- Cousins Properties delivered $0.70 a share in FFO for Q2, $0.01 above consensus.
- GAAP NOI grew 3.2% and cash NOI grew 1.2% during Q2 compared to last year.
- Net debt to EBITDA remains at an industry-leading 5.1x with strong liquidity and a well-laddered debt maturity schedule.
- Property tax expenses showed lumpiness but are forecasted to be up 2.8% for 2025 on a gross basis and down 4% net of accrual adjustments.
- Same-property net operating income increased 1.2% on a cash basis and 1.6% year-to-date.
- Second-generation cash rents increased 10.9% in the quarter and 5.4% year-to-date.
- The Link acquisition is immediately accretive with an initial cash yield of 6.7% and GAAP yield of 8.3%.
Explore Similar Insights
- Adjusted EBITDA increased by 128% or $66 million in the second quarter and more than doubled to $356 million in the first half.
- Adjusted EBITDA margin was 17% in the quarter and 23% year-to-date, an increase of nearly 500 basis points versus last year.
- Benefits and Insurance segment revenue was $102 million, up approximately 5%, with adjusted EBITDA up 21% and margin improving by 260 basis points.
- Financial Services segment revenue was $570 million, up approximately 84%, with adjusted EBITDA more than doubling to $111 million and margin improving by 250 basis points.
- Second quarter adjusted diluted earnings per share increased by 64% to $0.95 per share, and first half adjusted diluted earnings per share increased by 47% to $3.26 per share.
- Second quarter interest expense was higher by $22 million compared to last year, driven by higher outstanding debt associated with the acquisition.
- Second quarter revenue was $684 million, and first half revenue was $1.5 billion, a 63% and 66% increase, respectively, largely driven by the Marcum acquisition.
- Second quarter tax expense was $7 million higher than last year, with an effective tax rate lower by approximately 240 basis points compared to last year.
- Average deposits increased 3.1% year-over-year to $41.8 billion; average loans grew 7.2% to $21.1 billion.
- Commercial loans grew 4.9% year-over-year with CRE up 6.8%, energy loans up 22%, and C&I down about 1%.
- Consumer real estate loans grew 22% year-over-year to $3.3 billion, driven by second lien home equity and mortgage products.
- Cullen/Frost earned $155.3 million or $2.39 a share in Q2 2025, up from $143.8 million or $2.21 a share in Q2 2024.
- Expansion efforts contributed $2.76 billion in deposits, $2.03 billion in loans, and nearly 69,000 new households.
- New loan commitments totaled just under $2 billion in Q2, a 56% increase over Q1.
- Nonperforming assets declined to $64 million from $85 million at year-end; net charge-offs were $11.2 million, or 21 basis points annualized.
- Return on average assets and average common equity were 1.22% and 15.6%, compared to 1.18% and 17.08% in the prior year quarter.
- Total problem loans increased to $989 million, mainly due to multifamily loans, with expected resolutions in H2 2025.
- Adjusted funds from operations (AFFO) for Q2 2025 were $48.4 million or $1.71 per share, down 12% from the previous quarter.
- Balance sheet remains strong with $2.6 billion in primarily unencumbered gross assets and only $291 million in fixed rate debt.
- Liquidity is robust with over $190 million in cash and undrawn revolver, supporting future growth and investments.
- Repurchased 367,000 shares at an average price of $53.98 for $19.8 million, funded by cash and preferred stock issuance.
- Total revenues for Q2 2025 were $62.9 million, a 12% decrease from Q1 2025, primarily due to tenant defaults.
- Adjusted EBITDA rose significantly to $147 million from $79 million in Q2 2024.
- Baseline EBITDA increased 12% year-over-year to $117 million in Q2 2025, with trailing 12-month baseline EBITDA at $425 million.
- GAAP EPS for Q2 2025 was a loss of $0.05 per share, improved from a loss of $0.43 per share in Q2 2024.
- Investment management fees grew 39% in Q2 to a record $36 million, with fee-bearing capital reaching $9.2 billion.
- Q2 asset sales generated $55 million in gains, contributing to $275 million cash proceeds year-to-date from noncore asset sales.
- Allowance for credit losses to total loans was 1.28%, consistent with prior periods, and allowance to nonperforming loans improved to 175% from 122%.
- Effective tax rate was 14.6% for the quarter and 14.7% year-to-date.
- Efficiency ratio improved to 64.5% from 64.9% in the linked quarter and 72.6% in Q2 2024.
- Loan and lease portfolio grew at an annualized rate of 6.1%, with residential loans increasing by $42 million.
- Loan-to-deposit ratio was 98.6%, higher than targeted, with plans to reduce it to 90%-95%.
- Margin expanded by 13 basis points to 3.64% compared to the linked quarter.
- Net income for Q2 2025 was $11 million or $0.71 per diluted share, a 56% increase over Q2 2024 and a $847,000 increase over the linked quarter.
- Net interest income was $34.8 million, up 6.2% from the linked quarter, driven by a 13 basis point increase in earning asset yield to 5.84%.
- Noninterest expense was $27.5 million, a 1.3% increase over the first quarter due to merit increases and salary adjustments, but declined 3.2% from Q2 2024 due to fewer FTEs and reduced equipment expense.
- Noninterest income declined $1.3 million or 16.2% from the first quarter and $3.8 million from Q2 2024, mainly due to nonrecurring adjustments related to leasing operations.
- Pre-provision net revenue increased by $3.3 million or 37.5% over Q2 2024 and $770,000 or 6.7% over the linked quarter.
- Tier 1 leverage ratio was 8.8%, tangible common equity ratio was 6.7%, both improving post capital raise and acquisition.
- Adjusted EBITDAre remained relatively flat at $85 million.
- Cash basis NOI grew by 2.1% compared to the same period last year.
- Interest coverage ratio increased from 1.2x to 1.3x.
- Interest expense decreased by $1.9 million compared to Q1 2025 to $67.9 million, with expected further decline in Q3 to approximately $63.5 million.
- Net debt to total assets ratio increased slightly to 69.9%, net debt coverage ratio remained at 12x.
- NOI was $87.6 million and cash basis NOI was $84.7 million, both increasing year-over-year and sequentially.
- Normalized FFO increased 54% year-over-year to $13.8 million or $0.21 per share, at the high end of guidance.
- Occupancy ended the quarter at 94.3%, exceeding the national industrial average by 170 basis points.
- Variable debt to net debt ratio declined from 64.8% to 34.4% due to refinancing.
Dafinchi