CULLEN/FROST BANKERS, INC.CFR

CULLEN/FROST BANKERS, INC. Earnings Per Share Disclosure

10-KFiled Feb 5, 20262 min read
Earnings Per Common Share
Earnings Per Common Share. Earnings per common share is computed using the two-class method. Basic earnings per common share is computed by dividing net earnings allocated to common stock by the weighted-average number of common shares outstanding during the applicable period, excluding outstanding participating securities. Participating securities include non-vested restricted stock units, deferred stock units and performance stock units (during the performance period), though no actual shares of common stock related to any type of stock unit have been issued. Non-vested restricted stock units and deferred stock units are considered participating securities because holders of these securities receive non-forfeitable dividends at the same rate as holders of our common stock. Holders of performance stock units receive dividend equivalent payments for dividends paid during the performance period at the vesting date of the award based upon the number of units that ultimately vest. Diluted earnings per common share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method.
The following table presents a reconciliation of net income available to common shareholders, net earnings allocated to common stock and the number of shares used in the calculation of basic and diluted earnings per common share.
202520242023
Net Income$648,557 $582,542 $597,973 
Less: Preferred stock dividends6,675 6,675 6,675 
Net income available to common shareholders641,882 575,867 591,298 
Less: Earnings allocated to participating securities6,409 6,236 6,283 
Net earnings allocated to common stock$635,473 $569,631 $585,015 
Distributed earnings allocated to common stock$252,823 $239,879 $229,749 
Undistributed earnings allocated to common stock382,650 329,752 355,266 
Net earnings allocated to common stock$635,473 $569,631 $585,015 
Weighted-average shares outstanding for basic earnings per common share
64,054,228 64,120,455 64,204,239 
Dilutive effect of stock compensation45,010 142,191 200,594 
Weighted-average shares outstanding for diluted earnings per common share
64,099,238 64,262,646 64,404,833 

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

Income TaxesRevenueFair ValuePP&EGoodwill & IntangiblesSegmentsDebtCommitmentsNew StandardsPay vs Performance