stockrowWhat it does
Cullen/Frost Bankers is a financial holding company headquartered in San Antonio, Texas. Incorporated in 1977, it provides banking and other financial services through its subsidiaries. Phillip D. Green is its chairman and chief executive officer.
Its principal operating subsidiary, Frost Bank, serves businesses and individual consumers across Texas. Customers can keep money in checking and savings accounts, borrow for business or personal needs, and use online banking and payment services. Business loans cover purposes such as financing property, equipment, inventory and acquisitions. Consumer lending includes mortgages and home equity products.
Frost also provides services beyond everyday banking. Its trust business administers estates and trusts and manages investment accounts. Subsidiaries offer insurance, brokerage and investment management. Businesses can use treasury management services to handle cash flow, payments and liquidity, while institutional and public-sector customers can access capital markets services.
The company operates through regional management and local advisory boards, supported by centralized functions. At December 31, 2025, Cullen/Frost had consolidated total assets of $53.0 billion. Frost Bank had approximately 204 financial centers across Texas and approximately 1,760 ATMs, most operated with retailers under branding and licensing agreements.
How it makes money
Cullen/Frost earns much of its income from the difference between what it earns on loans and securities and what it pays on deposits and borrowings. This difference, called net interest income, represented 77.7% of total revenue during 2025. Its level depends on interest rates and on the volume and mix of earning assets and interest-bearing funding.
The company manages its operations through Banking and Frost Wealth Advisors, which overlap with its regional reporting structure. Banking includes commercial and consumer deposits and loans, treasury management, merchant services and capital markets activities. Frost Wealth Advisors provides trust and investment-related services. A third segment, Non-Banks, consists mostly of the parent holding company and other non-bank subsidiaries with little or no activity.
Cullen/Frost also seeks fee-based income from services including trust, brokerage, insurance and treasury management. Frost Bank provides ongoing account and transaction services to businesses and consumers; its insurance and investment subsidiaries provide services to their own customers. Prices vary by product: competition includes interest charged on loans, interest paid on deposits, and the pricing of trust, brokerage and insurance services.
Customer deposits are the company’s principal funding source, supplemented by borrowings and cash from maturing securities and loan repayments. The holding company’s principal source of income is dividends from its subsidiaries, subject to regulatory restrictions.
Net income available to common shareholders was $641.9 million in 2025; Cullen/Frost earned $178.5 million in the third quarter of 2026.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Banking | $121.6 million | 100.0% | 14.4% |
| Frost Wealth Advisors | $14,000.00 | 0.01% | 7.69% |
| Non-Banks | $0.00 | 0.00% | — |
Customers and how it sells
Cullen/Frost serves businesses, individuals, financial institutions, institutional investors, public-sector customers and nonprofit organizations. Its business customers operate in industries including energy, manufacturing, construction, retail, healthcare and transportation. The company says it is not dependent on any single industry or customer.
Frost Bank’s financial centers span the Austin, Dallas, Fort Worth, Gulf Coast, Houston, Permian Basin and San Antonio regions of Texas. Customers can also use online and mobile banking, ATMs and treasury platforms. Frost acts as a correspondent bank for approximately 178 financial institutions, primarily banks in Texas, providing services such as clearing checks, transferring funds and holding securities.
The bank also serves customers who live in Mexico or do business there. Those services include deposits payable in the U.S. in U.S. dollars, loans generally made in U.S. dollars, letters of credit and funds transfers.
Cullen/Frost says expansion locations accounted for 21% of new commercial relationships in the third quarter of 2026. The company also says its consumer checking accounts have grown 52% since its expansion program began in late 2018.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Banking | $121.6 million | 100.0% | 14.4% |
| Frost Wealth Advisors | $14,000.00 | 0.01% | 7.69% |
| Non-Banks | $0.00 | 0.00% | — |
Suppliers and costs
Cullen/Frost is a financial services provider rather than a manufacturer. It relies on external vendors for products and services needed in day-to-day operations, including information technology. Its ATM network also uses branding and licensing agreements with retailers.
Deposits and borrowings are funding sources on which the company incurs interest expense. In the third quarter of 2026, the cost of interest-bearing deposits was 1.73%, up from 1.61% in the second quarter. The company also incurs non-interest expenses, including compensation, marketing, technology and other operating costs.
For the third quarter of 2026, Cullen/Frost recognized an additional $4.7 million in incentive compensation expense accruals, while marketing and advertising expense rose $3.3 million from the previous quarter. The company expects non-interest expense growth to be in the 5% range year over year for full-year 2026, including the effect of those incentive accruals and advertising costs.
The company also records credit loss expense and maintains allowances for expected credit losses on loans and other financial exposures.
- Revenue$2.9B
- Cost of revenue−$684.6M
- Selling, general and administrative−$1.5B
- Operating income$771.7M
Competitive position
Cullen/Frost competes for loans and deposits with commercial banks in its Texas markets. It also competes with credit unions, finance and leasing companies, securities firms, insurance providers, brokerages, private funds and financial technology firms. No individual competing companies are named.
Competition covers customer service and responsiveness, the availability of products, loan and deposit rates, and the pricing of trust, brokerage and insurance services. Some competitors have greater resources, higher lending limits or services Cullen/Frost does not provide. The company says smaller banks have been more aggressive on loan structure for commercial customers, and Cullen/Frost is willing to compete on price for relationships.
The company’s regional management and advisory boards connect it with local markets. Its financial centers, digital banking and broader services give customers several ways to work with Frost. Cullen/Frost says its treasury platform is used by approximately 7% of its commercial customers.
Our reading: Local relationships and the branch network offer a basis for retaining and attracting customers, but they are not exclusive and face competition on rates and service. Our reading: Offering banking, treasury, insurance and wealth services can deepen relationships, although the disclosed treasury-platform usage also shows that adoption across the commercial customer base is limited.
Growth opportunities
Cullen/Frost’s operating objectives include expanding and diversifying within its markets, increasing fee-based income and growing internally. The company is focused on organic growth, while also considering acquisitions of financial institutions, branches and financial services businesses.
Branch expansion is one part of that strategy. Cullen/Frost says its expansion branches had grown to $3.25 billion in loans and $4 billion in deposits by the third quarter of 2026. It opened one new Dallas-area location since its prior update and planned four more openings by year-end. The company expects to open 12 locations in 2026 and had further openings planned for 2027, while its budget for 2027 remained to be completed.
Consumer real estate lending is another area of growth. Cullen/Frost says its mortgage portfolio exceeds $1 billion and that it offers mortgages as part of broader customer relationships. It also plans to invest in wealth management and add wealth advisors.
For full-year 2026, the company expects net interest income growth of 5% to 5.5%, average loan growth of 8 to 8.5%, and non-interest income growth of 8.5% to 9%. Its outlook includes a 125 basis point hike in the federal funds rate in December.
- $1.4BFY2021
- $1.9BFY2022
- $2.6BFY2023
- $2.8BFY2024
- $2.9BFY2025
Structural risks
- Interest rates and funding: Earnings and cash flows depend largely on net interest income. Changes in rates and in the mix of loans, securities and funding affect that income. Cullen/Frost also needs liquidity to meet deposit and debt obligations as they come due.
- Credit and real estate: Lending carries credit risk, and allowances for credit losses may be insufficient. Commercial real estate mortgage loans comprised approximately 47.1% of the loan portfolio at December 31, 2025. The company is also watching older multifamily projects affected by lower rents, concessions and higher expenses.
- Texas exposure: Cullen/Frost’s success depends substantially on economic conditions in Texas and its local markets. At December 31, 2025, it had $1.1 billion of energy loans, exposing it to volatility in crude oil prices.
- Operations and security: The company relies on information systems and external vendors for daily operations and sensitive data. System failures, security breaches, cyber fraud and other fraudulent activity could affect the business.
- Regulation: Cullen/Frost and its subsidiaries face extensive federal and state regulation. Rules can restrict bank dividends to the holding company, and changes in law or regulatory policy could increase costs or limit business opportunities.
Bottom line
Our reading
Our reading: Cullen/Frost is a Texas-centered banking business whose deposits fund lending and securities, with wealth and insurance services adding other income sources. [item1] [item7] Its branch expansion is bringing in customers and loans, but results remain exposed to interest rates, commercial real estate credit and the Texas economy. [call_prepared] [item1a]