CULLEN/FROST BANKERS, INC.
For the period ended Dec 31, 2025. Filed Feb 5, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 5, 2026
CFR$155.23-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-06.
0000039263-25-000017
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-05.
0000039263-26-000011
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 211 previous paragraphs and 214 current paragraphs.
115 unchanged; 86 reworded; 10 added; 9 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 24 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
In addition, financial markets, international relations, and global supply chains have been significantly impacted by recent U.S. trade policies and practices. Due to the rapidly evolving and changing state of U.S. trade policies, the amount and duration of any tariffs and their ultimate impact on us, our customers, financial markets, and the overall U.S. and global economies is currently uncertain. Nonetheless, prolonged uncertainty, elevated tariff levels or their wide-spread use in U.S. trade policy could weaken economic conditions and adversely impact the ability of borrowers to repay outstanding loans or the value of collateral securing these loans or adversely affect financial markets or the values of securities. To the extent that these risks may have a negative impact on the financial condition of borrowers or financial markets, it could also have a material adverse effect on our business, financial condition and results of operations.
Current report
Service Charges on Deposit Accounts. Service charges on deposit accounts for 2025 increased $15.3 million, or 14.4%, compared to 2024. The increase was primarily related to increases in overdraft charges on consumer and, to a lesser extent, commercial accounts (up $7.6 million and $1.1 million, respectively), and commercial service charges (up $7.2 million).
Current report
Other Non-Interest Income. Other non-interest income for 2025 increased $3.3 million, or 6.4%, compared to 2024. The increase was primarily related to increases in gains on the sale of foreclosed and other assets (up $3.0 million) and income from customer securities trading and derivatives trading activities (up $1.8 million and $791 thousand, respectively), partly offset by a decrease in public finance underwriting fees (down $1.7 million), among other things. The fluctuations in public finance underwriting fees and income from customer derivative and securities trading activities were primarily related to variations in transaction volumes. Gains on the sale of foreclosed and other assets during 2025 included a $2.5 million gain related to the sale of a foreclosed real estate property during the first quarter and $768 thousand in gains related to sales of certain lots of land during the fourth quarter.
Current report
In December 2025, based upon the first six quarterly collections of the special assessment and anticipated collections for the seventh quarterly special assessment, the FDIC issued an interim final rule to amend the collection of the special assessment to reduce the eighth quarterly assessment rate from 3.36 basis points to 2.97 basis points. Because the cumulative amount collected through the initial eight quarter special assessment period is projected to equal the FDIC’s loss estimate, the additional two quarter extended assessment period was removed. In light this interim final rule, we reversed a total of $9.7 million ($7.7 million after tax) of our special deposit insurance assessment accrual based upon a decrease in expected future payments related to the special deposit insurance assessment. The interim final rule also requires the FDIC to provide an offset to regular quarterly deposit insurance assessments for institutions subject to the special assessment if the aggregate amount collected exceeds estimated losses following the resolution of pending litigation, and again following the termination of the receiverships. As provided for in the special assessment rule, if losses at the termination of the receiverships exceed the amount collected, the FDIC will implement a one-time final shortfall special assessment to ensure the full amount of actual losses is recovered as required by law. The extent to which any such future offsets or a future one-time shortfall special assessment will impact our future deposit insurance expense is currently uncertain.
Current report
Net income for 2025 increased $65.2 million, or 11.6%, compared to 2024. The increase was primarily the result of a $130.3 million increase in net interest income, a $25.4 million increase in non-interest income, and a $20.8 million decrease in credit loss expense partly offset by a $102.0 million increase in non-interest expense and a $9.4 million increase in income tax expense.
Current report
Net income for 2025 decreased $929 thousand, or 2.5%, compared to 2024. The decrease was primarily due to a $14.8 million increase in non-interest expense partly offset by a $13.6 million increase in non-interest income.
Current report
One Big Beautiful Bill Act. The One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025. Among other things, the new law makes permanent certain expiring business tax provisions of the Tax Cuts and Jobs Act (“TCJA”). These include provisions which allow businesses to immediately expense, for tax purposes, the cost of new investments in certain qualified depreciable assets and the cost of qualified domestic research and development. The OBBBA also imposes a floor on tax deductions taken on charitable contributions. These items did not have a significant impact on our financial statements, though some minor operational changes were necessary to support new information reporting requirements. The OBBBA also significantly changes U.S. tax law related to foreign operations and certain tax credits; however, such changes do not currently impact us.
Current report
The following table summarizes our commercial real estate loan portfolio, by underlying property type, as of December 31, 2025 and 2024.
Current report
Geographic Distribution of Loans. The following table summarizes our loan portfolio by geographic distribution as of December 31, 2025 and 2024. Commercial real estate loans are reported in the geographic region in which the property securing the credit is located. Other loans are reported in the geographic region in which the loans were originated.
Current report
Further information regarding the geographic distribution of commercial real estate loans, by class, as of December 31, 2025 and 2024, is presented in the table below.
Removed paragraphs (9)
Previous report
The decrease was primarily the result of a $74.1 million increase in non-interest expense and a $18.8 million increase in credit loss expense partly offset by a $45.9 million increase in net interest income, a $30.6 million increase in non-interest income, and a $975 thousand decrease in income tax expense.
Previous report
Average resell agreements during 2024 decreased $31.0 million, or 36.0%, compared to 2023, while federal funds sold during 2024 decreased $20.7 million, or 81.4%, compared to 2023. Federal funds sold and resell agreements were not a significant component of interest-earning assets during the comparable periods. The average yields on federal funds sold and resell agreements were 5.72% and 5.63%, respectively, during 2024 compared to 5.07% and 5.36%, respectively, during 2023. The average yields on federal funds sold and resell agreements were positively impacted by higher average market interest rates during 2024 compared to 2023.
Previous report
In December 2024, the CFPB issued a final rule that modifies or eliminates several long-standing exclusions from requirements generally applicable to consumer credit that previously exempted certain overdraft practices from such requirements and requires banks to restructure many overdraft fees, overdraft lines of credit, and other overdraft practices as separate consumer credit accounts that have become subject to those requirements. This rule applies to banks with over $10 billion in total assets, including Frost Bank, starting in October 2025. Compliance with the new requirements could result in Frost Bank, among other things, facing higher compliance costs in charging overdraft fees, experiencing a decreased ability to recover amounts extended as overdraft protection, reducing the availability of overdraft protection, and/or charging lower overdraft fees. Refer to Part I, Item 1. Business in the section captioned “Supervision and Regulation” elsewhere in this annual report on Form 10-K for additional information.
Previous report
During 2023, we sold certain available-for-sale securities with amortized costs totaling $1.9 billion and realized a net gain of $66 thousand. Market conditions provided us an opportunity to sell certain lower-yielding securities. The proceeds from these sales enhanced our liquidity position and provided us the flexibility to be more opportunistic with the reinvestment of these funds in the future.
Previous report
Other Non-Interest Income. Other non-interest income for 2024 decreased $2.9 million, or 5.2%, compared to 2023. The decrease was primarily related to decreases in sundry and other miscellaneous income (down $6.9 million) and income from customer derivative and foreign exchange transactions (down $2.0 million), among other things, partly offset by increases in public finance underwriting fees (up $4.9 million), income from customer securities trading activities (up $957 thousand), and earnings on the cash surrender value of life insurance (up $802 thousand), among other things. Sundry and other miscellaneous income during 2024 included $4.6 million in card related incentives and $1.9 million related to the recovery of prior write-offs, among other things, while sundry and other miscellaneous income during 2023 included $5.6 million related to the recovery of prior write-offs, $4.4 million in card related incentives, and $1.5 million related to distributions received from a Small Business Investment Company (“SBIC”) fund investment, among other things. The fluctuations in public finance underwriting fees and income from customer derivative, foreign exchange and securities trading transactions were primarily related to variations in transaction volumes. The increase in earnings on the cash surrender value of life insurance was related to an increase in market interest rates.
Previous report
Net income for 2024 decreased $17.5 million, or 3.0%, compared to 2023. The decrease was primarily the result of a $61.0 million increase in non-interest expense and an $18.8 million increase in credit loss expense partly offset by a $48.2 million increase in net interest income and a $13.5 million increase in non-interest income.
Previous report
Net income for 2024 increased $3.6 million, or 11.0%, compared to 2023. The increase was primarily due to a $17.3 million increase in non-interest income partly offset by a $12.6 million increase in non-interest expense, and a $968 thousand increase in income tax expense.
Previous report
The following tables summarize our commercial real estate loan portfolio, including commercial real estate loans reported as a component of our energy loan portfolio segment, as segregated by (i) the type of property securing the credit and (ii) the geographic region in which the property securing the credit is located. Property type concentrations are stated as a percentage of year-end total commercial real estate loans as of December 31, 2024 and 2023:
Previous report
(primarily overdrafts) and commercial and industrial loans and, to a lesser extent, both commercial and consumer real estate loans. The impact of these items was partly offset by a decrease in expected credit losses associated with energy loans; primarily related to decreases in modeled expected losses and the overlay for credit concentrations; a decrease in specific allocations related to commercial real estate loans; and a decrease in the consumer overlay, primarily associated with the model updates discussed in Note 3 - Loans in the accompanying notes to consolidated financial statements.
Reworded paragraphs (86)
Previous wording
•The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board.
Current wording
•The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board and the implementation of tariffs and other protectionist trade policies.
Previous wording
Net income available to common shareholders totaled $575.9 million, or $8.87 diluted per common share, in 2024 compared to $591.3 million, or $9.10 diluted per common share, in 2023 and $572.5 million, or $8.81 diluted per common share, in 2022.
Current wording
Net income available to common shareholders totaled $641.9 million, or $9.92 diluted per common share, in 2025 compared to $575.9 million, or $8.87 diluted per common share, in 2024 and $591.3 million, or $9.10 diluted per common share, in 2023.
Previous wording
Net income available to common shareholders decreased $15.4 million for 2024 compared to 2023.
Current wording
Net income available to common shareholders increased $66.0 million for 2025 compared to 2024. The increase was primarily the result of a $131.5 million increase in net interest income, a $40.0 million increase in non-interest income, and a $20.8 million decrease in credit loss expense partly offset by a $116.6 million increase in non-interest expense and and a $9.7 million increase in income tax expense.
Previous wording
Net interest income is the difference between interest income on earning assets, such as loans and securities, and interest expense on liabilities, such as deposits and borrowings, which are used to fund those assets. Net interest income is our largest source of revenue, representing 77.8% of total revenue during 2024. Net interest margin is the ratio of taxable-equivalent net interest income to average earning assets for the period. The level of interest rates and the volume and mix of earning assets and interest-bearing liabilities impact net interest income and net interest margin.
Current wording
Net interest income is the difference between interest income on earning assets, such as loans and securities, and interest expense on liabilities, such as deposits and borrowings, which are used to fund those assets. Net interest income is our largest source of revenue, representing 77.7% of total revenue during 2025. Net interest margin is the ratio of taxable-equivalent net interest income to average earning assets for the period. The level of interest rates and the volume and mix of earning assets and interest-bearing liabilities impact net interest income and net interest margin.
Previous wording
The Federal Reserve influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. As of December 31, 2024, approximately 40.6% of our loans had a fixed interest rate, while the remaining loans had floating interest rates that were primarily tied to a benchmark developed by the American Financial Exchange, the Secured Overnight Financing Rate (“SOFR”) (approximately 33.5%); the prime interest rate (approximately 21.0%); or the American Interbank Offered Rate (“AMERIBOR”) (approximately 4.8%). Certain other loans are tied to other indices; however, such loans do not make up a significant portion of our loan portfolio as of December 31, 2024.
Current wording
The Federal Reserve influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. As of December 31, 2025, approximately 39.7% of our loans had a fixed interest rate, while the remaining loans had floating interest rates that were primarily tied to a benchmark developed by the American Financial Exchange, the Secured Overnight Financing Rate (“SOFR”) (approximately 38.4%); the prime interest rate (approximately 19.1%); or the American Interbank Offered Rate (“AMERIBOR”) (approximately 2.2%). Certain other loans are tied to other indices; however, such loans do not make up a significant portion of our loan portfolio as of December 31, 2025.
Previous wording
As of December 31, 2024, the target range for the federal funds rate was 4.25% to 4.50%. In December 2024, the Federal Reserve released projections whereby the midpoint of the projected appropriate target range for the federal funds rate would fall to 3.9% by the end of 2025 and subsequently decrease to 3.4% by the end of 2026. While there can be no such assurance that any such decreases in the federal funds rate will occur, these projections imply up to a 50 basis point decrease in the federal funds rate during 2025, followed by a 50 basis point decrease in 2026.
Current wording
As of December 31, 2025, the target range for the federal funds rate was 3.50% to 3.75%. In December 2025, the Federal Reserve released projections whereby the midpoint of the projected appropriate target range for the federal funds rate would fall to 3.4% by the end of 2026 and subsequently decrease to 3.1% by the end of 2027 While there can be no such assurance that any such decreases in the federal funds rate will occur, these projections imply up to a 25 basis point decrease in the federal funds rate during 2026, followed by a 25 basis point decrease in 2027.
Previous wording
We are primarily funded by core deposits, with non-interest-bearing demand deposits historically being a significant source of funds. This lower-cost funding base is expected to have a positive impact on our net interest income and net interest margin in a rising interest rate environment. Nonetheless, our access to and pricing of deposits may be negatively impacted by, among other factors, periods of higher interest rates which could promote increased competition for deposits, including from new financial technology competitors, or provide customers with alternative investment options. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk elsewhere in this report for information about our sensitivity to interest rates. Further analysis of the components of our net interest margin is presented below.
Current wording
We are primarily funded by core deposits, with non-interest-bearing demand deposits historically being a significant source of funds. This lower-cost funding base is expected to have a positive impact on our net interest income and net interest margin, particularly in rising or high interest rate environments. Nonetheless, our access to and pricing of deposits may be negatively impacted by, among other factors, periods of higher interest rates which could promote increased competition for deposits, including from new financial technology competitors, or provide customers with alternative investment options. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk elsewhere in this report for information about our sensitivity to interest rates. Further analysis of the components of our net interest margin is presented below.
Previous wording
Taxable-equivalent net interest income for 2024 increased $36.2 million, or 2.2%, compared to 2023. Taxable-equivalent net interest income in 2024 included 366 days compared to 365 days in 2023 as a result of the leap year. The additional day added approximately $3.0 million to taxable-equivalent net interest income during 2024. Excluding the impact of the additional day results in an effective increase in taxable-equivalent net interest income of $33.2 million during 2024.
Current wording
Taxable-equivalent net interest income for 2025 increased $134.0 million, or 7.9%, compared to 2024. Taxable-equivalent net interest income in 2024 included 366 days compared to 365 days in 2025 as a result of the leap year. The additional day added approximately $3.0 million to taxable-equivalent net interest income during 2024. Excluding the impact of the additional day in 2024 results in an effective increase in taxable-equivalent net interest income of $137.0 million during 2025 compared to 2024.
Previous wording
The increase in taxable-equivalent net interest income during 2024 was primarily related to increases in the average volume of and yield on loans and increases in the average yields on taxable securities, interest-bearing deposits (primarily amounts held by us in an interest-bearing account at the Federal Reserve), and to a lesser extent, tax-exempt securities, combined with an increase in the average volume of interest-bearing deposits (primarily amounts held by us in an interest-bearing account at the Federal Reserve), among other things. The impact of these items was partly offset by increases in the average volume of and cost on time deposit accounts, decreases in the average volumes of taxable and tax-exempt securities, and increases in the average costs of repurchase agreements and money market deposit accounts, among other things. As a result of the aforementioned fluctuations, the taxable-equivalent net interest margin increased 8 basis points from 3.45% during 2023 to 3.53% during 2024.
Current wording
The increase in taxable-equivalent net interest income during 2025 was primarily related to decreases in the average costs of interest-bearing deposit accounts and repurchase agreements combined with an increase in the average volume of loans, and increases in the average yield on and volume of taxable securities, and, to a lesser extent, tax-exempt securities, among other things. The impact of these items was partly offset by a decrease in the average yield on loans, decreases in the average yield on and volume of interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve), and a decrease in the average volume of resell agreements, among other things, combined with increases in the average volumes of interest-bearing deposit accounts and repurchase agreements, among other things. As a result of the aforementioned fluctuations, the taxable-equivalent net interest margin increased 13 basis points from 3.53% during 2024 to 3.66% during 2025.
Previous wording
The average volume of interest-earning assets for 2024 increased $89.1 million, or 0.2%, compared to 2023. The increase in the average volume of interest-earning assets during 2024 was primarily related to a $1.9 billion increase in average loans and a $208.0 million increase in average interest-bearing deposits (primarily amounts held by us in an interest-bearing account at the Federal Reserve) partly offset by a $1.2 billion decrease in average taxable securities, a $766.5 million decrease in average tax-exempt securities, a $31.0 million decrease in average resell agreements and a $20.7 million decrease in average federal funds sold.
Current wording
The average volume of interest-earning assets for 2025 increased $2.1 billion, or 4.6%, compared to 2024. The increase in the average volume of interest-earning assets during 2025 was primarily related to a $1.4 billion increase in average loans, a $938.4 million increase in average taxable securities, and a $173.1 million increase in average tax-exempt securities, partly offset by a $376.1 million decrease in average interest-bearing deposits (primarily amounts held by us in an interest-bearing account at the Federal Reserve) and a $42.3 million decrease in average resell agreements.
Previous wording
The average yield on interest-earning assets increased 36 basis points from 4.82% during 2023 to 5.18% during 2024 while the average rate paid on interest-bearing liabilities increased 33 basis points from 2.19% in 2023 to 2.52% in 2024. The average taxable-equivalent yields on interest-earning assets during the comparable periods was impacted by changes in market interest rates (as noted in the table above) and changes in the volume and relative mix of interest-earning assets.
Current wording
The average yield on interest-earning assets decreased 14 basis points from 5.18% during 2024 to 5.04% during 2025 while the average rate paid on interest-bearing liabilities decreased 44 basis points from 2.52% in 2024 to 2.08% in 2025. The average taxable-equivalent yields on interest-earning assets during the comparable periods was impacted by changes in market interest rates (as noted in the table above) and changes in the volume and relative mix of interest-earning assets.
Previous wording
The average taxable-equivalent yield on loans increased 30 basis points from 6.69% during 2023 to 6.99% during 2024. The average taxable-equivalent yield on loans during 2024 was partly impacted by changes in market interest rates (as noted in the table above). The average volume of loans increased $1.9 billion, or 10.7%, in 2024 compared to 2023. Loans made up approximately 42.8% of average interest-earning assets during 2024 compared to 38.7% during 2023.
Current wording
The average taxable-equivalent yield on loans decreased 44 basis points from 6.99% during 2024 to 6.55% during 2025. The average taxable-equivalent yield on loans during 2025 was partly impacted by changes in market interest rates (as noted in the table above). The average volume of loans increased $1.4 billion, or 7.3%, in 2025 compared to 2024. Loans made up approximately 43.9% of average interest-earning assets during 2025 compared to 42.8% during 2024.
Previous wording
The average taxable-equivalent yield on securities was 3.38% during 2024, increasing 14 basis points compared to 3.24% during 2023. The average yield on taxable securities was 2.92% during 2024 compared to 2.72% during 2023, increasing 20 basis points, while the average yield on tax exempt securities was 4.31% during 2024 compared to 4.26% during 2023, increasing 5 basis points. Tax exempt securities made up approximately 35.2% of total average securities during 2024, compared to 35.5% during 2023. The average volume of total securities decreased $2.0 billion, or 9.5%, during 2024 compared to 2023. Securities made up approximately 40.8% of average interest-earning assets in 2024 compared to 45.1% in 2023. The decrease during 2024 was primarily related to the use of funds provided by maturities, calls and principal repayments of these securities to support the origination of loans.
Current wording
The average taxable-equivalent yield on securities was 3.77% during 2025, increasing 39 basis points compared to 3.38% during 2024. The average yield on taxable securities was 3.41% during 2025 compared to 2.92% during 2024, increasing 49 basis points, while the average yield on tax exempt securities was 4.52% during 2025 compared to 4.31% during 2024, increasing 21 basis points. Tax exempt securities made up approximately 34.1% of total average securities during 2025, compared to 35.2% during 2024. The average volume of total securities increased $1.1 billion, or 5.9%, during 2025 compared to 2024. Securities made up approximately 41.3% of average interest-earning assets in 2025 compared to 40.8% in 2024.
Previous wording
Average interest-bearing deposits (primarily amounts held by us in an interest-bearing account at the Federal Reserve), during 2024 increased $208.0 million, or 2.8%, compared to 2023. Interest-bearing deposits made up approximately 16.3% of average interest-earning assets during 2024 compared to approximately 15.9% in 2023. The increase during 2024 was partly related to funds provided by maturities, calls and principal repayments of securities. The average yield on interest-bearing deposits was 5.27% during 2024 and 5.13% during 2023. The average yield on interest-bearing deposits during 2024 was impacted by a higher average interest rate paid on reserves held at the Federal Reserve, compared to 2023.
Current wording
Average interest-bearing deposits (primarily amounts held by us in an interest-bearing account at the Federal Reserve), during 2025 decreased $376.1 million, or 5.0%, compared to 2024. Interest-bearing deposits made up approximately 14.8% of average interest-earning assets during 2025 compared to approximately 16.3% in 2024. The decrease during 2025 was primarily related to the reinvestment of amounts held in an interest-bearing account at the Federal Reserve into securities and loans. The average yield on interest-bearing deposits was 4.31% during 2025 and 5.27% during 2024. The average yield on interest-bearing deposits during 2025 was impacted by a lower average interest rate paid on reserves held at the Federal Reserve, compared to 2024.
Previous wording
The average rate paid on interest-bearing liabilities was 2.52% during 2024, increasing 33 basis points from 2.19% during 2023. Average deposits decreased $472.8 million, or 1.1%, in 2024 compared to 2023. Average interest-bearing deposits increased $1.0 billion in 2024 compared to 2023, while average non-interest-bearing deposits decreased $1.5 billion in 2024 compared to 2023. The ratio of average interest-bearing deposits to total average deposits was 66.2% in 2024 compared to 63.0% in 2023. The average cost of deposits is primarily impacted by changes in market interest rates as well as changes in the volume and relative mix of interest-bearing deposits. The average rates paid on interest-bearing deposits and total deposits were 2.32% and 1.54%, respectively, in 2024 compared to 1.95% and 1.23%, respectively, in 2023. The average cost of deposits during 2024 was impacted by an increase in the interest rates we pay on our interest-bearing deposit products as a result of an increase in market interest rates.
Current wording
The average rate paid on interest-bearing liabilities was 2.08% during 2025, decreasing 44 basis points from 2.52% during 2024. Average deposits increased $1.2 billion, or 3.0%, in 2025 compared to 2024. Average interest-bearing deposits increased $1.2 billion in 2025 compared to 2024, while average non-interest-bearing deposits increased $83.0 million in 2025 compared to 2024. The ratio of average interest-bearing deposits to total average deposits was 67.0% in 2025 compared to 66.2% in 2024. The average cost of deposits is primarily impacted by changes in market interest rates as well as changes in the volume and relative mix of interest-bearing deposits. The average rates paid on interest-bearing deposits and total deposits were 1.89% and 1.26%, respectively, in 2025 compared to 2.32% and 1.54%, respectively, in 2024. The average cost of deposits during 2025 was impacted by decreases in the interest rates we pay on our interest-bearing deposit products as a result of decreases in market interest rates.
Previous wording
Our taxable-equivalent net interest spread, which represents the difference between the average rate earned on earning assets and the average rate paid on interest-bearing liabilities, was 2.66% in 2024 compared to 2.63% in 2023. The net interest spread, as well as the net interest margin, will be impacted by future changes in short-term and long-term interest rate levels, as well as the impact from the competitive environment. A discussion of the effects of changing interest rates on net interest income is set forth in Item 7A. Quantitative and Qualitative Disclosures About Market Risk elsewhere in this report.
Current wording
Our taxable-equivalent net interest spread, which represents the difference between the average rate earned on earning assets and the average rate paid on interest-bearing liabilities, was 2.96% in 2025 compared to 2.66% in 2024. The net interest spread, as well as the net interest margin, will be impacted by future changes in short-term and long-term interest rate levels, as well as the impact from the competitive environment. A discussion of the effects of changing interest rates on net interest income is set forth in Item 7A. Quantitative and Qualitative Disclosures About Market Risk elsewhere in this report.
Previous wording
Total non-interest income for 2024 increased $30.6 million, or 7.1%, compared to 2023. Changes in the various components of non-interest income are discussed in more detail below.
Current wording
Total non-interest income for 2025 increased $40.0 million, or 8.7%, compared to 2024. Changes in the various components of non-interest income are discussed in more detail below.
Previous wording
Trust and Investment Management Fees. Trust and investment management fee income for 2024 increased $12.0 million, or 7.8%, compared to 2023. Investment management fees are the most significant component of trust and investment management fees, making up approximately 81.3% and 79.3% of total trust and investment management fees in 2024 and 2023, respectively. The increase in trust and investment management fees during 2024 was primarily related to increases in investment management fees (up $12.8 million) and oil and gas fees (up $1.5 million), partly offset by decreases in estate fees (down $2.3 million) and real estate fees (down $637 thousand). Investment management fees are generally based on the market value of assets within an account and are thus impacted by price changes within the equity and bond markets. The increase in investment management fees during 2024 were primarily related to increases in the average value of assets maintained in accounts. The increases in the average value of assets were partly related to higher equity valuations during 2024 relative to 2023. The increase in oil and gas fees was primarily related to increased royalties received, in part due to new accounts added in 2023, and, to a lesser extent, an increase in new lease bonuses. The decreases in estate fees and real estate fees were primarily related to decreased transaction volumes relative to 2023.
Current wording
Trust and Investment Management Fees. Trust and investment management fee income for 2025 increased $11.8 million, or 7.2%, compared to 2024. Investment management fees are the most significant component of trust and investment management fees, making up approximately 81.8% and 81.3% of total trust and investment management fees in 2025 and 2024, respectively. The increase in trust and investment management fees during 2025 was primarily related an increase in investment management fees (up $10.4 million) and, to a lesser extent, estate fees (up $2.0 million), among other things. Investment management fees are generally based on the market value of assets within an account and are thus impacted by volatility in the equity and bond markets. The increase in investment management fees during 2025 was primarily related to an increase in the average value of assets maintained in accounts. The increase in the average values of assets was partly related to higher average equity valuations during 2025 relative to 2024 and growth in the number of accounts. The increase in estate fees during 2025 was primarily related to an increase in transaction volumes relative to 2024.
Previous wording
At December 31, 2024, trust assets, including both managed assets and custody assets, were primarily composed of equity securities (42.2% of trust assets), fixed income securities (32.5% of trust assets), alternative investments (9.5% of assets) and cash equivalents (9.0% of trust assets). The estimated fair value of trust assets was $51.4 billion (including managed assets of $26.2 billion and custody assets of $25.2 billion) at December 31, 2024 compared to $47.2 billion (including managed assets of $23.8 billion and custody assets of $23.5 billion) at December 31, 2023.
Current wording
At December 31, 2025, trust assets, including both managed assets and custody assets, were primarily composed of equity securities (47.7% of trust assets), fixed income securities (30.3% of trust assets), alternative investments (8.7% of assets) and cash equivalents (7.4% of trust assets). The estimated fair value of trust assets was $51.0 billion (including managed assets of $26.7 billion and custody assets of $24.3 billion) at December 31, 2025 compared to $51.4 billion (including managed assets of $26.2 billion and custody assets of $25.2 billion) at December 31, 2024.
Previous wording
Service Charges on Deposit Accounts. Service charges on deposit accounts for 2024 increased $12.7 million, or 13.6%, compared to 2023. The increase was primarily related to increases in commercial service charges (up $5.5 million) and overdraft charges on consumer and commercial accounts (up $5.5 million and $2.0 million, respectively). The increase in commercial service charges during 2024 was partly related to an increase in billable services related to analyzed treasury management accounts partly offset by the effect of a higher average earnings credit rate applied to deposits maintained by treasury management customers which resulted in customers paying for less of their services through fees rather than with earnings credits applied to their deposit balances. The increase in commercial service charges was also partly related, to a lesser extent, to an increase in service fees on non-analyzed accounts. Overdraft charges totaled $51.9 million ($39.1 million consumer and $12.8 million commercial) during 2024 compared to $44.4 million ($33.6 million consumer and $10.8 million commercial) during 2023. The increase in overdraft charges during 2024 was impacted by an increase in the volume of fee assessed overdrafts relative to 2023, in part due to growth in the number of accounts.
Current wording
Overdraft charges totaled $60.6 million ($46.7 million consumer and $13.9 million commercial) during 2025 compared to $51.9 million ($39.1 million consumer and $12.8 million commercial) during 2024. The increase in overdraft charges during 2025 was impacted by an increase in the volume of fee assessed overdrafts relative to 2024, in part due to growth in the number of accounts. The increase in commercial service charges during 2025 was partly related to an increase in billable services related to analyzed treasury management accounts combined with the effect of a lower average earnings credit rate applied to deposits maintained by treasury management customers which resulted in customers paying for more of their services through fees rather than with earnings credits applied to their deposit balances. The increase in commercial service charges was also partly related to an increase in service fees on non-analyzed accounts.
Previous wording
Insurance Commissions and Fees. Insurance commissions and fees for 2024 increased $3.0 million, or 5.1%, compared to 2023. The increase was primarily the result of increases in commercial lines property and casualty commissions (up $3.5 million) and contingent commissions (up $332 thousand), partly offset by a decrease in life insurance commissions (down $1.0 million). The increase in commercial lines property and casualty commissions was primarily related to an increase in the underlying exposure base, an increase in rates, and an increase in business volumes. The decrease in life insurance commissions was primarily due to a decrease in business volumes mostly due to a significant transaction in 2023.
Current wording
Insurance Commissions and Fees. Insurance commissions and fees for 2025 increased $4.2 million, or 6.9%, compared to 2024. The increase was primarily the result of increases in benefit plan commissions (up $1.9 million), property and casualty commissions (up $1.3 million) and life insurance commissions (up $878 thousand). The increase in benefit plan commissions was primarily due to premium and exposure rate increases within the existing customer base and an increase in business volume. The increase in property and casualty commissions was primarily related to commercial lines due to an increase in business volumes partly offset by variations in the rate and exposure base within the existing customer bases. The increase in life insurance commissions was primarily related to an increase in business volumes.
Previous wording
Contingent income totaled $5.0 million in 2024 and $4.6 million in 2023. Contingent income primarily consists of amounts received from various property and casualty insurance carriers related to the loss performance of insurance policies previously placed. These performance related contingent payments are seasonal in nature and are mostly received during the first quarter of each year. This performance related contingent income totaled $3.4 million in 2024 and $3.3 million in 2023. While total performance related contingent income remained relatively flat during the comparable years, performance related contingent income related to commercial lines insurance policies decreased during 2024 due to a deterioration of the loss performance of commercial lines insurance policies previously placed and lower growth within the commercial lines portfolio, partly due to a tightening of underwriting standards. This decrease was offset by an increase in performance related contingent income related to our personal lines portfolio due to improved loss performance. Contingent income also includes amounts received from various benefit plan insurance companies related to the volume of business generated and/or the subsequent retention of such business. This benefit plan related contingent income totaled $1.6 million in 2024 and $1.3 million in 2023.
Current wording
Contingent income totaled $5.1 million in 2025 and $5.0 million in 2024. Contingent income primarily consists of amounts received from various property and casualty insurance carriers related to the loss performance of insurance policies previously placed. These performance related contingent payments are seasonal in nature and are mostly received during the first quarter of each year. This performance related contingent income totaled $3.7 million in 2025 and $3.4 million in 2024. Performance related contingent income related to commercial lines insurance policies increased due to improved loss performance of commercial lines insurance policies previously placed and growth within the commercial lines portfolio. Contingent income also includes amounts received from various benefit plan insurance companies related to the volume of business generated and/or the subsequent retention of such business. This benefit plan related contingent income totaled $1.4 million in 2025 and $1.6 million in 2024.
Previous wording
Net revenues from interchange and card transaction fees for 2024 increased $1.6 million, or 8.2%, compared to 2023 primarily due to an increase in transaction volumes partly offset by an increase in network costs. A comparison of gross and net interchange and card transaction fees for the reported periods is presented in the table below.
Current wording
Net revenues from interchange and card transaction fees for 2025 increased $1.8 million, or 8.8%, compared to 2024 primarily due to an increase in income from card transactions partly offset by an increase in network costs. A comparison of gross and net interchange and card transaction fees for the reported periods is presented in the table below.
Previous wording
Federal Reserve rules applicable to financial institutions that have assets of $10 billion or more provide that the maximum permissible interchange fee for an electronic debit transaction is the sum of 21 cents per transaction and 5 basis points multiplied by the value of the transaction. An upward adjustment of no more than 1 cent to an issuer's debit card interchange fee is allowed if the card issuer develops and implements policies and procedures reasonably designed to achieve certain fraud-prevention standards. The Federal Reserve also has rules governing routing and exclusivity that require issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product. In October 2023, the Federal Reserve issued a proposal under which the maximum permissible interchange fee for an electronic debit transaction would be the sum of 14.4 cents per transaction and 4 basis points multiplied by the value of the transaction. Furthermore, the fraud-prevention adjustment would increase from a maximum of 1 cent to 1.3 cents. The proposal would adopt an approach for future adjustments to the interchange fee cap, which would occur every other year based on issuer cost data gathered by the Federal Reserve from large debit card issuers. Had the proposed maximum interchange fees been in effect during the reported periods, interchange and debit card transaction fees would have been approximately 30% lower. The comment period for this proposal ended in May 2024. The extent to which any such proposed changes in permissible interchange fees will impact our future revenues is currently uncertain.
Current wording
In October 2023, the Federal Reserve issued a proposal under which the maximum permissible interchange fee for an electronic debit transaction would be the sum of 14.4 cents per transaction and 4 basis points multiplied by the value of the transaction. Furthermore, the fraud-prevention adjustment would increase from a maximum of 1 cent to 1.3 cents. The proposal would adopt an approach for future adjustments to the interchange fee cap, which would occur every other year based on issuer cost data gathered by the Federal Reserve from large debit card issuers. Had the proposed maximum interchange fees been in effect during the reported periods, interchange and debit card transaction fees would have been approximately 30% lower. The comment period for this proposal ended in May 2024. The extent to which any such proposed changes in permissible interchange fees will impact our future revenues is currently uncertain.
Previous wording
Other Charges, Commissions and Fees. Other charges, commissions and fees for 2024 increased $4.3 million, or 8.8%, compared to 2023. The increase was primarily related to increases in income from the placement of annuities (up $1.7 million) and money market accounts (up $1.4 million); letter of credit fees (up $933 thousand); and merchant services rebates/bonuses (up $888 thousand); among other things, partly offset by decreases in capital markets advisory fees (down $985 thousand) and other service charges (down $908 thousand), among other things.
Current wording
Other Charges, Commissions and Fees. Other charges, commissions and fees for 2025 increased $4.2 million, or 7.8%, compared to 2024. The increase was primarily related to increases in income from the placement of annuities (up $1.5 million), commitment fees on unused lines of credit (up $943 thousand), income from the placement of mutual funds (up $591 thousand), merchant services rebates (up $578 thousand), funds transfer service charges (up $499 thousand), and letter of credit fees (up $439 thousand), among other things, partly offset by a decrease in subscription fee income (down $740 thousand), among other things.
Previous wording
Net Gain/Loss on Securities Transactions. During 2024, we sold certain available-for-sale securities with amortized costs totaling $123.3 million and realized a net loss of $96 thousand.
Current wording
Net Gain/Loss on Securities Transactions. During 2025, we sold certain available-for-sale securities with amortized costs totaling $45.4 million and realized a net loss of $850 thousand. During 2024, we sold certain available-for-sale securities with amortized costs totaling $123.3 million and realized a net loss of $96 thousand.
Previous wording
Total non-interest expense for 2024 increased $74.1 million, or 6.0%, compared to 2023. This amount included $9.0 million and $51.5 million, during 2024 and 2023, respectively, related to a special FDIC deposit insurance assessment discussed below. Excluding the impact of the special assessment, total non-interest expense would have increased $116.7 million, or 9.9%. Changes in the various components of non-interest expense are discussed below.
Current wording
Total non-interest expense for 2025 increased $116.6 million, or 8.9%, compared to 2024. Total non-interest expense during 2024 included accruals totaling $9.0 million related to a special deposit insurance assessment. During 2025, we reversed $9.7 million of our special deposit insurance assessment accrual based upon a decrease in expected future payments related to the special deposit insurance assessment. Details of the special deposit insurance assessment are discussed below. Excluding the impact of the special deposit insurance assessment, total non-interest expense would have increased $135.3 million, or 10.5%. Changes in the various components of non-interest expense are discussed below.
Previous wording
Salaries and Wages. Salaries and wages increased $73.7 million, or 13.5%, in 2024 compared to 2023. The increase in salaries and wages was primarily related to an increase in salaries due to annual merit and market increases and an increase in the number of employees. The increase in the number of employees was partly related to our investment in organic expansion in various markets. Salaries and wages was also impacted, to a lesser extent, by increases in incentive compensation and commissions and a decrease in stock-based compensation. We are continuing to experience a competitive labor market which has resulted in and could continue to result in an increase in our staffing costs.
Current wording
Salaries and Wages. Salaries and wages increased $53.3 million, or 8.6%, in 2025 compared to 2024. The increase in salaries and wages was primarily related to increases in salaries due to annual merit and market increases and an increase in the number of employees. The increase in the number of employees was partly related to our investment in organic expansion in various markets. Salaries and wages were also impacted, to a lesser extent, by increases in incentive compensation and stock-based compensation.
Previous wording
Employee Benefits. Employee benefits expense for 2024 increased $7.1 million, or 6.2%, compared to 2023. The increase was primarily related to increases in medical/dental benefits expense (up $5.5 million) and payroll taxes (up $5.1 million), among other things, partly offset by a decrease in 401(k)/profit sharing plan expense (down $3.2 million), primarily related to discretionary profit sharing contributions, and an increase in the net periodic benefit related to our defined benefit retirement plan (up $828 thousand), among other things.
Current wording
Employee Benefits. Employee benefits expense for 2025 increased $23.7 million, or 19.3%, compared to 2024. The increase was primarily related to increases in medical/dental benefits expense (up $11.8 million), 401(k) plan expense (up $7.7 million), and payroll taxes (up $3.5 million).
Previous wording
Net Occupancy. Net occupancy expense for 2024 increased $4.4 million, or 3.5%, compared to 2023. The increase was primarily related to increases in depreciation on buildings and leasehold improvements (together up $3.6 million) and repairs/maintenance/service contracts expense (up $2.7 million), among other things, partly offset by decreases in utilities expense (down $876 thousand) and property taxes (down $622 thousand), among other things. The increases in the aforementioned components of net occupancy expense were impacted, in part, by our expansion efforts.
Current wording
Net Occupancy. Net occupancy expense for 2025 increased $8.2 million, or 6.4%, compared to 2024. The increase was primarily related to increases in depreciation on buildings and leasehold improvements (together up $2.9 million); lease expense (up $2.9 million); and property taxes (up $2.2 million), among other things. The increases in the aforementioned components of net occupancy expense were impacted, in part, by our expansion efforts.
Previous wording
Technology, Furniture and Equipment. Technology, furniture and equipment expense for 2024 increased $13.2 million, or 9.8%, compared to 2023. The increase was primarily related to increases in cloud services expense (up $9.2 million), service contracts expense (up $3.4 million), software amortization (up $1.2 million), and software maintenance expense (up $1.2 million), among other things. The increase from these items was partly offset by a decrease in depreciation on furniture and equipment (down $2.3 million), among other things.
Current wording
Technology, Furniture and Equipment. Technology, furniture and equipment expense for 2025 increased $17.3 million, or 11.6%, compared to 2024. The increase was primarily related to increases in cloud services expense (up $10.3 million), software maintenance (up $4.9 million), depreciation on furniture and equipment (up $2.5 million), and service contracts expense (up $1.1 million), among other things.
Previous wording
Deposit Insurance. Deposit insurance expense totaled $37.3 million in 2024 compared to $76.6 million in 2023. Deposit insurance expense include accruals totaling $9.0 million ($7.1 million after tax) in 2024 and $51.5 million ($40.7 million after tax) in 2023 related to a special deposit insurance assessment discussed below. Excluding these amounts related to the special assessment, deposit insurance expense would have increased $3.2 million in 2024 compared to 2023 primarily due to an increase in the assessment rate.
Current wording
Deposit Insurance. Deposit insurance expense totaled $18.8 million in 2025 compared to $37.3 million in 2024. Deposit insurance expense during 2024 included accruals totaling $9.0 million ($7.1 million after tax) related to a special deposit insurance assessment discussed below. During 2025, we reversed a total of $9.7 million ($7.7 million after tax) of our special deposit insurance assessment accrual based upon a decrease in expected future payments related to the special deposit insurance assessment. Excluding the special assessments from 2024 and reversals in 2025, deposit insurance expense did not significantly fluctuate during the comparable periods.
Previous wording
In November 2023, the FDIC issued a final rule to implement a special assessment to recover losses to the DIF incurred as a result of bank failures earlier that year and the FDIC's use of the systemic risk exception to cover certain deposits that were otherwise uninsured. The special assessment was based on estimated uninsured deposits as of December 31, 2022 (excluding the first $5.0 billion) and was assessed at a quarterly rate of 3.36 basis points, over eight quarterly assessment periods, beginning in the first quarter of 2024. As a result of this final rule, we accrued $51.5 million ($40.7 million after tax) related to this assessment in the fourth quarter of 2023. This amount was based on our estimate of the full amount of the assessment at that time. In February 2024, the FDIC notified insured depository institutions that their loss estimate related to the aforementioned bank failures had increased. As a result, we accrued an additional $7.7 million ($6.1 million after tax), related to an expected update of the special assessment during the first quarter of 2024. Upon receipt of the update during the second quarter of 2024, we accrued an additional $1.2 million ($984 thousand after tax) related to the special assessment. In June 2024, due to the increased estimate of losses, the FDIC announced that it projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate. This updated assessment was made under the FDIC's final rule whereby the estimated loss pursuant to the systemic risk determination can be periodically adjusted. The FDIC has also retained the ability to cease collection early, extend the special assessment collection period and impose a final shortfall special assessment. The extent to which any such additional future assessments will impact our future deposit insurance expense is currently uncertain.
Current wording
In November 2023, the FDIC issued a final rule to implement a special assessment to recover losses to the DIF incurred as a result of bank failures earlier that year and the FDIC's use of the systemic risk exception to cover certain deposits that were otherwise uninsured. The special assessment was based on estimated uninsured deposits as of December 31, 2022 (excluding the first $5.0 billion) and was assessed at a quarterly rate of 3.36 basis points, over eight quarterly assessment periods, beginning in the first quarter of 2024. As a result of this final rule, we accrued $51.5 million ($40.7 million after tax) related to this assessment in 2023. This amount was based on our estimate of the full amount of the assessment at that time. During 2024, the FDIC increased their loss estimate related to the aforementioned bank failures. As a result, we accrued an additional $9.0 million ($7.1 million after tax) in 2024. At that time, due to the increased estimate of losses, the FDIC also projected that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate.
Previous wording
Other Non-Interest Expense. Other non-interest expense for 2024 increased $15.0 million, or 6.6%, compared to 2023. The increase included increases in advertising/promotions expense (up $2.8 million); professional services expense (up $2.5 million), which was primarily related to information technology services; travel, meals and entertainment (up $2.0 million); research and platform fees (up $1.5 million); stationery/printing expense (up $1.3 million); postage expense (up $1.1 million); and business development expense (up $991 thousand), among other things. The increase from these items was partly offset by a decrease in donations expense (down $2.6 million) and a decrease in sundry and other miscellaneous expense (down $1.3 thousand), in part due to certain operational losses and write-offs recognized in 2023, among other things.
Current wording
Other Non-Interest Expense. Other non-interest expense for 2025 increased $32.7 million, or 13.4%, compared to 2024. The increase included increases in fraud losses (up $6.6 million); sundry and other miscellaneous expense (up $6.3 million), of which $5.8 million related to increased operational losses and asset write-offs; advertising/promotions expense (up $5.5 million); donations expense (up $4.8 million), primarily related to donations to the Frost Charitable Foundation; professional services expense (up $2.4 million); business development expense (up $2.2 million); research and platform fees (up $1.9 million); travel, meals and entertainment (up $1.3 million); and communications expense (up $1.2 million); among other things, partly offset by a decrease in check card expenses (down $1.6 million), among other things.
Previous wording
Net interest income for 2024 increased $48.2 million, or 3.1%, compared to 2023. The increase was primarily related to increases in the average volume of and yield on loans and increases in the average yields on taxable securities, interest-bearing deposits (primarily amounts held by us in an interest-bearing account at the Federal Reserve), and to a lesser extent, tax-exempt securities, combined with an increase in the average volume of interest-bearing deposits (primarily amounts held by us in an interest-bearing account at the Federal Reserve), among other things. The impact of these items was partly offset by increases in the average volume of and cost on time deposit accounts, decreases in the average volumes of taxable and tax-exempt securities, and increases in the average costs of repurchase agreements and money market deposit accounts, among other things. See the analysis of net interest income included in the section captioned “Net Interest Income” included elsewhere in this discussion.
Current wording
Net interest income for 2025 increased $130.3 million, or 8.1%, compared to 2024. The increase was primarily related to decreases in the average costs of interest-bearing deposit accounts and repurchase agreements combined with an increase in the average volume of loans, and increases in the average yield on and volume of taxable securities, and, to a lesser extent, tax-exempt securities, among other things. The impact of these items was partly offset by a decrease in the average yield on loans, decreases in the average yield on and volume of interest-bearing deposits (primarily amounts held in an interest-bearing account at the Federal Reserve), and a decrease in the average volume of resell agreements, among other things, combined with increases in the average volumes of interest-bearing deposit accounts and repurchase agreements, among other things. See the analysis of net interest income included in the section captioned “Net Interest Income” included elsewhere in this discussion.
Previous wording
Credit loss expense for 2024 totaled $65.0 million compared to $46.2 million in 2023. See the sections captioned “Credit Loss Expense” and “Allowance for Credit Losses” elsewhere in this discussion for further analysis of credit loss expense related to loans and off-balance-sheet commitments.
Current wording
Credit loss expense for 2025 totaled $44.2 million compared to $65.0 million in 2024. See the sections captioned “Credit Loss Expense” and “Allowance for Credit Losses” elsewhere in this discussion for further analysis of credit loss expense related to loans and off-balance-sheet commitments.
Previous wording
Non-interest income for 2024 increased $13.5 million, or 5.4%, compared to 2023. The increase was primarily related to increases in service charges on deposit accounts; insurance commissions and fees; and interchange and card transaction fees partly offset by a decrease in other non-interest income.
Current wording
Non-interest income for 2025 increased $25.4 million, or 9.6%, compared to 2024. The increase was primarily related to increases in service charges on deposit accounts; insurance commissions and fees; other non-interest income; interchange and card transaction fees; and other charges, commissions and fees.
Previous wording
The increase in service charges on deposit accounts was primarily related to increases in commercial service charges and overdraft charges on consumer and commercial accounts The increase in commercial service charges during 2024 was partly related to an increase in billable services partly offset by the effect of a higher average earnings credit rate applied to deposits maintained by treasury management customers. The increase in commercial service charges was also partly related, to a lesser extent, to an increase in service fees on non-analyzed accounts. The increase in overdraft charges was impacted by an increase in the volume of fee assessed overdrafts in part due to growth in the number of accounts. The increases in insurance commissions and fees were primarily related to increases in commercial lines property and casualty commissions and contingent commissions partly offset by decreases in life insurance commissions. The increase in interchange and card transaction fees was primarily due to an increase in transaction volumes partly offset by an increase in network costs. The decrease in other non-interest income was primarily related to decreases in sundry and other miscellaneous income and income from customer derivative and foreign exchange transactions, among other things, partly offset by increases in public finance underwriting fees and earnings on the cash surrender value of life insurance, among other things. See the analysis of these categories of non-interest income included in the section captioned “Non-Interest Income” included elsewhere in this discussion.
Current wording
The increase in service charges on deposit accounts was primarily related to increases in overdraft charges on consumer and, to a lesser extent, commercial accounts, and commercial service charges. The increase in insurance commissions and fees were primarily related to increases in benefit plan commissions, property and casualty commissions and life insurance commissions. The increase in other non-interest income was primarily related to increases in gains on the sale of foreclosed and other assets and income from customer securities trading and derivatives trading activities, partly offset by a decrease in public finance underwriting fees, among other things. The increase in interchange and card transaction fees was primarily due to an increase in income from card transactions partly offset by an increase in network costs. The increase in other charges, commissions and fees was primarily due to increases in commitment fees on unused lines of credit, merchant services rebates, funds transfer service charges, and letter of credit fees, among other things, partly offset by a decrease in subscription fee income, among other things. See the analysis of these categories of non-interest income included in the section captioned “Non-Interest Income” included elsewhere in this discussion.
Previous wording
Non-interest expense for 2024 increased $61.0 million, or 5.7%, compared to 2023. The increase was primarily related to increases in salaries and wages; technology, furniture, and equipment expense; other non-interest expense; employee benefit expense; and net occupancy expense, partly offset by a decrease in deposit insurance expense. The increase in salaries and wages was primarily related to an increase in salaries due to annual merit and market increases and an increase in the number of employees. Salaries and wages were also impacted, to a lesser extent, by increases in incentive compensation and commissions and a decrease in stock-based compensation. The increase in technology, furniture, and equipment expense was primarily related to increases in cloud services expense, service contracts expense, software amortization, and software maintenance expense, among other things. The increase in other non-interest expense included increases in advertising/promotions expense; professional services expense, which was primarily related to information technology services; travel, meals and entertainment; stationery/printing expense; postage expense; and business development expense, among other things. The increase from these items was partly offset by a decrease in donations expense and a decrease in sundry and other miscellaneous expense, in part due to certain operational losses and write-offs recognized in 2023, among other things. The increase in employee benefits expense was primarily related to increases in medical/dental benefits expense and payroll taxes, among other things, partly offset by a decrease in 401(k)/profit sharing plan expense and an increase in the net periodic benefit related to our defined benefit retirement plan, among other things. Deposit insurance expense include accruals totaling $9.0 million ($7.1 million after tax) in 2024 and $51.5 million ($40.7 million after tax) in 2023 related to a special deposit insurance assessment. Excluding these amounts related to the special assessment, deposit insurance expense would have increased $3.2 million in 2024 compared to 2023 primarily due to an increase in the assessment rate. See the analysis of these categories of non-interest expense included in the section captioned “Non-Interest Expense” included elsewhere in this discussion.
Current wording
The increase in salaries and wages was primarily related to increases in salaries due to annual merit and market increases and an increase in the number of employees. Salaries and wages were also impacted, to a lesser extent, by increases in incentive compensation and stock-based compensation. The increase in other non-interest expense included increases in fraud losses; sundry and other miscellaneous expense; advertising/promotions expense; donations expense, primarily related to donations to the Frost Charitable Foundation; professional services expense; business development expense; travel, meals and entertainment; and communications expense; among other things, partly offset by a decrease in check card expenses, among other things. The increase in employee benefits expense was primarily related to increases in medical/dental benefits expense, 401(k) plan expense, and payroll taxes. The increase in technology, furniture, and equipment expense was primarily related to increases in cloud services expense, software maintenance expense, depreciation on furniture and equipment, and service contracts expense, among other things. The increase in net occupancy expense was primarily related to increases in depreciation on buildings and leasehold improvements; lease expense; and property taxes, among other things. Deposit insurance expense during 2024 included accruals totaling $9.0 million ($7.1 million after tax) related to a special deposit insurance assessment. During 2025, we reversed a total of $9.7 million ($7.7 million after tax) of our special deposit insurance assessment accrual based upon a decrease in expected future payments related to the special deposit insurance assessment. Excluding the special assessments from 2024 and reversals in 2025, deposit insurance expense did not significantly fluctuate during the comparable periods. See the analysis of these categories of non-interest expense included in the section captioned “Non-Interest Expense” included elsewhere in this discussion.
Previous wording
Non-interest income for 2024 increased $17.3 million, or 9.7%, compared to 2023. The increase was primarily due to increases in trust and investment management fees; other charges, commissions, and fees; and other non-interest income. Trust and investment management fee income is the most significant income component for Frost Wealth Advisors. Investment management fees are the most significant component of trust and investment management fees, making up approximately 81.3% and 79.3% of total trust and investment management fees for 2024 and 2023, respectively. The increase in trust and investment management fees was primarily due increases in investment management fees and oil and gas fees, partly offset by decreases in estate fees and real estate fees. The increase in investment management fees was primarily related to an increase in the average value of assets maintained in accounts. The increase in the average value of assets was partly related to higher average equity valuations during 2024 relative to 2023. The increase in oil and gas fees was primarily related to increased royalties received, in part due to new accounts added in 2023, and, to a lesser extent, an increase in new lease bonuses. The decreases in estate fees and real estate fees were primarily related to decreased transaction volumes relative to 2023. The increase in other charges, commissions, and fees was primarily related to increases in income from the placement of annuities and money market accounts, among other things. The increase in other non-interest income was primarily related to an increase in income from customer securities trading transactions, among other things. See the analysis of trust and investment management fees, other non-interest income and other charges, commissions, and fees included in the section captioned “Non-Interest Income” included elsewhere in this discussion.
Current wording
Non-interest income for 2025 increased $13.6 million, or 6.9%, compared to 2024. The increase was primarily related to increases in trust and investment management fees and other charges, commissions, and fees. Trust and investment management fee income is the most significant income component for Frost Wealth Advisors. Investment management fees are the most significant component of trust and investment management fees, making up approximately 81.8% and 81.3% of total trust and investment management fees for 2025 and 2024, respectively. The increase in trust and investment management fees was primarily due to an increase in investment management fees and, to a lesser extent, estate fees, among other things. The increase in investment management fees was primarily related to an increase in the average value of assets maintained in accounts. The increase in the average value of assets was partly related to higher average equity valuations during 2025 relative to 2024 and growth in the number of accounts. The increase in estate fees was primarily related to an increase in transaction volumes relative to 2024. The increase in other charges, commissions, and fees was primarily related to increases in income from the placement of annuities and mutual funds, among other things. See the analysis of trust and investment management fees, other non-interest income and other charges, commissions, and fees included in the section captioned “Non-Interest Income” included elsewhere in this discussion.
Showing the first 40 of 86 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Federal Reserve rules applicable to financial institutions that have assets of $10 billion or more provide that the maximum permissible interchange fee for an electronic debit transaction is the sum of 21 cents per transaction and 5 basis points multiplied by the value of the transaction. An upward adjustment of no more than 1 cent to an issuer's debit card interchange fee is allowed if the card issuer develops and implements policies and procedures reasonably designed to achieve certain fraud-prevention standards. The Federal Reserve also has rules governing routing and exclusivity that require issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product. In August 2025, the U.S. District Court for the District of North Dakota ruled to vacate the Federal Reserve’s current interchange rules but simultaneously stayed its own vacatur pending appeal to the circuit court. The outcome of this litigation could significantly and adversely affect the fees banks can charge on debit card transactions.
Current report — wording carried from elsewhere
Non-interest expense for 2025 increased $102.0 million, or 9.0%, compared to 2024. The increase was primarily related to increases in salaries and wages; other non-interest expense; employee benefit expense; technology, furniture, and equipment expense; and net occupancy expense, partly offset by a decrease in deposit insurance expense.
Current report — wording carried from elsewhere
The following table summarizes the industry concentrations of our commercial and industrial and energy loan portfolios, as segregated by SIC code, as of December 31, 2025 and 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In addition, financial markets and global supply chains may continue to be adversely affected by the current or anticipated impact of global wars/military conflicts, terrorism, or other geopolitical events.