SunTrust analyst Jennifer Demba lowered her price target on Cullen/Frost to $105 after holding talks with its management and also reduced her FY19 and FY20 EPS views by 5c and 11c to $6.77 from $6.43 respectively. The analyst says she is turning more conservative on the company's net interest margins given the more challenging interest rate environment, even though its commitment to Houston market expansion is not diminished. Demba keeps her Buy rating on Cullen/Frost, stating that its loan growth should continue to be "relatively strong" given the health of the Texas economy and its "proactive calling efforts".

Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios at the end of Q1 were 13.41%, 13.89% and 15.35%, respectively. Q1 net interest income on a taxable-equivalent basis was $411.4M, down 3.4% vs. the prior year period. Net interest margin was 3.48% vs. 3.41% for 4Q23 and 3.47% for 1Q23. Q1 reported a credit loss expense of $13.7M and net charge-offs of $7.3M vs. a credit loss expense of $16.0M and net charge-offs of $10.9M for 4Q23 and a credit loss expense of $9.1M and net charge-offs of $8.8M for 1Q23. "The solid earnings for the first quarter show the results of our organic growth strategy and the hard work of our bankers," said CEO Phil Green. "The steady increase in loans and consistent growth in both commercial and consumer relationships reflect Frost's enduring strength and stability. We continue to make investments to fuel the sustained growth of our business into the future, including opening the second new location in our Austin expansion on April 1 of this year. I want to commend all the Frost bankers who continue to provide world-class service to more people throughout the state as we pursue our organic growth initiatives."