Texas-based financial institution Cullen/Frost Bankers (NYSE: CFR) fell short of the market’s revenue expectations in Q1 CY2026, but sales rose 6.5% year on year to $574.8 million. Its GAAP profit of $2.65 per share was 7.1% 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) Q1 CY2026 Highlights:
- Net Interest Income: $438.5 million vs analyst estimates of $458.9 million (5.4% year-on-year growth, 4.4% miss)
- Net Interest Margin: 3.7% vs analyst estimates of 3.7% (3.2 basis point beat)
- Revenue: $574.8 million vs analyst estimates of $585.8 million (6.5% year-on-year growth, 1.9% miss)
- EPS (GAAP): $2.65 vs analyst estimates of $2.47 (7.1% beat)
- Market Capitalization: $8.99 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
Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities. Over the last five years, Frost Bank grew its revenue at a decent 11.5% compounded annual growth rate. Its growth was slightly above the average banking company and shows its offerings resonate with customers.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Frost Bank’s recent performance shows its demand has slowed as its annualized revenue growth of 7% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
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’s revenue grew by 6.5% year on year to $574.8 million, missing Wall Street’s estimates.
Net interest income made up 77% of the company’s total revenue during the last five years, meaning lending operations are Frost Bank’s largest source of revenue.
Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.
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Key Takeaways from Frost Bank’s Q1 Results
It was good to see Frost Bank beat analysts’ EPS expectations this quarter. On the other hand, its net interest income missed and its revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $142.22 immediately following the results.
Frost Bank may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
