Cullen/Frost Earnings: Continued Strong Results From Branch Expansion; 2025 Guidance Raised

Narrow-moat-rated Cullen/Frost reported strong first-quarter results, including net income to common shareholders of $149 million, or $2.30 per diluted share, on $560 million of taxable-equivalent revenue. Management increased its full-year net interest income and noninterest income guidance ranges by 1%. As we incorporate first-quarter results and updated guidance, we maintain our $114 fair value estimate and view the shares as fairly valued. We think some other regional banks offer more-attractive risk-adjusted returns. While we are closely monitoring the impact of tariffs on the US economy and US banks, we are holding our current projections for Cullen/Frost for now.