We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cullen/Frost (CFR) Down Despite Solid Q1 Earnings & Revenues
Read MoreHide Full Article
Cullen/Frost Bankers, Inc. (CFR - Free Report) reported a positive surprise of 2.3% in first-quarter 2019. Earnings per share of $1.79 handily surpassed the Zacks Consensus Estimate of $1.75.
Top-line strength and higher loan balance were reflected in the quarter. Further, a strong balance balance-sheet position was a positive. However, elevated expenses and provisions remained major drags, escalating investors’ concerns. Therefore, shares of Cullen/Frost declined 4.2%, following the release.
The company reported net income available to common shareholders of $114.5 million compared with $104.5 million recorded in the prior-year quarter.
Revenue Growth Offsets Escalated Expenses
The company’s total revenues were $368 million in the first quarter, up 7% from the prior-year quarter. Further, revenues outpaced the Zacks Consensus Estimate of $365.6 million.
Net interest income on a taxable-equivalent basis climbed 7.4% year over year to $271.2 million. Additionally, net interest margin expanded 27 basis points (bps) year over year to 3.79%.
Non-interest income totaled $96.8 million, up 5.8% from the year-ago quarter. The increase was mainly due to rise in almost all components of income.
Non-interest expenses of $201.8 million flared up 2.6% year over year. Increase in almost all the cost components led to elevated expenses in the reported quarter, partially offset by lower other expenses.
Strong Balance Sheet
As of Mar 31, 2019, total loans were $14.4 billion, up 2.1% sequentially. Total deposits amounted to $26.3 billion, down 3% from the prior quarter.
Credit Quality: A Mixed Bag
As of Mar 31, 2019, provision for loan losses increased 59.4% on a year-over-year basis to $11 million. Yet, net charge-offs, annualized as a percentage of average loans shrunk 19 bps year over year to 0.19%. Allowance for loan losses, as a percentage of total loans, was 0.95%, down 17 bps from the prior-year quarter.
Non-performing assets were $97.4 million, down 28.7% from the year-ago quarter.
Steady Profitability and Capital Ratios
As of Mar 31, 2019, Tier 1 risk-based capital ratio was 13.00% compared with 13.01% recorded at the end of the prior-year quarter. Total risk-based capital ratio was 14.68%, up from 14.89% as of Mar 31, 2018. Furthermore, leverage ratio inched up to 9.35% from 8.62% as of Mar 31, 2018.
Return on average assets and return on average common equity were 1.48% and 14.08%, respectively, compared with 1.36% and 13.62% witnessed in the prior-year quarter.
Dividend Update
Cullen/Frost’s board of directors announced an increased cash dividend of 71 cents, up 6% from the prior pay out. The new dividend will be paid on Jun 14 to shareholders of record as of May 31, 2019.
Our Viewpoint
Cullen/Frost displayed an impressive performance in the first quarter. Growth in loan balance indicates continued organic growth. Though escalating expenses might continue to depress the company’s bottom-line growth, it remains well poised to benefit from easing margin pressure and higher fee income.
Cullen/Frost Bankers, Inc. Price, Consensus and EPS Surprise
Driven by top-line strength, Synovus Financial (SNV - Free Report) reported a positive earnings surprise of 8.9% in first-quarter 2019. Adjusted earnings of 98 cents per share beat the Zacks Consensus Estimate of 90 cents. Also, the reported figure came in 15.1% higher than the prior-year quarter tally.
BOK Financial (BOKF - Free Report) delivered a positive earnings surprise of 5.5% in the first quarter. Earnings per share of $1.54 outpaced the Zacks Consensus Estimate of $1.46. The bottom line, however, compared unfavorably with the prior-year quarter’s reported tally of $1.61. Results included certain one-time items.
Riding on higher revenues, Citizens Financial Group, Inc. (CFG - Free Report) recorded a positive earnings surprise of 4.5% in the March-end quarter. Adjusted earnings per share came in at 93 cents, beating the Zacks Consensus Estimate of 89 cents. Also, the reported figure improved 19.2% year over year. Results excluded one-time items of $4 million or 1 cent per share.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
Image: Bigstock
Cullen/Frost (CFR) Down Despite Solid Q1 Earnings & Revenues
Cullen/Frost Bankers, Inc. (CFR - Free Report) reported a positive surprise of 2.3% in first-quarter 2019. Earnings per share of $1.79 handily surpassed the Zacks Consensus Estimate of $1.75.
Top-line strength and higher loan balance were reflected in the quarter. Further, a strong balance balance-sheet position was a positive. However, elevated expenses and provisions remained major drags, escalating investors’ concerns. Therefore, shares of Cullen/Frost declined 4.2%, following the release.
The company reported net income available to common shareholders of $114.5 million compared with $104.5 million recorded in the prior-year quarter.
Revenue Growth Offsets Escalated Expenses
The company’s total revenues were $368 million in the first quarter, up 7% from the prior-year quarter. Further, revenues outpaced the Zacks Consensus Estimate of $365.6 million.
Net interest income on a taxable-equivalent basis climbed 7.4% year over year to $271.2 million. Additionally, net interest margin expanded 27 basis points (bps) year over year to 3.79%.
Non-interest income totaled $96.8 million, up 5.8% from the year-ago quarter. The increase was mainly due to rise in almost all components of income.
Non-interest expenses of $201.8 million flared up 2.6% year over year. Increase in almost all the cost components led to elevated expenses in the reported quarter, partially offset by lower other expenses.
Strong Balance Sheet
As of Mar 31, 2019, total loans were $14.4 billion, up 2.1% sequentially. Total deposits amounted to $26.3 billion, down 3% from the prior quarter.
Credit Quality: A Mixed Bag
As of Mar 31, 2019, provision for loan losses increased 59.4% on a year-over-year basis to $11 million. Yet, net charge-offs, annualized as a percentage of average loans shrunk 19 bps year over year to 0.19%. Allowance for loan losses, as a percentage of total loans, was 0.95%, down 17 bps from the prior-year quarter.
Non-performing assets were $97.4 million, down 28.7% from the year-ago quarter.
Steady Profitability and Capital Ratios
As of Mar 31, 2019, Tier 1 risk-based capital ratio was 13.00% compared with 13.01% recorded at the end of the prior-year quarter. Total risk-based capital ratio was 14.68%, up from 14.89% as of Mar 31, 2018. Furthermore, leverage ratio inched up to 9.35% from 8.62% as of Mar 31, 2018.
Return on average assets and return on average common equity were 1.48% and 14.08%, respectively, compared with 1.36% and 13.62% witnessed in the prior-year quarter.
Dividend Update
Cullen/Frost’s board of directors announced an increased cash dividend of 71 cents, up 6% from the prior pay out. The new dividend will be paid on Jun 14 to shareholders of record as of May 31, 2019.
Our Viewpoint
Cullen/Frost displayed an impressive performance in the first quarter. Growth in loan balance indicates continued organic growth. Though escalating expenses might continue to depress the company’s bottom-line growth, it remains well poised to benefit from easing margin pressure and higher fee income.
Cullen/Frost Bankers, Inc. Price, Consensus and EPS Surprise
Cullen/Frost Bankers, Inc. Price, Consensus and EPS Surprise | Cullen/Frost Bankers, Inc. Quote
Currently, Cullen/Frost flaunts a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Southwest Banks
Driven by top-line strength, Synovus Financial (SNV - Free Report) reported a positive earnings surprise of 8.9% in first-quarter 2019. Adjusted earnings of 98 cents per share beat the Zacks Consensus Estimate of 90 cents. Also, the reported figure came in 15.1% higher than the prior-year quarter tally.
BOK Financial (BOKF - Free Report) delivered a positive earnings surprise of 5.5% in the first quarter. Earnings per share of $1.54 outpaced the Zacks Consensus Estimate of $1.46. The bottom line, however, compared unfavorably with the prior-year quarter’s reported tally of $1.61. Results included certain one-time items.
Riding on higher revenues, Citizens Financial Group, Inc. (CFG - Free Report) recorded a positive earnings surprise of 4.5% in the March-end quarter. Adjusted earnings per share came in at 93 cents, beating the Zacks Consensus Estimate of 89 cents. Also, the reported figure improved 19.2% year over year. Results excluded one-time items of $4 million or 1 cent per share.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>