Frost Bank is moving forward with its expansion plans in Texas, opening new branches and reporting increased mortgage refinancing activity after a recent rate cut. The San Antonio-based bank will open a branch in Kerrville in late December, followed by another in Fredericksburg next spring.
CEO Phil Green said the decision to lower mortgage rates to 5.75 percent in September has led to more home mortgage and refinancing lending. “We struck a nerve on the refinance point,” Green said. “We’re seeing refinance activity in addition to purchase money activity.” He noted that many customers with adjustable-rate mortgages are switching to fixed-rate loans before their rates reset.
Since 2018, Frost Bank has opened about 70 branches and reached its 200th location earlier this year in Pflugerville, near Austin. This approach comes as other banks reduce their physical presence.
Green stated that Frost Bank is not seeking acquisitions despite industry consolidation. “We believe our organic growth success is at the top end of the industry,” he said. “If you can do it yourself, you spend a third to half less than what you’d pay in an acquisition.”
The bank’s strategy combines technology improvements, customer service, and selective branch openings. According to Green, this method has been both scalable and cost-effective.
Frost Bank recently reported strong third-quarter financial results. Net income increased by 19 percent year-over-year to $172.7 million, or $2.67 per share, surpassing Wall Street expectations by 29 cents per share. Net interest income rose by 9 percent to $463.7 million as margins widened to 3.69 percent. Average loans grew by nearly 7 percent to $21.5 billion, deposits increased by over 3 percent to $42.1 billion, and nonperforming loans dropped by more than half to $44.8 million—the lowest since before the pandemic.
