Cullen/Frost Bankers in San Antonio reported higher third-quarter profits on rising interest rates coupled with solid loan growth.
Net income for the $31 billion-asset company totaled $91.1 million, a 16.5% year-over-year increase. Earnings per share came to $1.41, beating analysts’ mean estimate of $1.31, according to FactSet Research Systems.
“Our strategy of growing our loan portfolio relationships continues to show progress, and we have also seen growth in our deposit relationships,” Chairman and CEO Phil Green said in a press release Thursday. “As interest rates continue their expected climb upward, Frost is well-positioned for long-term growth and building market share.”
Net interest income increased 12.2% to $264.4 million. The net interest margin expanded 20 basis points to 3.73%. Average loans increased 10%, to $12.6 billion.
The provision for loan losses was $11 million, compared with $8.4 million in the prior quarter and $5 million in the year-ago quarter. Net chargeoffs totaled $6.2 million, compared with $11.9 million in the prior quarter and $5 million a year earlier. Nonperforming assets stood at 0.48% of total assets, compared with 0.34% a year earlier.
Noninterest income fell less than 1% to $81.6 million. The company said that decline was largely the result of a $4.9 million pretax loss on securities transactions. Otherwise, noninterest income would have been up $4.3 million or 5.3%, as trust and investment management fees, investment fees and other noninterest income all increased over the year-ago period.
Average deposits increased 4.5% to $25.7 billion. Green said that after the company raised deposit rates this year, money market account balances reached their highest levels in two years, reversing a trend in balance declines that the bank had been experiencing.
Expenses increased 3.5% to $186.8 million.