EL7.AI
StocksMedium•30 October 2026•
3 min read

Cullen/Frost Raises 2026 Loan Growth Forecast to 8%–8.5% as Pipeline Hits Record

Key Facts

1Cullen/Frost raised its 2026 net interest income growth forecast to 5%–5.5% from 4.75%–5.25%.
2The company raised its average loan growth forecast to 8%–8.5% from 7%–8%, and its fee income growth forecast to 8.5%–9% from 7.5%–8.5%.
3Average loans reached $23.4 billion in the third quarter, up 9% year over year.
4The 90-day weighted commercial loan pipeline hit a record $2.5 billion, up 16% from the previous record.

Cullen/Frost raised its 2026 forecast for net interest income growth to a range of 5%–5.5%, from 4.75%–5.25% previously, in an update announced during its third-quarter earnings call on October 29. The company raised its forecast for average annual loan growth to 8%–8.5%, compared with previous guidance of 7%–8%. It also increased its forecast for fee income, or noninterest income, growth to 8.5%–9% from 7.5%–8.5%. The revisions came as the company reported net income available to common shareholders of $178.5 million in the third quarter, compared with $172.7 million a year earlier. Diluted earnings per share rose to $2.84 from $2.67, according to the company's earnings release.

The higher loan estimate reflected stronger lending activity, with average loans reaching $23.4 billion in the third quarter, up 9% year over year. The annual increase in the second quarter was 7.4%, when average loans reached $22.6 billion, indicating growth accelerated between the periods. The company said its 90-day weighted commercial loan pipeline reached a record $2.5 billion in the third quarter. The pipeline was up 16% from the previous record set in the second quarter. Cullen/Frost, meanwhile, kept its 2026 forecast for average deposit growth at 2%–3%, unchanged from previous guidance.

Average deposits stood at $43.6 billion in the third quarter, up 3.6% from a year earlier, according to the earnings release. Noninterest income rose to $136 million, an annual increase of 8.2%. Trust and investment management fees grew 10.3% over the same period, helping support fee income. Net interest margin was 3.78% in the third quarter, compared with 3.69% a year earlier and 3.75% in the previous quarter. The company kept its forecast for annual margin improvement in 2026 at 10–13 basis points above the 2025 level of 3.66%, the same guidance it gave a quarter earlier.

On costs, Cullen/Frost forecast annual noninterest expense growth of about 5% in 2026, at the top end of its previous range of 4.5%–5%. The company linked the estimate to additional incentive accruals and advertising spending. Second-quarter results offer earlier context for growth: the chief executive said then that earnings per share had increased 13% year over year, describing the company's performance as sustainable, balanced growth alongside accelerating deposits and loans. In the third-quarter earnings release, the chief executive said the banking customer base grew at an annual rate of 5%. He attributed expansion opportunities to individuals and businesses moving to Texas from other parts of the United States, saying the company sees “a tremendous opportunity to continue to bring the Frost experience to more new Texans.”

Cullen/Frost had beaten second-quarter earnings expectations, supported by growth in interest and fee income, according to an EL7 report published on July 31. The company's stock closed at $157.85 on October 29, up 0.54% from the previous close, according to its official data. The board declared a fourth-quarter cash dividend of $1.03 per common share. The dividend is payable on December 15, 2026, to shareholders of record on November 30, 2026. These dates put the next dividend payment after the forecast update and third-quarter results announcement.