Operating Segments

12 Months Ended

Dec. 31, 2025

Segment Reporting [Abstract]

Operating Segments

Operating Segments

We are managed under a matrix organizational structure whereby our two primary operating segments, Banking and Frost Wealth Advisors, overlap a regional reporting structure. The regions are primarily based upon geographic location and include Austin, Dallas, Fort Worth, Gulf Coast (which includes Corpus Christi and the Rio Grande Valley), Houston, Permian Basin, San Antonio and Statewide. We are primarily managed based on the line of business structure. In that regard, all regions have the same lines of business, which have the same product and service offerings, have similar types and classes of customers and utilize similar service delivery methods. Pricing guidelines for products and services are the same across all regions. The regional reporting structure is primarily a means to scale the lines of business to provide a local, community focus for customer relations and business development.

Banking and Frost Wealth Advisors are delineated by the products and services that each segment offers. The Banking operating segment includes both commercial and consumer banking services and Frost Insurance Agency. Commercial banking services are provided to corporations and other business customers and include a wide array of lending and cash management products. Consumer banking services include direct lending and depository services. Frost Insurance Agency provides insurance brokerage services to individuals and businesses covering corporate and personal property and casualty products, as well as group health and life insurance products. The Frost Wealth Advisors operating segment includes fee-based services within private trust, retirement services, and financial management services, including personal wealth management and securities brokerage services. A third operating segment, Non-Banks, is for the most part the parent holding company, as well as certain other insignificant non-bank subsidiaries of the parent that, for the most part, have little or no activity. Non-banks also includes certain eliminating amounts. The parent company’s principal activities include the direct and indirect ownership of our banking and non-banking subsidiaries and the issuance of debt and equity. Our principal source of revenue is dividends from our subsidiaries.

The accounting policies of each reportable segment are the same as those of our consolidated entity except for the following items, which impact the Banking and Frost Wealth Advisors segments: (i) expenses for consolidated back-office operations and general overhead-type expenses such as executive administration, accounting and internal audit are allocated to operating segments based on estimated uses of those services, and (ii) the parent company records the tax expense or benefit necessary to reconcile to the consolidated total.

Our chief executive officer is our chief operating decision maker. We use a match-funded transfer pricing process to allocate costs, capital and resources to each operating segment. The process helps us to (i) identify the cost or opportunity value of funds within each business segment, (ii) measure the profitability of a particular business segment by relating appropriate costs to revenues, (iii) evaluate each business segment in a manner consistent with its economic impact on consolidated earnings, and (iv) enhance asset and liability pricing decisions. Our chief executive officer reviews actual net income versus budgeted net income to assess segment performance on a monthly basis and to make decisions about allocating capital and personnel to the segments.

Financial results by operating segment, including significant expense categories provided to the chief operating decision maker, are detailed below. Certain prior period amounts have been reclassified to conform to the current presentation. Frost Wealth Advisors excludes off-balance-sheet managed and custody assets with a total fair value of $51.0 billion, $51.4 billion and $47.2 billion at December 31, 2025, 2024 and 2023.

	Banking		Frost Wealth Advisors		Non-Banks		Consolidated
2025
Interest income	$	2,412,807	$	7,940	$	—	$	2,420,747
Interest expense	671,866		386		12,346		684,598
Net interest income (expense)	1,740,941		7,554		(12,346)		1,736,149
Credit loss expense	44,202		—		—		44,202
Net interest income after credit loss expense	1,696,739		7,554		(12,346)		1,691,947
Non-interest income:
Trust and investment management fees	—		178,234		(1,137)		177,097
Service charges on deposit accounts	121,558		14		—		121,572
Insurance commissions and fees	65,502		—		—		65,502
Interchange and card transaction fees	22,858		—		—		22,858
Other charges, commissions and fees	32,037		25,474		—		57,511
Net gain (loss) on securities transactions	(850)		—		—		(850)
Other	49,110		6,071		224		55,405
Total non-interest income	290,215		209,793		(913)		499,095
Non-interest expense:
Salaries and wages	593,755		79,309		1,583		674,647
Employee benefits	131,159		14,842		100		146,101
Net occupancy	122,458		14,482		—		136,940
Technology, furniture and equipment	159,341		6,203		200		165,744
Deposit insurance	18,720		32		—		18,752
Other	215,405		56,999		4,752		277,156
Total non-interest expense	1,240,838		171,867		6,635		1,419,340
Income (loss) before income taxes	746,116		45,480		(19,894)		771,702
Income tax expense (benefit)	119,877		9,551		(6,283)		123,145
Net income (loss)	626,239		35,929		(13,611)		648,557
Preferred stock dividends	—		—		6,675		6,675
Net income (loss) available to common shareholders	$	626,239	$	35,929	$	(20,286)	$	641,882
Revenues from (expenses to) external customers	$	2,031,156	$	217,347	$	(13,259)	$	2,235,244
Average assets (in millions)	$	51,807	$	73	$	9	$	51,889

	Banking		Frost Wealth Advisors		Non-Banks		Consolidated
2024
Interest income	$	2,382,675	$	7,962	$	—	$	2,390,637
Interest expense	772,075		421		13,529		786,025
Net interest income (expense)	1,610,600		7,541		(13,529)		1,604,612
Credit loss expense	64,985		—		—		64,985
Net interest income after credit loss expense	1,545,615		7,541		(13,529)		1,539,627
Non-interest income:
Trust and investment management fees	—		167,448		(2,178)		165,270
Service charges on deposit accounts	106,217		13		—		106,230
Insurance commissions and fees	61,269		—		—		61,269
Interchange and card transaction fees	21,017		—		—		21,017
Other charges, commissions and fees	30,626		22,717		5		53,348
Net gain (loss) on securities transactions	(96)		—		—		(96)
Other	45,790		6,011		259		52,060
Total non-interest income	264,823		196,189		(1,914)		459,098
Non-interest expense:
Salaries and wages	544,843		74,928		1,623		621,394
Employee benefits	109,431		12,911		104		122,446
Net occupancy	115,136		13,615		—		128,751
Technology, furniture and equipment	142,517		5,764		206		148,487
Deposit insurance	37,203		66		—		37,269
Other	189,700		49,790		4,921		244,411
Total non-interest expense	1,138,830		157,074		6,854		1,302,758
Income (loss) before income taxes	671,608		46,656		(22,297)		695,967
Income tax expense (benefit)	110,524		9,798		(6,897)		113,425
Net income (loss)	561,084		36,858		(15,400)		582,542
Preferred stock dividends	—		—		6,675		6,675
Net income (loss) available to common shareholders	$	561,084	$	36,858	$	(22,075)	$	575,867
Revenues from (expenses to) external customers	$	1,875,423	$	203,730	$	(15,443)	$	2,063,710
Average assets (in millions)	$	49,621	$	64	$	9	$	49,694

	Banking		Frost Wealth Advisors		Non-Banks		Consolidated
2023
Interest income	$	2,209,659	$	8,057	$	—	$	2,217,716
Interest expense	647,218		437		11,397		659,052
Net interest income (expense)	1,562,441		7,620		(11,397)		1,558,664
Credit loss expense	46,171		—		—		46,171
Net interest income after credit loss expense	1,516,270		7,620		(11,397)		1,512,493
Non-interest income:
Trust and investment management fees	—		155,278		(1,963)		153,315
Service charges on deposit accounts	93,478		26		—		93,504
Insurance commissions and fees	58,271		—		—		58,271
Interchange and card transaction fees	19,419		—		—		19,419
Other charges, commissions and fees	30,217		18,809		—		49,026
Net gain (loss) on securities transactions	66		—		—		66
Other	49,868		4,793		280		54,941
Total non-interest income	251,319		178,906		(1,683)		428,542
Non-interest expense:
Salaries and wages	480,083		66,070		1,565		547,718
Employee benefits	103,427		11,776		103		115,306
Net occupancy	109,953		14,443		—		124,396
Technology, furniture and equipment	129,042		6,054		190		135,286
Deposit insurance	76,535		54		—		76,589
Other	178,784		46,081		4,502		229,367
Total non-interest expense	1,077,824		144,478		6,360		1,228,662
Income (loss) before income taxes	689,765		42,048		(19,440)		712,373
Income tax expense (benefit)	111,145		8,830		(5,575)		114,400
Net income (loss)	578,620		33,218		(13,865)		597,973
Preferred stock dividends	—		—		6,675		6,675
Net income (loss) available to common shareholders	$	578,620	$	33,218	$	(20,540)	$	591,298
Revenues from (expenses to) external customers	$	1,813,760	$	186,526	$	(13,080)	$	1,987,206
Average assets (in millions)	$	49,536	$	59	$	9	$	49,604