The following is a summary of the Cullen/Frost Bankers, Inc. (CFR) Q1 2024 Earnings Call Transcript:
Financial Performance:
Cullen/Frost reported Q1 earnings of $134 million or $2.06 per share, a decrease compared to earnings of $176 million or $2.70 per share in the same quarter last year.
Q1 results were impacted by an additional FDIC insurance surcharge accrual of $7.7 million.
The company experienced a return on average assets and average common equity in Q1 of 1.09% and 15.22%, respectively, and a net interest margin percentage of 3.48%, up 7 basis points from the previous quarter.
The bank recorded average deposits in the first quarter of $40.7 billion, down 4.8% from last year, while average loans grew 10.4% to $19.1 billion compared to the previous year.
The bank anticipates full-year average loan growth in the high single digits and a slightly upward trend in the net interest margin percentage each quarter for the remainder of the year.
Business Progress:
Cullen/Frost reports success in its organic growth strategy, achieving positive results from expansions in the Houston and Dallas markets, exceeding deposit and loan goals.
The bank added 6,600 net new checking accounts and saw an increase in average loan balances in Q1.
The new marketing campaign and brand refresh were introduced with the aim of emphasizing customer service excellence.
The company's credit quality is deemed to be in good health, with net charge-offs and new non-performing loans at acceptable levels.
The bank grew by $145 million in new loan balances and $100 million in deposits from new relationships in the first quarter; a quarter of the loan growth is attributed to new customers.
The company anticipates company-specific challenges on the C&I side, but they are confident these issues will be resolved, part of the normal risk in the banking business.
More details: Cullen/Frost Bankers IR
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