Cullen/Frost Bankers, Inc. (CFR): Business Model Canvas [Dec-2025 Updated]

You're trying to map out the engine room of Cullen/Frost Bankers, Inc., and honestly, their late-2025 execution shows a bank doubling down on a disciplined, Texas-focused expansion, all while maintaining rock-solid stability with a Tier 1 Capital Ratio near 14.43%. We've dissected their entire operating framework-from their $52.5 billion asset base to their high-touch relationship model-to give you a precise, analyst-grade snapshot of how they generate revenue streams like their $463.7 million in Q3 Net Interest Income. Dive into the full Business Model Canvas below to see the exact resources and activities driving their performance in today's market.

Cullen/Frost Bankers, Inc. (CFR) - Canvas Business Model: Key Partnerships

You're looking at the relationships Cullen/Frost Bankers, Inc. relies on to operate and grow its business across Texas, focusing on the data points available as of late 2025.

Correspondent banks for specialized services and geographic reach are a core part of the structure. Frost Bank acts as correspondent for approximately 179 financial institutions, which are primarily banks located within Texas. These partner banks maintain deposits with Cullen/Frost Bankers, Inc. for services like check clearing, transfer of funds, fixed income security services, and securities custody and clearance services.

The focus on local Texas businesses and community organizations drives market penetration through physical presence and relationship building. As of the first quarter of 2025, Cullen/Frost had 200 financial centers, representing an increase of more than 50% since the organic growth strategy started in late 2018 when they had around 130 locations. The organic expansion strategy continues to generate significant volume; as of the third quarter of 2025, expansion deposits stood at $2.9 billion and expansion loans at $2.1 billion, contributing to almost 74,000 new households. This expansion effort represented 38% of total loan growth and 39% of total deposit growth year-over-year in Q3 2025. That's a lot of growth funded by existing success.

For insurance carriers for non-bank product offerings, the firm integrates these services through Frost Brokerage Services, Inc., which is a Member FINRA/SIPC. The revenue from this segment shows activity; insurance commissions and fees were up 3.9% quarter-over-quarter and 6.9% year-to-date over 2024 as of the third quarter of 2025.

Regarding technology providers for digital banking platforms, Cullen/Frost Bankers, Inc. uses external technology companies to supply necessary IT products and services for daily operations. Specifically, in November 2025, Frost Bank implemented Derivative Path to power its OTC Derivatives business. Specific financial commitments to vendors like Fiserv or Microsoft Azure for 2025 are not detailed in the readily available public reports. The bank noted that investments in technology are expected to yield nice accretion in 2026.

For financial data and security vendors for compliance and risk management, specific vendor names and associated financial figures for 2025 are not explicitly itemized in the publicly released earnings materials reviewed. The bank must adhere to regulations like the Basel III liquidity framework.

Here's a quick look at some key partnership-related metrics from the 2025 reporting periods:

• Correspondent banks served: Approximately 179 financial institutions.
• Financial centers as of Q1 2025: 200 locations.
• Expansion Deposits (Q3 2025): $2.9 billion.
• Expansion Loans (Q3 2025): $2.1 billion.
• Insurance Commissions & Fees YTD Growth (Q3 2025 vs 2024): 6.9%.
• New Households from Expansion (Q3 2025): Almost 74,000.

You can see the scale of the physical and relationship network in this table:

The bank's strategy relies heavily on its internal bankers driving new commercial relationships, with expansion bankers accounting for 40% of new commercial relationships in the Houston, Dallas, and Austin regions in Q3 2025. Still, the underlying infrastructure depends on these external technology and correspondent relationships.

Finance: draft 13-week cash view by Friday.

Cullen/Frost Bankers, Inc. (CFR) - Canvas Business Model: Key Activities

You're focused on the core engine of Cullen/Frost Bankers, Inc. (CFR) operations, which is heavily weighted toward relationship banking across the state of Texas. The key activities here are about execution in lending, fee-based services, physical presence, regulatory compliance, and technology modernization.

Core commercial and consumer lending operations remain central. This activity drives a significant portion of the net interest income. For the third quarter of 2025, average loans reached $21.5 billion, which was an increase of 6.8 percent compared to the third quarter of 2024. Honestly, this loan growth shows the bank is successfully deploying capital in its core markets.

Wealth management and trust services are a crucial non-interest income driver, benefiting from market performance and client acquisition. Trust and investment management fees for Q3 2025 were up 9.3 percent compared to the third quarter of 2024. This increase was primarily driven by investment management fees, which rose by $2.9 million, and estate fees, which were up by $634,000. The total trust and investment management fees for the quarter were $44.8 million, which is a 9 percent year-on-year rise.

The organic branch network expansion in Texas growth markets is a long-term, capital-intensive activity that is starting to show accretion. The multi-year program, which began in late 2018 with 130 branches, reached a symbolic milestone of 200 branches across Texas by May 19, 2025, with the opening of the Pflugerville Financial Center. This expansion focused heavily on Houston, Dallas, and Austin. For example, the bank has added around 70 branches in those three markets over the past 5-6 years.

Maintaining a strong regulatory capital position is a non-negotiable activity for a bank of this size. The capital ratios consistently exceed the well-capitalized levels required by Basel III minimums. You can see the strength in the latest reported figures.

Developing and enhancing digital banking tools and infrastructure supports the high-touch service model. This activity is reflected in non-interest expenses, which saw increases due to higher technology and equipment costs in Q3 2025, up 9.0 percent year-over-year to $352.5 million.

Here's a quick look at how these key activities translate into the latest reported financial metrics as of late 2025:

The focus on organic growth is evident in the results, but it comes with associated cost growth. The bank is actively managing this balance. The key operational inputs supporting the business model include:

• Generating $463.7 million in net interest income on a taxable-equivalent basis for Q3 2025.
• Managing non-accrual loans to 0.21 percent of total loans as of September 30, 2025, down from 0.52 percent a year prior.
• Reporting a Return on Average Assets (ROAA) of 1.32 percent for Q3 2025.
• Maintaining an Equity to Assets Ratio (period-end) of 8.49 percent at September 30, 2025.

If the branch accretion continues to improve into 2026 as management expects, the expense growth from this activity should moderate relative to revenue gains. Finance: draft 13-week cash view by Friday.

Cullen/Frost Bankers, Inc. (CFR) - Canvas Business Model: Key Resources

You're looking at the core assets backing Cullen/Frost Bankers, Inc. right now, the stuff that makes the whole operation run. It's definitely a mix of hard numbers and intangible strengths that keep them competitive in Texas.

First up is the financial capital base. As of September 30, 2025, Cullen/Frost Bankers, Inc. held $52.5 billion in total assets. That's a solid foundation to work from, especially when you look at how that capital is being utilized, as shown in the Q3 2025 snapshot.

Next, consider the extensive physical branch network across high-growth Texas regions. While other banks are trimming down, Cullen/Frost Bankers, Inc. is actively expanding. According to the FDIC, they operate 209 branches across the state as of mid-2025. This physical footprint supports their organic growth strategy in key markets like Dallas and Austin, where they've been actively increasing their financial center count.

The people are a huge resource, too-the highly-rated, relationship-focused Frost bankers (human capital). They've got over 5,000 employees statewide supporting their Texas-only focus. This team drives the growth, with expansion efforts contributing significantly to recent results; for instance, the expansion represented 37% of total loan growth and 44% of total deposit growth in Q2 2025. That's real impact from the team.

The core deposit base is what funds those loans, and it's substantial. For the third quarter of 2025, average deposits hit $42.1 billion, showing a 3.3% increase year-over-year. This base is sticky, which is exactly what you want in a bank. You see the strength reflected in the fee income, also.

Here are a few more details on the non-interest income streams supporting that deposit base:

• Trust and investment management fees grew by 9.3% year-over-year in Q3 2025.
• Service charges on deposit accounts saw a 14.7% increase year-over-year.
• Total non-interest income for Q3 2025 was $125.6 million.

Finally, you can't overlook the strong brand reputation for customer service in Texas. This isn't just marketing fluff; it's measurable. As of 2025, Frost has earned the highest ranking in customer satisfaction in Texas from the J.D. Power Retail Banking Satisfaction Study℠ for 16 consecutive years. Furthermore, as of 2025, they were the only Texas-based bank to get national recognition for specific categories, including:

• Overall Satisfaction.
• Ease of Doing Business.
• Customer Service in both Small Business and Middle Market Banking segments.

That long-standing trust definitely helps attract and retain those core deposits. Finance: draft 13-week cash view by Friday.

Cullen/Frost Bankers, Inc. (CFR) - Canvas Business Model: Value Propositions

You're looking at how Cullen/Frost Bankers, Inc. keeps its clients loyal in a competitive Texas market. The core value is a full-service offering wrapped in a very specific service model.

Comprehensive banking, investment, and insurance services bundle

Cullen/Frost Bankers, Inc. offers clients a complete suite of financial products across banking, investment management, and insurance, all operating under the Frost brand across Texas. This bundling is a key differentiator for clients wanting a single relationship manager for diverse needs. We see this reflected in the fee income growth, for example, trust and investment management fees grew by 9.3% in the third quarter of 2025. Also, service charges on deposit accounts saw a year-over-year increase of 14.7% in that same quarter.

The scale of the operation supporting this bundle is substantial, with average loans reaching $21.5 billion and average deposits at $42.1 billion as of September 30, 2025.

High-touch, personalized relationship banking model

The company's competitive edge rests on its commitment to relationship banking, which management explicitly links to its expansion strategy of extending the Frost experience to more customers. This model prioritizes personal interaction alongside digital tools. The focus is on delivering quality service that differentiates Cullen/Frost Bankers, Inc. from larger, more impersonal institutions.

Financial stability and safety (strong capital ratios, low credit loss expense of $6.8 million in Q3 2025)

Financial strength is a primary value proposition, giving customers confidence in the safety of their funds. The credit loss expense for the third quarter of 2025 was just $6.8 million, a significant drop from the $19.4 million recorded in the third quarter of 2024. The allowance for credit losses on loans remained steady at 1.31% of total loans at September 30, 2025.

Capitalization remains robust, comfortably exceeding regulatory requirements. Here are the specific ratios reported at the end of Q3 2025:

Free checking accounts and minimal fees for consumers

Cullen/Frost Bankers, Inc. actively works to keep basic banking accessible and low-cost for consumers. The Frost Personal Account offers a 0 monthly service charge if you meet any one of several easy thresholds. You qualify if you meet any one of these conditions:

• Direct deposits, mobile deposits, or Zelle credits total $100 or more.
• Keep a minimum daily balance of $1,000.
• Maintain $5,000 combined average daily balances across personal deposit accounts.
• An owner on the account is under 25.

Furthermore, the bank provides a significant buffer against unexpected charges. Overdraft fees of $35 are waived if the overdraw amount is $100 or less under standard overdraft practices. The maximum daily fee is capped at $105.

Seamless integration of digital tools with personal service

The strategy emphasizes that digital tools are meant to complement, not replace, personal service. Management has stated a continued focus on enhancing digital banking tools while maintaining an empathetic customer experience. This is about giving you the convenience of modern technology-like early access to direct deposits up to two days sooner-while ensuring a human relationship is available when needed.

Cullen/Frost Bankers, Inc. (CFR) - Canvas Business Model: Customer Relationships

You're looking at how Cullen/Frost Bankers, Inc. keeps its customers close, especially when the bank itself has grown to hold $52.5 billion in assets as of December 31, 2024.

Dedicated, personal relationship management model

The focus on personal interaction remains a core tenet, even with expansion. For instance, in the first quarter of 2025, Frost commercial bankers made a record 54,000 calls, and nearly two-thirds of those calls were directed toward existing customers, showing a clear prioritization of current relationships over purely new acquisition efforts during that period. This approach supports the long-term view of the business.

High customer satisfaction ratings (e.g., J.D. Power recognition in Texas)

The dedication to service translates directly into measurable results. Frost Bank achieved the highest ranking for retail banking customer satisfaction in Texas for the 16th consecutive year in the J.D. Power 2025 U.S. Retail Banking Satisfaction Study℠. This sustained performance is a key indicator of relationship health.

Here's a quick look at the 2025 J.D. Power results:

Long-term, trust-based relationships with commercial clients

The emphasis on deep client ties is evident in the activity reports. The bank stresses its commitment to building these relationships, which management noted was a driver for consistent organic growth, such as the 5.4% year-over-year growth in consumer checking households recorded in the third quarter of 2025.

The dimensions where Frost Bank ranked No. 1 in the 2025 J.D. Power study underscore the relationship focus:

• Trust
• People
• Account offerings
• Banking accessibility
• Saving time and money
• Digital channels

Proactive communication and empathetic customer experience

Management commentary from the third quarter of 2025 highlighted remaining laser-focused on delivering an empathetic customer experience alongside digital tools. This commitment is seen as fueling industry-leading organic growth. The bank's success in dimensions like People and Trust in the J.D. Power study directly reflects this proactive, empathetic approach.

Self-service options via digital channels

While personal service is key, digital adoption is strong and recognized. Frost Bank ranked No. 1 in the digital channels dimension in the 2025 J.D. Power study. This aligns with broader market trends where, as of 2025, a significant majority-77 percent-of consumers prefer to manage their bank accounts through a mobile app or a computer. The bank's digital offerings are clearly meeting this high expectation for self-service convenience.

Finance: draft 13-week cash view by Friday.

Cullen/Frost Bankers, Inc. (CFR) - Canvas Business Model: Channels

The Channels component for Cullen/Frost Bankers, Inc. centers on a deliberate, Texas-centric, multi-touchpoint approach, blending a significant physical footprint with targeted digital enhancements.

Physical branch locations in major Texas metropolitan areas

Cullen/Frost Bankers, Inc. maintains a substantial physical presence, actively expanding where other banks may be contracting. As of 2025, Frost has nearly 200 financial centers across key Texas markets. This physical network is strategically concentrated in high-growth areas, including the San Antonio, Austin, Corpus Christi, Dallas, Fort Worth, Houston, Permian Basin, and Rio Grande Valley regions. The expansion strategy is showing traction; for instance, in the third quarter of 2025, new branches in Houston, Dallas, and Austin contributed 38% of total loan growth and 39% of deposit growth. That's real money flowing through those newer doors.

The scale of the physical and digital reach can be summarized here:

Digital banking platforms (mobile app and website)

The digital channel is a clear area of investment, reflecting a commitment to modern delivery alongside physical expansion. Chairman and CEO Phil Green highlighted the strategic focus on 'enhancing digital banking tools' during the third quarter of 2025 earnings call. This focus is supported by financial commitment, as non-interest expenses, which include technology and equipment costs, rose by 9.0% year-over-year in Q3 2025. The goal is to deliver top-quality digital banking tools along with an empathetic customer experience.

Dedicated commercial and wealth management relationship officers

The success in expansion markets points directly to the effectiveness of relationship-based selling, driven by dedicated officers. The organic expansion strategy is designed to build upon a well-established reputation, which requires high-touch service. The growth in consumer checking households in Q3 2025 was the strongest since early 2023, suggesting strong personal relationship acquisition. Furthermore, trust and investment management fees, often driven by dedicated wealth management officers, increased by 9.3% in Q3 2025.

Extensive ATM network

Cullen/Frost Bankers, Inc. supports its physical presence with a wide-reaching ATM footprint, which is noted as the largest in the state of Texas. While the most recent comprehensive number is from the end of 2022, at that time, Frost operated approximately 1,729 automated-teller machines (ATMs) throughout Texas. This network is supplemented by targeted local density, such as the over 140 ATMs in the Austin region alone as of 2023.

Brand visibility via sponsorships (e.g., Frost Bank Center naming rights)

High-profile sponsorships serve to cement the brand within the Texas consciousness, particularly in the San Antonio market. The arena where the San Antonio Spurs play is now the Frost Bank Center, a name change official in September 2023. While the specific terms of the current deal are undisclosed, the prior AT&T naming rights deal was reportedly worth $41 million over 20 years. The team's lease for the facility extends through 2032, anchoring this visibility for the foreseeable future. The bank's relationship with the Spurs dates back 50 years, highlighting a deep, long-term commitment to community presence.

• Frost Bank earned the highest ranking in customer satisfaction in Texas in the J.D. Power Retail Banking Satisfaction Study℠ for 16 consecutive years as of 2025.
• As of Q3 2025, Cullen/Frost Bankers, Inc. had a Common Equity Tier 1 Ratio of 14.14 percent, exceeding well-capitalized levels.
• The company reported a quarterly dividend of $1.00 per common share in Q3 2025.

Cullen/Frost Bankers, Inc. (CFR) - Canvas Business Model: Customer Segments

You're looking at the core client base for Cullen/Frost Bankers, Inc. (CFR) as of late 2025. This bank is definitely focused on its Texas footprint, using its deep local knowledge to serve a spectrum of clients, from the largest corporations down to individual consumers.

The primary customer base is anchored in the Texas economy, serving businesses across its key regions like Houston, Dallas, Fort Worth, Austin, and the Permian Basin. As of September 30, 2025, Cullen/Frost Bankers, Inc. reported total assets of $52.5 billion.

The segments are clearly delineated by the services they require:

• Commercial Businesses: Middle-market and small businesses in Texas needing financing for working capital, equipment, and acquisitions, supported by treasury management services.
• Affluent and High-Net-Worth Individuals: Clients utilizing wealth and trust management services. Trust and investment management fees showed growth, increasing 9.8% year-over-year in the first quarter of 2025.
• Mass-Market Consumers: Individuals and families across Texas. The organic expansion strategy is successfully attracting new retail customers, with CEO Phil Green noting a record growth in consumer checking households in the third quarter of 2025.
• Commercial Real Estate (CRE) Developers and Investors: Entities requiring financing for income-producing properties. At March 31, 2025, the combined commercial real estate and multi-family real estate mortgage loan portfolios totaled $592.2 million and $91.5 million, respectively.
• Institutional Investors and Public Entities: These clients are served by one of the 50 largest U.S. banks, relying on the bank's overall scale and capital strength.

The bank's aggressive expansion strategy is a key driver for acquiring new customers across the board. By the end of the second quarter of 2025, these expansion efforts alone had generated almost 69,000 new households. This focus on new customer acquisition is a major theme for Cullen/Frost Bankers, Inc.

For the Commercial Real Estate segment specifically, the portfolio composition shows a clear preference for stabilized assets over pure development risk as of early 2025:

The mass-market consumer segment is showing tangible results from the expansion, which is critical for deposit growth. For context, average deposits for the entire institution stood at $41.8 billion in the second quarter of 2025. The success in attracting new checking accounts is a direct input to this larger deposit base.

Here's a snapshot of the scale and performance metrics relevant to serving these segments in mid-2025:

The focus on new commercial relationships is also paying off, as the bank saw increased commercial activity and a high level of new commercial relationships contributing to loan growth. Finance: draft 13-week cash view by Friday.

Cullen/Frost Bankers, Inc. (CFR) - Canvas Business Model: Cost Structure

You're looking at the core expenses driving Cullen/Frost Bankers, Inc.'s operations as of late 2025. These are the necessary outflows to keep the lights on and the growth engine running, so let's look at the hard numbers from the latest reports.

Interest expense on deposits and borrowings (cost of funds) is a major component, though the total dollar amount for Q3 2025 wasn't explicitly isolated in the latest releases. We do know the cost of interest-bearing accounts in the second quarter of 2025 was reported at 1.93%. This cost structure directly impacts the Net Interest Income (NII), which for the third quarter of 2025 totaled $463.7 million on a taxable-equivalent basis.

The non-interest expenses for the third quarter of 2025 hit $352.5 million, which was an increase of 9.0 percent compared to the third quarter of 2024's $323.4 million. A significant driver within this total is personnel costs, which you asked about specifically.

• Salaries and wages expense increased by $12.5 million, or 8.0 percent, compared to the third quarter of 2024.
• Employee benefits expense increased by $5.4 million, or 18.6 percent, compared to the third quarter of 2024.

The bank is making concrete investments in its digital future, which shows up in the technology line item.

The costs associated with organic expansion are being tracked by management, with the increase in the number of employees partly attributed to this investment. While a specific total cost for build-outs isn't broken out, the results are starting to show in the earnings accretion figures. The first Houston expansion branches are now profitable, while the newest Austin branches remain loss-making. For the third quarter of 2025, the expansion branches contributed $0.09 per share in EPS accretion.

Finally, the Provision for credit losses, which is the expense set aside for expected loan losses, was $6.8 million for the third quarter of 2025. This was a significant decrease from the $13.1 million reported in the second quarter of 2025.

Finance: draft 13-week cash view by Friday.

Cullen/Frost Bankers, Inc. (CFR) - Canvas Business Model: Revenue Streams

The revenue streams for Cullen/Frost Bankers, Inc. (CFR) are fundamentally anchored in traditional banking activities, supplemented by significant fee-based services across its wealth management and insurance segments. As of the third quarter of 2025, the core engine remains the spread between what the bank earns on its assets and what it pays on its liabilities.

Net Interest Income (NII), derived from loans and securities, was reported at $463.7 million on a taxable-equivalent basis for Q3 2025. This figure represented a 9.1 percent increase compared to the third quarter of 2024. Historically, NII has comprised the largest portion of total revenue, making up approximately 76.3% of total revenue over the last five years.

Non-interest income, which is fee-based revenue, totaled $125.6 million in Q3 2025, marking a 10.5 percent increase year-over-year. This segment is detailed below, showing growth across several key service lines.

You can see the key Q3 2025 figures and relevant context in the table below:

The growth in fee-based revenue is supported by specific activities within the wealth management and service charge areas. Trust and investment management fees reached $44.8 million in Q3 2025. The increase of $3.8 million year-over-year was primarily driven by two factors:

• Investment management fees (up $2.9 million)
• Estate fees (up $634,000)

Service charges on deposit accounts saw a substantial year-over-year increase of 14.7 percent, which translated to an additional $4.0 million in revenue compared to Q3 2024. This growth was fueled by increases in both commercial and consumer fee lines.

The category encompassing commercial leasing and insurance commissions falls within the broader Other Charges, Commissions, and Fees segment, which grew by 12.8 percent, or $1.7 million. Within this segment, specific contributions noted include:

• Income from the placement of annuities (up $470,000)
• Letter of credit fees (up $441,000)
• Income from the placement of mutual funds (up $301,000)

Insurance commissions and fees specifically showed a 3.9% increase on a linked-quarter basis (QoQ). While the exact Q3 2025 dollar amount for insurance commissions and fees is not explicitly isolated from the remaining components of the Other Charges, Commissions, and Fees line item, the overall segment growth reflects positive momentum in these ancillary services, which are aligned with the organic expansion strategy.