- Executed $377 million CRE loan sale in April and $481 million securitization in June, reducing CRE concentration from over 600% to 365% of regulatory capital.
- Plan to complete an additional securitization before year-end, aiming to fully exit the CRE held-for-sale portfolio by 2025.
- Balance sheet actions limited positive impact on net interest income but expected to improve net interest margin (NIM) to 1.8%-1.9% by end of 2025.
- Focus on reducing CRE concentration to mitigate volatility and enhance earnings stability.
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- Management emphasized ongoing efforts to diversify the loan portfolio, including a $22 million increase in commercial and industrial loans, a $12 million rise in construction loans, and a $76 million increase in consumer loans, primarily credit-enhanced.
- The strategy aims to improve risk-adjusted returns and drive earnings growth, with a focus on higher-yield asset classes.
- Loan pipeline remains healthy with over $40 million in commercial lending letters of intent, expected to yield above 7%.
- Portfolio shifts are aligned with long-term value creation and supporting local businesses.
- Quarterly loan growth reached 8% annualized, driven by strong new loan production in LIHTC and traditional banking segments.
- Growth impacted by runoff of M2 equipment finance loans, with a net effect of approximately 8%-10% gross loan growth for the second half of the year.
- Management remains optimistic about continued solid loan growth, with a focus on expanding in CRE and C&I sectors.
- Loan paydowns increased by $500 million over the previous two quarters, which contributed to below-expected loan growth in Q3 2025.
- Management reviewed loan booking and draw activity, noting a slight decline in the pipeline as a percentage of projected payoffs.
- Despite softer loan growth, the pipeline is 40% higher than a year ago, indicating strong future potential.
- Loan payoffs include some low fixed-rate loans that are being paid off through asset sales, which is viewed positively.
- Management expects a solid loan closing quarter in Q4, with all markets now profitable for the first time since inception.
- The company emphasizes that not all payoffs are negative, especially those related to asset sales at favorable rates.
- Commercial revenue increased by 33%, driven by broad-based strength across asset classes, notably industrial and multifamily.
- All-time record in National Commercial Services division for fee per file, with a 30% increase in fee per file.
- Strong pipeline with high-quality, large deals, including 11 transactions over $1 million.
- Anticipation of deal acceleration in Q4 due to upcoming renewable energy tax incentives, with a positive outlook for the second half of the year.
- The company achieved 9% growth in originations driven by granular data, analytics, and product innovations despite maintaining a disciplined, tight credit box.
- Management emphasized their ability to attract high-quality borrowers, with over 60% of new originations from top credit tiers, highlighting a focus on credit quality and risk management.
- 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.
- Achieved full-year plan to grow commercial loans by approximately $3 billion in 2025, with backlogs in institutional and middle market segments continuing to build.
- Commercial loan growth was broad-based across industries and regions, driven by new client acquisitions.
- Loan growth is expected to be supported by strong pipelines and active client engagement, with a focus on sectors like renewables, affordable housing, healthcare, and public sector.
- Guidance anticipates continued C&I loan growth, with some offset from CRE and residential mortgage paydowns, and potential upside from CapEx and bonus depreciation.
- First Citizens highlighted ongoing progress on their 2025 strategic priorities, including platform consolidation and relationship team integration, which are beginning to show positive momentum.
- The company announced the appointment of Diane Morais to the Board of Directors, emphasizing her extensive experience and alignment with the company's customer-centric approach.
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