Jon Arfstrom's questions to CULLEN/FROST BANKERS (CFR) leadership • Q2 2025
Question
Jon Arfstrom from RBC Capital Markets asked about the sources of lending competition, the quantitative impact of a rate cut on NII, and the timeline for the branch expansion initiative to achieve returns comparable to legacy branches.
Answer
CEO Phillip Green identified lending competition as broad-based but noted recent aggression from smaller banks on underwriting. CFO Dan Geddes quantified the impact of a 25 basis point rate cut at approximately $1.8 million per month. He explained that the overall expansion project is currently at breakeven, with mature Houston branches funding newer ones in Dallas and Austin. He estimated it would be another three to four years before the portfolio of branches matures enough to significantly lift overall returns.