Cullen/Frost Bankers Hits an All-Time High
San Antonio-based Cullen/Frost Bankers (NYSE: CFR) reported its third-quarter earnings on Thursday, Oct. 27. The regional bank's results showed once again that the majority of its key metrics are heading in the right direction. Investors responded in kind by sending shares to a fresh all-time high.
Let's take a closer look at the bank's third-quarter results to get a better sense of what happened during the period.
Cullen/Frost Bankers Q3: The raw numbers
| Metric | Q3 2017 | Q3 2016 | Year-Over-Year Change |
|---|---|---|---|
| Net interest income | $264.4 million | $235.7 million | 12.2% |
| Noninterest income | $81.6 million | $82.1 million | (0.6%) |
| Net income | $91.1 million | $78.2 million | 16.5% |
| Earnings per share | $1.41 | $1.24 | 13.7% |
What happened with Cullen/Frost Bankers this quarter?
- Increases in loan volume and interest rates powered the big jump in net interest income.
- Earnings per share (EPS) of $1.41 topped Wall Street's expectation by $0.10.
- Quarterly net interest margin rose 20 basis points year over year to 3.73%.
- Average deposits grew 4.5% to $25.7 billion.
- Return on average assets increased 12 basis points when compared to the year-ago period and came in at 1.19%.
- Return on average common equity jumped to 11.7%.
- Book value per share grew 1% to $48.24 at quarter's end.
- The allowance for loan losses as a percentage of total loans was 1.21%. That was down 8 basis points year over year.
- On the downside, non-performing assets jumped by nearly half to $150 million at the end of the quarter of 2017.
- The company repurchased 1.1 million shares at an average price of $88.11 during the quarter. The board also authorized a new $150 million stock repurchase plan.
What management had to say
Cullen/Frost CEO Phil Green stated that he was pleased with the company's quarterly performance. He also stated that the bank's deposits remain high, thanks to the company's recent decision to raise money market interest rates.
Green also provided investors with some commentary related to Hurricane Harvey:
Looking forward
Investors appeared to be pleased with this report and bid up Frost's shares by more than 1% once trading started for the day. That might not sound like much, but Frost's stock was already trading at an all-time high prior to this earnings release. Thursday's gains seem warranted given the better-than-expected profit results.
In total, Frost Bankers' managed to report another solid quarter and also calmed any lingering worries that the market may have had related to Hurricane Harvey. With loans and deposits on the rise and interest rates poised to increase, investors continue to have reason to feel good about this bank's future.
10 stocks we like better than Cullen/Frost BankersWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Cullen/Frost Bankers wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of October 9, 2017
Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool recommends Cullen/Frost Bankers. The Motley Fool has a disclosure policy.