Cullen/frost Bankers (CFR) has disclosed a new risk, in the Debt & Financing category.
Cullen/Frost Bankers faces a nuanced operational risk as rising market interest rates trigger substantial unrealized losses within its securities portfolio. These losses, while not affecting regulatory capital ratios, erode the book capital and tangible common equity, potentially influencing liquidity. Should the bank be compelled to liquidate securities at a loss, the resultant shrinkage in capital ratios, coupled with potential funding limitations or regulatory constraints, could impair liquidity sources. Moreover, significant unrealized losses might harm the bank’s reputation, risking depositor confidence and prompting withdrawal surges, especially from holders of uninsured deposits.
The average CFR stock price target is $115.57, implying 14.19% upside potential.
To learn more about Cullen/frost Bankers’ risk factors, click here.
