SAN ANTONIO — Texas regional banks are outperforming their national peers, with several institutions reporting record earnings driven by strong loan demand from the state's booming economy.

Cullen/Frost Bankers, the San Antonio-based parent of Frost Bank, reported quarterly earnings of $156 million, up 24% from a year ago. The bank attributed the results to robust commercial lending activity and disciplined expense management.

"Texas businesses are investing and expanding, and we're proud to be their banking partner," said CEO Phil Green. "Our loan portfolio has grown 15% year-over-year, with particular strength in energy, healthcare, and commercial real estate."

Interest Rate Environment Favors Texas Banks

The elevated interest rate environment has benefited Texas banks with strong deposit bases. Unlike some national banks that have seen deposit outflows, Texas institutions have maintained stable funding thanks to their deep relationships with local businesses and consumers.

Prosperity Bancshares, headquartered in Houston, reported a net interest margin of 3.42%, among the highest in the industry. The bank has expanded aggressively through acquisitions, now operating over 270 branches across Texas.