Frost Bank Sees Strong Growth From Texas Branch Expansion

The San Antonio-based bank is focused on organic growth through new branch openings rather than acquisitions.

Jan. 29, 2026 at 5:07pm

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Cullen/Frost Bankers Inc., the parent company of Frost Bank, reported strong fourth-quarter and full-year 2025 earnings driven by its ongoing branch expansion across Texas. The bank's CEO said Frost has "zero interest" in making acquisitions, instead preferring to grow organically by opening new locations in Houston, Dallas and Austin. Frost's strategy of branch expansion over M&A has paid off, with the bank adding $1 billion in assets by opening 25 new branches in Houston for just $90 million, compared to banks paying $220 million for $1 billion in assets through acquisitions.

Why it matters

Frost Bank's success in growing through branch openings rather than acquisitions highlights the benefits of an organic growth strategy in the banking industry, where consolidation has been on the rise. The bank's focus on expanding its physical footprint in key Texas markets has allowed it to attract new customers and bankers without the costs and challenges often associated with mergers and acquisitions.

The details

Frost Bank reported net income of $166.3 million, or $2.56 per share, on $603.4 million in revenue in the fourth quarter of 2025, exceeding the average analyst estimate of $2.45 per share. For the full year 2025, the bank earned $648.6 million, or $9.92 per share, on $2.32 billion in revenue, also beating expectations. Frost's loan demand remained strong, with total loans averaging $21.7 billion in the fourth quarter, up 6.5% from the same period in 2024. The bank's branch expansion strategy has been a key driver of this growth, with Frost opening 75 new locations since 2018 to reach a total of 206 financial centers across Texas, a 57% increase.

  • Frost Bank launched its initial Houston branch expansion in 2018.
  • Frost Bank reached $595 million in mortgage loans by the end of 2025, exceeding its goal of $500 million.
  • Frost Bank is forecasting quarter-point interest rate cuts by the Federal Reserve in April, July and October.

The players

Cullen/Frost Bankers Inc.

The parent company of Frost Bank, the largest bank based in San Antonio with $53 billion in assets.

Phil Green

Chairman and CEO of Cullen/Frost Bankers Inc.

Frost Bank

A regional bank focused on growth in Texas, with 206 financial centers across the state.

Dan Geddes

Chief Financial Officer of Frost Bank.

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What they’re saying

“We 'have zero interest in making an acquisition.' We have done it a fair amount in the past. And so we know how to do it. But we also know what's good about it and what's bad about it — or not as good' as opening more branches.”

— Phil Green, Chairman and CEO, Cullen/Frost Bankers Inc. (expressnews.com)

“That's more fun than giving huge amounts of your company away to somebody else and then trying to convince everyone to stay and then trying to convince the customers to stay who didn't choose you. To me, it's more fun to have bankers choose you and come work for you, and then have customers choose you.”

— Phil Green, Chairman and CEO, Cullen/Frost Bankers Inc. (expressnews.com)

What’s next

Frost Bank is forecasting quarter-point interest rate cuts by the Federal Reserve in April, July and October, which could impact the bank's future earnings and growth strategy.

The takeaway

Frost Bank's success in growing through organic branch expansion rather than acquisitions demonstrates the benefits of a disciplined, customer-focused growth strategy in the banking industry, where consolidation has been on the rise. The bank's approach has allowed it to attract new customers and talent while maintaining its distinct culture and identity.