| Snowflake Score | |
|---|---|
| Valuation | 2/6 |
| Future Growth | 2/6 |
| Past Performance | 3/6 |
| Financial Health | 6/6 |
| Dividends | 5/6 |
CFR Stock Overview
Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that offers commercial and consumer banking services in Texas.
Cullen/Frost Bankers Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$132.22 |
| 52 Week High | US$147.39 |
| 52 Week Low | US$112.67 |
| Beta | 1.19 |
| 1 Month Change | 0.74% |
| 3 Month Change | 11.83% |
| 1 Year Change | 8.24% |
| 3 Year Change | 56.60% |
| 5 Year Change | 39.34% |
| Change since IPO | 5,249.59% |
Recent News & Updates
Cullen/Frost Bankers: A Well-Run But Far From Cheap Bank
Summary Cullen/Frost Bankers is the largest regional bank in Texas. Its customer-focused business model has given the bank some durable advantages versus its peers. Cullen/Frost should continue to enjoy strong long-term returns, but the current share price doesn't represent much immediate value. Cullen/Frost (CFR) is the largest regional bank headquartered in Texas. Operating from San Antonio, Cullen/Frost has been on a major expansion effort in recent years and is opening many branches in both Dallas and Houston to extend its footprint. The bank is also growing in terms of its product offerings; the bank is currently rolling out a mortgage lending division that will extend its range beyond its core commercial lending franchise. While Cullen/Frost may not be widely known nationally, it is a massive player within Texas. The bank's assets recently crossed the $50 billion threshold, and Cullen/Frost has a market cap of greater than $8 billion. This is a key player in one of the country's most economically dynamic states. I've followed CFR stock for quite a while. Unfortunately for value investors, Cullen/Frost tends to be one of those names that seems perpetually expensive, at least compared to other peer banks. That briefly changed in 2020, when the combination of crashing energy prices and fears around credit losses for Texas-specific banks caused a major decline in Cullen/Frost shares. I used that opportunity to establish a small position in CFR stock at a cost basis of $60. I wouldn't have a chance to add to the position at that price, however, as shares came roaring back in 2021. CFR data by YCharts Rather impressively, CFR stock is still down only 10% from its all-time high, and is one of the better-performing large regional banks out there. Over the long-term, I expect Cullen/Frost to continue outperforming its peer banks on whole. However, over the next year or two, I see reasons to think CFR stock will provide more pedestrian returns. Cullen/Frost Focuses On The Long Term Part of what makes Cullen/Frost unique is its focus on long-term management of its brand and franchise. Rather than competing to make every basis point of potential profit each quarter, the bank is willing to sacrifice some profit from time to time to ensure that it retains customers' trust and loyalty. What that means practically, for example, is that Cullen/Frost is willing to pay out more interest on deposits when rates go up, as they are doing now. On the bank's most recent conference call, one analyst asked why Cullen/Frost was taking so many new interest-bearing deposits at a time then interest rates are rising and the bank already has way more deposits on hand than it needs for making loans. Here's CEO Phil Green's response: This is a cultural decision and it's one that's based on experience too. A big part of our value proposition really rests on three things: That everyone's significant at Frost, that we give a square deal that will give you excellence at a fair price and we're a safe sound place to do business for employees and customers. And as corny as it sounds, we're just giving our customers a square deal. As we've seen interest rates move up it just makes sense for us to recognize that we're going to have a value proposition that customers can trust." Green went on to explain how Cullen/Frost raised its deposit interest rates in 2017 during that rate hiking cycle. This was unlike the too-big-to-fail banks, which tried to keep their interest costs at zero as long as possible. Green said, by contrast, that since Cullen/Frost was paying some interest on deposits, it was able to attract additional customers and earn loyalty from people that saw that the bank was giving them a fair deal. From a short-term profit maximization approach, this might not seem ideal. Cullen/Frost has almost always maintained a less than 50% of loan-to-deposit ratio. In 2021, this ratio fell to just 38%. This means Cullen/Frost has far more depositor capital on hand than it needs to support its loan book. The bank can put this excess capital into securities to earn yield, but this doesn't produce the same returns as when the bank originates its own loans. Cullen/Frost's net interest margin "NIM" has slumped from around 3% to the lows 2s recently before picking back up to 2.6% in the latest quarter. Cullen/Frost's investment in its brand and positioning has paid off. It is well-liked by customers, having the highest net promoter score of the banks based in Texas. While Cullen/Frost may have to give up short-term profits in volatile interest rate markets such as we have now to maintain that loyalty, over the long-term, reducing customer churn tends to lead to a more durable business through the full economic cycle. Another factor that is dragging on short-term profitability is that the bank has expanded heavily in Houston and Dallas. When a bank opens new branches, at first, these hit overall profit margins as the new branches will have far less loan production and deposits per employee than the existing branches where the bank is better known. It takes a few years for a new branch to reach the productivity levels you'd expect across the whole system. Valuation: Investors Are Rather Optimistic The big issue with CFR stock today is that it is priced near the top end of its ten-year valuation range. Yet, from a profitability standpoint, as measured by return on equity "ROE", Cullen/Frost is merely around its median historical ROE, as shown below: CFR Return on Equity data by YCharts An 11% ROE isn't bad by any means, especially given with the somewhat conservative nature in which the bank operates its business. However, Cullen/Frost is not at the sort of peak of performance that it saw in 2019 or prior to the 2008 financial crisis. It may get back there in a few years as its geographical expansion and new product offerings start to pay off. For now, however, Cullen/Frost is in the middle of its historical profitability profile. Yet, on a price-to-book value basis, CFR stock is near its highest point in many years: CFR Price to Book Value data by YCharts We can debate just how much of a premium to book value that a high-quality operator with a differentiated business model deserves. However, 2.6x book value is probably too high for a bank that averages an ROE in the 11% range. Even if we assume the ROE can climb toward 15% in coming years, 2.6x book value is still a fairly aggressive valuation for a bank at that ROE level. Perhaps this sort of steep premium is justified due to the booming nature of Texas' economy. That's true to an extent. The state is enjoying a big surge in manufacturing, for example, as American companies relocate supply chains closer to home in the post-2020 economic environment. Cullen/Frost should enjoy above average loan growth prospects going forward due to Texas' economic strength.
Cullen/Frost Bankers goes ex-dividend tomorrow
Cullen/Frost Bankers (CFR) declares $0.87/share quarterly dividend, 16% increase from prior dividend of $0.75. Payable Sept. 15; for shareholders of record Aug. 31; ex-div Aug. 30. See CFR Dividend Scorecard, Yield Chart, & Dividend Growth.
Cullen/Frost Bankers' (NYSE:CFR) Upcoming Dividend Will Be Larger Than Last Year's
The board of Cullen/Frost Bankers, Inc. ( NYSE:CFR ) has announced that the dividend on 15th of September will be...
Shareholder Returns
| CFR | US Banks | US Market | |
|---|---|---|---|
| 7D | -2.9% | -3.2% | -2.5% |
| 1Y | 8.2% | -26.1% | -23.2% |
Return vs Industry: CFR exceeded the US Banks industry which returned -26.1% over the past year.
Return vs Market: CFR exceeded the US Market which returned -23.2% over the past year.
Price Volatility
| CFR volatility | |
|---|---|
| CFR Average Weekly Movement | 3.1% |
| Banks Industry Average Movement | 3.4% |
| Market Average Movement | 6.8% |
| 10% most volatile stocks in US Market | 15.5% |
| 10% least volatile stocks in US Market | 2.8% |
Stable Share Price: CFR is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: CFR's weekly volatility (3%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1868 | 4,553 | Phil Green | https://www.frostbank.com |
Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that offers commercial and consumer banking services in Texas. It operates in two segments, Banking and Frost Wealth Advisors. The company offers commercial banking services to corporations and other business clients, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; commercial leasing; and treasury management services.
Cullen/Frost Bankers Fundamentals Summary
| CFR fundamental statistics | |
|---|---|
| Market Cap | US$8.48b |
| Earnings (TTM) | US$416.66m |
| Revenue (TTM) | US$1.43b |
20.4x
P/E Ratio2.3x
P/B RatioIs CFR overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| CFR income statement (TTM) | |
|---|---|
| Revenue | US$1.43b |
| Cost of Revenue | US$0 |
| Gross Profit | US$1.43b |
| Other Expenses | US$1.01b |
| Earnings | US$416.66m |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 6.50 |
| Gross Margin | 100.00% |
| Net Profit Margin | 29.23% |
| Debt/Equity Ratio | 71.6% |
How did CFR perform over the long term?
See historical performance and comparisonDividends
2.6%
Current Dividend Yield46%
Payout RatioValuation
Is CFR undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
2/6Valuation Score 2/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for CFR?
Other financial metrics that can be useful for relative valuation.
| What is CFR's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$8.48b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | n/a |
| Enterprise Value/EBITDA | n/a |
| PEG Ratio | 2x |
Price to Earnings Ratio vs Peers
How does CFR's PE Ratio compare to its peers?
| CFR PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 14.7x | ||
CMA Comerica | 10.2x | 3.3% | US$9.3b |
WBS Webster Financial | 22.2x | 38.8% | US$7.9b |
CBSH Commerce Bancshares | 17x | 4.8% | US$7.9b |
ZION Zions Bancorporation National Association | 9.3x | 2.8% | US$7.7b |
CFR Cullen/Frost Bankers | 20.4x | 10.0% | US$8.5b |
Price-To-Earnings vs Peers: CFR is expensive based on its Price-To-Earnings Ratio (20.4x) compared to the peer average (14.7x).
Price to Earnings Ratio vs Industry
How does CFR's PE Ratio compare vs other companies in the US Banks Industry?
Price-To-Earnings vs Industry: CFR is expensive based on its Price-To-Earnings Ratio (20.4x) compared to the US Banks industry average (9.4x)
Price to Earnings Ratio vs Fair Ratio
What is CFR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 20.4x |
| Fair PE Ratio | 14.6x |
Price-To-Earnings vs Fair Ratio: CFR is expensive based on its Price-To-Earnings Ratio (20.4x) compared to the estimated Fair Price-To-Earnings Ratio (14.6x).
Share Price vs Fair Value
What is the Fair Price of CFR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: CFR ($132.22) is trading below our estimate of fair value ($233.04)
Significantly Below Fair Value: CFR is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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Future Growth
How is Cullen/Frost Bankers forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?
Future Growth Score
2/6Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
10.0%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: CFR's forecast earnings growth (10% per year) is above the savings rate (1.9%).
Earnings vs Market: CFR's earnings (10% per year) are forecast to grow slower than the US market (14.8% per year).
High Growth Earnings: CFR's earnings are forecast to grow, but not significantly.
Revenue vs Market: CFR's revenue (14.3% per year) is forecast to grow faster than the US market (7.7% per year).
High Growth Revenue: CFR's revenue (14.3% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: CFR's Return on Equity is forecast to be low in 3 years time (13.3%).
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Past Performance
How has Cullen/Frost Bankers performed over the past 5 years?
Past Performance Score
3/6Past Performance Score 3/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
1.7%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: CFR has high quality earnings.
Growing Profit Margin: CFR's current net profit margins (29.2%) are lower than last year (31.3%).
Past Earnings Growth Analysis
Earnings Trend: CFR's earnings have grown by 1.7% per year over the past 5 years.
Accelerating Growth: CFR's earnings growth over the past year (1.8%) exceeds its 5-year average (1.7% per year).
Earnings vs Industry: CFR earnings growth over the past year (1.8%) underperformed the Banks industry 8.4%.
Return on Equity
High ROE: CFR's Return on Equity (11.3%) is considered low.
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Financial Health
How is Cullen/Frost Bankers's financial position? (This company is analysed differently as a bank or financial institution)
Financial Health Score
6/6Financial Health Score 6/6
Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans
Financial Position Analysis
Debt to Equity History and Analysis
Balance Sheet
Financial Institutions Analysis
Asset Level: CFR's Assets to Equity ratio (13.6x) is moderate.
Allowance for Bad Loans: CFR has a sufficient allowance for bad loans (504%).
Low Risk Liabilities: 93% of CFR's liabilities are made up of primarily low risk sources of funding.
Loan Level: CFR has an appropriate level of Loans to Assets ratio (32%).
Low Risk Deposits: CFR's Loans to Deposits ratio (37%) is appropriate.
Level of Bad Loans: CFR has an appropriate level of bad loans (0.3%).
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Dividend
What is Cullen/Frost Bankers's current dividend yield, its reliability and sustainability?
Dividend Score
5/6Dividend Score 5/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage
2.63%
Current Dividend Yield
Dividend Yield vs Market
| Cullen/Frost Bankers Dividend Yield vs Market |
|---|
| Segment | Dividend Yield |
|---|---|
| Company (Cullen/Frost Bankers) | 2.6% |
| Market Bottom 25% (US) | 1.7% |
| Market Top 25% (US) | 4.7% |
| Industry Average (Banks) | 3.4% |
| Analyst forecast in 3 Years (Cullen/Frost Bankers) | 2.6% |
Notable Dividend: CFR's dividend (2.63%) is higher than the bottom 25% of dividend payers in the US market (1.67%).
High Dividend: CFR's dividend (2.63%) is low compared to the top 25% of dividend payers in the US market (4.73%).
Stability and Growth of Payments
Stable Dividend: CFR's dividends per share have been stable in the past 10 years.
Growing Dividend: CFR's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (46%), CFR's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: CFR's dividends in 3 years are forecast to be well covered by earnings (37% payout ratio).
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Management
How experienced are the management team and are they aligned to shareholders interests?
6.5yrs
Average management tenure
CEO
Phil Green (67 yo)
6.5yrs
Tenure
US$5,186,313
Compensation
Mr. Phillip D. Green, also known as Phil, has been the Chairman and Chief Executive Officer of Cullen/Frost Bankers, Inc. since April 01, 2016 and served as its President since January 28, 2015 until March...
CEO Compensation Analysis
| Phil Green's Compensation vs Cullen/Frost Bankers Earnings |
|---|
| Date | Total Comp. | Salary | Company Earnings |
|---|---|---|---|
| Jun 30 2022 | n/a | n/a | US$417m |
| Mar 31 2022 | n/a | n/a | US$416m |
| Dec 31 2021 | US$5m | US$927k | US$432m |
| Sep 30 2021 | n/a | n/a | US$421m |
| Jun 30 2021 | n/a | n/a | US$409m |
| Mar 31 2021 | n/a | n/a | US$386m |
| Dec 31 2020 | US$4m | US$1m | US$320m |
| Sep 30 2020 | n/a | n/a | US$334m |
| Jun 30 2020 | n/a | n/a | US$349m |
| Mar 31 2020 | n/a | n/a | US$365m |
| Dec 31 2019 | US$5m | US$1m | US$432m |
| Sep 30 2019 | n/a | n/a | US$447m |
| Jun 30 2019 | n/a | n/a | US$453m |
| Mar 31 2019 | n/a | n/a | US$453m |
| Dec 31 2018 | US$5m | US$990k | US$444m |
| Sep 30 2018 | n/a | n/a | US$425m |
| Jun 30 2018 | n/a | n/a | US$401m |
| Mar 31 2018 | n/a | n/a | US$375m |
| Dec 31 2017 | US$4m | US$975k | US$354m |
| Sep 30 2017 | n/a | n/a | US$338m |
| Jun 30 2017 | n/a | n/a | US$325m |
| Mar 31 2017 | n/a | n/a | US$311m |
| Dec 31 2016 | US$4m | US$950k | US$295m |
| Sep 30 2016 | n/a | n/a | US$270m |
| Jun 30 2016 | n/a | n/a | US$265m |
| Mar 31 2016 | n/a | n/a | US$267m |
| Dec 31 2015 | US$3m | US$565k | US$270m |
Compensation vs Market: Phil's total compensation ($USD5.19M) is below average for companies of similar size in the US market ($USD8.66M).
Compensation vs Earnings: Phil's compensation has increased by more than 20% in the past year.
Leadership Team
Experienced Management: CFR's management team is seasoned and experienced (6.5 years average tenure).
Board Members
Experienced Board: CFR's board of directors are considered experienced (6.7 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: CFR insiders have only sold shares in the past 3 months.
Recent Insider Transactions
| Date | Value | Name | Entity | Role | Shares | Max Price |
|---|---|---|---|---|---|---|
| 04 Aug 22 | SellUS$14,812,040 | Patrick Frost | Individual | 115,544 | US$130.69 | |
| 02 May 22 | BuyUS$657,750 | Chris Avery | Individual | 5,000 | US$131.55 | |
| 02 Nov 21 | SellUS$343,808 | Robert Berman | Individual | 2,518 | US$136.54 | |
| 02 Nov 21 | SellUS$65 | Candace Wolfshohl | Individual | 0.5 | US$129.24 | |
| 29 Oct 21 | SellUS$1,007,943 | Candace Wolfshohl | Individual | 7,799 | US$129.24 |
Ownership Breakdown
| Owner Type | Number of Shares | Ownership Percentage |
|---|---|---|
| State or Government | 24,675 | 0.04% |
| Individual Insiders | 1,871,196 | 2.9% |
| Employee Share Scheme | 2,624,390 | 4.1% |
| General Public | 6,720,576 | 10.5% |
| Institutions | 52,887,142 | 82.5% |
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
| Ownership | Name | Shares | Current Value | Change % | Portfolio % | |
|---|---|---|---|---|---|---|
| 7,316,485 | $967.4m | 1.2% | 2.19% | |||
| 6,017,817 | $795.7m | 1.85% | 0.02% | |||
| 5,043,631 | $666.9m | 0.23% | 0.02% | |||
| 3,804,933 | $503.1m | -8.52% | 0.03% | |||
| 2,624,390 | $347.0m | 0% | no data | |||
| 2,512,398 | $332.2m | 4.31% | 0.02% | |||
| 2,205,612 | $291.6m | -0.49% | 1.74% | |||
| 1,702,000 | $225.0m | 0% | 0.23% | |||
| 1,598,451 | $211.3m | -2.35% | 0.22% | |||
| 1,338,369 | $177.0m | -6.6% | 0.02% | |||
| 1,038,710 | $137.3m | -28.34% | 0.05% | |||
| 834,478 | $110.3m | 7.56% | 0.17% | |||
| 735,932 | $97.3m | -0.12% | 0.01% | |||
| 700,162 | $92.6m | -36.14% | no data | |||
| 661,140 | $87.4m | -23.98% | 0.58% | |||
| 640,389 | $84.7m | 3.37% | 0.02% | |||
| 636,263 | $84.1m | 10.51% | 0.06% | |||
| 636,157 | $84.1m | 1.39% | 0.02% | |||
| 630,964 | $83.4m | 1.05% | 0.02% | |||
| 598,712 | $79.2m | -0.73% | 0.02% | |||
| 554,743 | $73.3m | -0.46% | 0.02% | |||
| 530,714 | $70.2m | 0% | 0.01% | |||
| 510,885 | $67.5m | 6.09% | 1.52% | |||
| 409,271 | $54.1m | 4.33% | 0.01% | |||
| 363,112 | $48.0m | -44.2% | 0.73% |
Company Information
Cullen/Frost Bankers, Inc.'s employee growth, exchange listings and data sources
Key Information
- Name: Cullen/Frost Bankers, Inc.
- Ticker: CFR
- Exchange: NYSE
- Founded: 1868
- Industry: Regional Banks
- Sector: Banks
- Implied Market Cap: US$8.479b
- Shares outstanding: 64.13m
- Website: https://www.frostbank.com
Number of Employees
Location
- Cullen/Frost Bankers, Inc.
- 111 West Houston Street
- San Antonio
- Texas
- 78205
- United States
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| CFR | NYSE (New York Stock Exchange) | Yes | Common Stock | US | USD | Jul 1975 |
| CFZ | DB (Deutsche Boerse AG) | Yes | Common Stock | DE | EUR | Jul 1975 |
| CFR.PRB | NYSE (New York Stock Exchange) | 4.450% DEP PFD B | US | USD | Nov 2020 |
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/10/02 00:00 |
| End of Day Share Price | 2022/09/30 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.