Cullen/Frost Equity Falls To $4.0 Billion As Bond Losses Swamp A $180 Million Quarterly Profit
Book value per share fell to $61.70 from $72.04 as unrealized securities losses grew, while the bank kept buying back stock.
Cullen/Frost Bankers, the San Antonio bank holding company behind Frost Bank, saw shareholders' equity fall to $4.0 billion at September 30 from $4.6 billion at June 30, its 10-Q filed Thursday shows. Net income of $180.2 million for the quarter was swamped by a $752.5 million after-tax hit to other comprehensive income, driven by losses on securities.
Bond losses outrun earnings
Accumulated other comprehensive loss, which mostly reflects unrealized losses on available-for-sale securities, reached $1.6 billion at September 30. It stood at $843.0 million at December 31, 2025, and at $851.7 million at June 30, per the prior 10-Q.
Gross unrealized losses on available-for-sale securities reached $2.0 billion, against $1.1 billion at the end of last year. Securities that have been under water for more than 12 months account for $1.5 billion of that total.
The bank says the losses stem from higher market interest rates over the yields available when it bought the bonds. It says it does not intend to sell the securities and that it expects their value to recover as they approach maturity.
Book value drops to $61.70
Book value per common share fell to $61.70 from $72.04 in the second quarter, according to the company's earnings release materials.
Regulatory capital is far less affected. Cullen/Frost opted out of counting most unrealized securities losses in its core capital, and its common equity Tier 1 ratio was 13.76% at September 30, versus 14.06% at year-end.
Operations were healthy. Net income available to common shareholders was $178.5 million, or $2.84 per diluted share, up from $172.7 million, or $2.67, a year earlier. Net interest income rose and average loans climbed 9.0% from a year earlier.
Buybacks continued
The bank bought back 92,745 shares for $15.2 million in the third quarter. Over nine months it repurchased 1,266,798 shares for $178.3 million, under a $300.0 million program that runs through January 27, 2027.
Cullen/Frost provides commercial and consumer banking, trust and investment management, insurance and other services across Texas. Its market value was about $9.8 billion at Thursday's report time.
The bank's shares are scheduled to move from the NYSE to the Texas Stock Exchange on November 12.
Sources
- 10-Q Filing — Cullen/Frost Bankers (CFR) — SEC EDGAR
- 10-Q Filing — Cullen/Frost Bankers (CFR), Q2 FY2026 filed 2026-07-30 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, a3q26formxex991xpressrelea.htm) — Cullen/Frost Bankers, filed 2026-10-29 — SEC EDGAR
- 8-K Filing — Cullen/Frost Bankers, filed 2026-10-29 (Items 3.01, 7.01, 9.01) — SEC EDGAR
- CULLEN/FROST REPORTS THIRD QUARTER RESULTS – Company Announcement - FT.com — Financial Times
- Frost Bank's Texas expansion keeps paying off in third quarter as loan, deposit growth accelerates — Yahoo Finance
- Cullen/Frost: Q3 Earnings Snapshot — Associated Press
- Cullen/Frost (CFR) Reports Q3 Earnings: What Key Metrics Have to Say — Yahoo Finance
- Cullen/Frost Bankers (CFR) Q3 Earnings and Revenues Surpass Estimates — Yahoo Finance
