuts on net interest margin and funding costs, and (3) credit quality trends in commercial real estate as payoffs and refinancing activity evolve. Execution of technology investments and continued market share gains in Texas will also be important to monitor.

Frost Bank currently trades at $136.65, up from $116.46 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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