Texas-based financial institution Cullen/Frost Bankers (NYSE: CFR) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 11.8% year on year to $567.8 million. Its GAAP profit of $2.39 per share was 3% above analysts’ consensus estimates.
Is now the time to buy Frost Bank? Find out by accessing our full research report, it’s free.
Frost Bank (CFR) Q2 CY2025 Highlights:
- Net Interest Income: $450.6 million vs analyst estimates of $443.7 million (13.6% year-on-year growth, 1.5% beat)
- Net Interest Margin: 3.7% vs analyst estimates of 3.7% (13 basis point year-on-year increase, 2 bps beat)
- Revenue: $567.8 million vs analyst estimates of $543.9 million (11.8% year-on-year growth, 4.4% beat)
- EPS (GAAP): $2.39 vs analyst estimates of $2.32 (3% beat)
- Market Capitalization: $8.62 billion
Company Overview
Tracing its roots back to 1868 when it was founded during Texas's post-Civil War reconstruction era, Cullen/Frost Bankers (NYSE: CFR) operates Frost Bank, a Texas-based financial institution providing commercial and consumer banking, wealth management, and insurance services.
Sales Growth
In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees.
Thankfully, Frost Bank’s 8% annualized revenue growth over the last five years was solid. Its growth beat the average bank company and shows its offerings resonate with customers, a helpful starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Frost Bank’s annualized revenue growth of 5.2% over the last two years is below its five-year trend, but we still think the results were respectable. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Frost Bank reported year-on-year revenue growth of 11.8%, and its $567.8 million of revenue exceeded Wall Street’s estimates by 4.4%.
Net interest income made up 75.9% of the company’s total revenue during the last five years, meaning lending operations are Frost Bank’s largest source of revenue.
Our experience and research show the market cares primarily about a bank’s net interest income growth as non-interest income is considered a lower-quality and non-recurring revenue source.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.
Key Takeaways from Frost Bank’s Q2 Results
We enjoyed seeing Frost Bank beat analysts’ revenue expectations this quarter. We were also happy its net interest income outperformed Wall Street’s estimates. On the other hand, its EPS was in line. Overall, we think this was a solid quarter with some key areas of upside. The stock remained flat at $133.68 immediately following the results.
Is Frost Bank an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
