Cullen/Frost Bankers Inc (CFR) News & EventsCFRNews & EventsCullen/Frost Bankers Inc

Cullen/Frost Expects 125 Basis Point Hike from Fed

Cullen/Frost said on its Q2 call that its current outlook includes 125 basis point hike for the Fed funds rate in the third quarter. "We expect net interest income growth for the full year to fall in the range of 4.75 to 5.25%. This reflects both an increase in narrowing of our prior guidance range of three and a half to 5% for net interest margin. We expect an improvement of about 10 to 13 basis points compared to our full year 2025 net interest margin of 3.66%. This narrows the range compared to the 10 to 15 basis point improvement last quarter. Full year average loan growth to be in the range of 7 to 8%. This increases the prior guidance of 6 to 7%. Regarding deposits, we expect full year average growth to be in the range of 2 to 3%, unchanged from prior guidance. Based on current projections, we expect non-interest income growth of 7.5 to 8.5%, up from the prior guidance range of 4 to 5%. Regarding non-interest expense, we expect growth to be in the range of 4.5 to 5% year over year, down from the prior guidance of 5 to 6%. Regarding net charge-offs, we expect full year 2026 to be in the range of 15 to 20 basis points of average loans," the company added.