CULLEN/FROST REPORTS FOURTH QUARTER AND 2025 ANNUAL RESULTS

"We carry great momentum with us as we enter 2026 and continue executing on a number of strategic growth initiatives," said Cullen/Frost Chairman and CEO, Phil Green. "Frost bankers throughout the state remain squarely focused on making our customers' lives better and supporting their growth in an increasing range of ways over time.

"We continue to execute on our organic growth strategy, and continue to believe that it is a durable and scalable strategy that will fuel Frost's growth for years to come. During the fourth quarter, we opened new financial centers in the Austin, Dallas, and San Antonio markets, bringing us to a total of 10 new locations opened during 2025."

For the fourth quarter of 2025, net interest income on a taxable-equivalent basis was $471.2 million, up $37.5 million, or 8.6 percent compared to $433.7 million for fourth quarter of 2024. Average loans for the fourth quarter of 2025 increased $1.3 billion, or 6.5 percent, to $21.7 billion, from the $20.3 billion reported for the fourth quarter a year earlier, and increased 1.0 percent compared to $21.5 billion for the third quarter of 2025. Average deposits for the quarter increased $1.5 billion, or 3.5 percent, to $43.3 billion compared to $41.9 billion in last year's fourth quarter, and increased $1.3 billion, or 3.0 percent, compared to $42.1 billion for the third quarter of 2025. Compared to the third quarter of 2025, fourth quarter average non-interest-bearing deposits increased by 3.1 percent and average interest-bearing deposits increased by 3.0 percent.

For full year 2025, average total loans were $21.2 billion, an increase of approximately $1.4 billion, or 7.3 percent, from the $19.8 billion reported in 2024. Average total deposits for 2025 were $42.2 billion, up $1.2 billion, or 3.0 percent, compared to the $41.0 billion reported for full year 2024.

Noted financial data for the fourth quarter:

• The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios for Cullen/Frost at the end of the fourth quarter of 2025 were 14.06 percent, 14.50 percent, and 15.95 percent, respectively. Current capital ratios continue to be in excess of well-capitalized levels and exceed Basel III requirements.
• Net interest income on a tax-equivalent basis was $471.2 million for the fourth quarter of 2025, an increase of 8.6 percent compared to the $433.7 million reported for the fourth quarter of 2024. The net interest margin was 3.66 percent for the fourth quarter of 2025 compared to 3.53 percent for the fourth quarter of 2024 and 3.69 percent for the third quarter of 2025.
• Non-interest income for the fourth quarter of 2025 was $132.2 million, up $9.3 million, or 7.6 percent, from the $122.8 million reported a year earlier. Other non-interest income increased by $2.2 million, or 13.8% percent, compared to the fourth quarter of 2024. The increase was primarily related to an increase in income from customers' derivatives trading activity (up $1.4 million). Trust and investment management fees increased by $1.9 million, or 4.3 percent, compared to the fourth quarter of 2024. The increase was mainly related to an increase in investment management fees, up $2.3 million compared to the fourth quarter of 2024. Investment management fees are generally based on the market value of assets within customer accounts and are thus impacted by price movements in the equity and bond markets. Service charges on deposit accounts increased by $4.5 million, or 15.9 percent, compared to the fourth quarter of 2024.
• During the fourth quarter, we recognized several one-time expense items which in aggregate totaled $16.2 million. These one-time expense items included a payroll transition bonus associated with our change to a bi-weekly payroll cycle, a donation to the Frost Charitable Foundation, an additional accrual to increase our medical insurance reserve, and various sundry losses. These items were partly offset by an $8.5 million reversal of our accrual related to a special FDIC insurance assessment.
• Non-interest expense for the fourth quarter of 2025 was $371.7 million, up $35.5 million, or 10.6 percent, compared to the $336.2 million reported for the fourth quarter of 2024. Salaries and wages expense increased by $17.0 million, or 10.3 percent, compared to the fourth quarter of 2024. The increase in salaries and wages was primarily related to an increase in salaries due to annual merit and market increases and an increase in the number of employees. The increase in the number of employees was partly related to our investment in organic expansion in various markets. Salary and wage expense for the fourth quarter was also impacted by $4.2 million related to the aforementioned payroll transition bonus. Employee benefits expense increased by $8.0 million, or 28.1 percent, compared to the fourth quarter of 2024. The increase in employee benefits expense was primarily related to the aforementioned increase in medical/dental expense (up $5.3 million), 401(k) plan expense (up $1.7 million), and payroll taxes (up $682,000). Other non-interest expense increased $14.7 million, or 23.3%, compared to the fourth quarter of 2024. The increase was primarily related to the aforementioned increases in sundry and other miscellaneous expense (up $3.7 million) and donations expense (up $3.3 million); as well as professional services expense (up $2.6 million), among other things. The increase in sundry expenses was driven by a $4.0 million accrual related to a software platform that is no longer aligned with our long-term technology strategy. Net occupancy expense increased by $2.2 million, or 7.0 percent, compared to the fourth quarter of 2024. The increase in net occupancy expense for the quarter was mainly driven by increases in depreciation on buildings and leasehold improvements (up $732,000) and increases in property taxes (up $654,000). These increases were mainly driven by expenses associated with expansion branch locations.
• For the fourth quarter of 2025, the company reported a credit loss expense of $11.2 million and reported net charge-offs of $5.8 million, compared to a credit loss expense of $6.8 million and net charge-offs of $6.6 million for the third quarter of 2025. For the fourth quarter of 2024, the company reported a credit loss expense of $16.2 million and net charge-offs of $14.0 million. The allowance for credit losses on loans as a percentage of total loans was 1.29 percent at December 31, 2025, compared to 1.31 percent at September 30, 2025, and 1.30 percent at December 31, 2024. Non-accrual loans were $70.5 million at the end of 2025, compared to $44.8 million the previous quarter and $78.9 million at year-end 2024.
• During the fourth quarter, the company repurchased 653,913 shares at a total cost of $80.7 million, bringing us to a total of 1.20 million shares repurchased under the 2025 Repurchase Plan for the full year at an average price of $124.67, completing our $150 million authorization.

The Cullen/Frost board declared a first-quarter cash dividend of $1.00 per common share, payable March 13, 2026, to shareholders of record on February 27 of this year. The board of directors also declared a cash dividend of $11.125 per share of Series B Preferred Stock (or $0.278125 per depositary share). The depositary shares representing the Series B Preferred Stock are traded on the NYSE under the symbol "CFR PrB." The Series B Preferred Stock dividend is payable on March 16, 2026, to shareholders of record on February 27 of this year.

In addition, the company's board of directors approved a new share repurchase program with authorization to purchase up to $300 million of Cullen/Frost common stock over a one-year period expiring on January 27, 2027. Share repurchases under the authorization may be made through a variety of methods, which may include open market purchases, in privately negotiated transactions, block trades, accelerated share repurchase transactions, and/or through other legally permissible means. The timing and amount of any share repurchases under the authorization will be determined by management at its discretion and based on market conditions and other considerations. The share repurchase program may be suspended or discontinued at any time at the company's discretion and does not obligate Cullen/Frost to purchase any amount of common stock.

Cullen/Frost Bankers, Inc. will host a conference call on Thursday, January 29, 2026, at 1:00 p.m. Central Time (CT) to discuss the results for the quarter and the year. The media and other interested parties are invited to access the call in a "listen only" mode at 877-709-8150. Playback of the conference call will be available after 5:00 p.m. CT on the day of the call until midnight Sunday, February 1 at 877-660-6853, with the Conference ID# of 13757958. A replay of the call will also be available by webcast at the URL listed below after 5:00 p.m. CT on the day of the call.

Cullen/Frost investor relations website: https://investor.frostbank.com/ 

Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding company, headquartered in San Antonio, with $53.0 billion in assets at December 31, 2025. One of the 50 largest U.S. banks, Frost provides a wide range of banking, investments and insurance services to businesses and individuals across Texas in the Austin, Dallas, Fort Worth, Gulf Coast, Houston, Permian Basin, and San Antonio regions. Founded in 1868, Frost has helped clients with their financial needs during three centuries. Additional information is available at frostbank.com.

Forward-Looking Statements and Factors that Could Affect Future Results

Certain statements contained in this press release 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 specifically identified as such. In addition, certain statements may be contained in our future filings with the SEC, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of Cullen/Frost or its management or Board of Directors, including those relating to products, services or operations; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes", "anticipates", "expects", "intends", "targeted", "continue", "remain", "will", "should", "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

• The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board and the implementation of tariffs and other protectionist trade policies.
• Inflation, interest rate, securities market, and monetary fluctuations.
• Local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact.
• Changes in the financial performance and/or condition of our borrowers.
• Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs.
• Changes in estimates of future credit loss reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.
• Changes in our liquidity position.
• Impairment of our goodwill or other intangible assets.
• The timely development and acceptance of new products and services and perceived overall value of these products and services by users.
• Changes in consumer spending, borrowing, and saving habits.
• Greater than expected costs or difficulties related to the integration of new products and lines of business.
• Technological changes.
• The cost and effects of cyber incidents or other failures, interruptions, or security breaches of our systems or those of our customers or third-party providers.
• Acquisitions and integration of acquired businesses.
• Changes in the reliability of our vendors, internal control systems or information systems.
• Our ability to increase market share and control expenses.
• Our ability to attract and retain qualified employees.
• Changes in our organization, compensation, and benefit plans.
• The soundness of other financial institutions.
• Volatility and disruption in national and international financial and commodity markets.
• Changes in the competitive environment in our markets and among banking organizations and other financial service providers.
• Government intervention in the U.S. financial system.
• Political or economic instability.
• Acts of God or of war or terrorism.
• The potential impact of climate change.
• The impact of pandemics, epidemics, or any other health-related crisis.
• The costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals.
• The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) and their application with which we and our subsidiaries must comply.
• The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.
• Our success at managing the risks involved in the foregoing items.

In addition, financial markets, international relations, and global supply chains have been significantly impacted by recent U.S. trade policies and practices. Due to the rapidly evolving and changing state of U.S. trade policies, the amount and duration of any tariffs and their ultimate impact on us, our customers, financial markets, and the overall U.S. and global economies is currently uncertain. Nonetheless, prolonged uncertainty, elevated tariff levels or their wide-spread use in U.S. trade policy could weaken economic conditions and adversely impact the ability of borrowers to repay outstanding loans or the value of collateral securing these loans or adversely affect financial markets or the values of securities. To the extent that these risks may have a negative impact on the financial condition of borrowers or financial markets, it could also have a material adverse effect on our business, financial condition and results of operations.

Forward-looking statements speak only as of the date on which such statements are made. We do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

A.B. Mendez
Investor Relations
210.220.5234

or

Bill Day
Media Relations
210.220.5427

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SOURCE Cullen/Frost Bankers, Inc.