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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

January 22, 2024

Date of Report (date of earliest event reported)

CROSSFIRST BANKSHARES, INC.

(Exact name of registrant as specified in its charter)

Kansas

001-39028

26-3212879

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(I.R.S. Employer Identification No.)

11440 Tomahawk Creek Parkway     Leawood     Kansas

(Address of Principal Executive Offices)

66211

(Zip Code)

(913) 901-4516

Registrant’s telephone number, including area code

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $0.01 per share

CFB

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 2.02.    Results of Operations and Financial Condition.

On January 22, 2024, CrossFirst Bankshares, Inc. (the “Company”) announced that it had released its financial results for its fourth quarter and the full year ended December 31, 2023. A copy of the full text of the related press release, which is posted on the Investor Section of the Company’s website (investors.crossfirstbankshares.com) under Financials – Quarterly Reports, is furnished as Exhibit 99.1 hereto and incorporated by reference into this Item 2.02. The Company does not intend for information contained on its website to be part of this report.

The Company intends to hold a conference call to review fourth quarter and full year 2023 financial results. The investor presentation, which will accompany the call, is furnished as Exhibit 99.2 hereto and incorporated herein by reference.

The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2, is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly stated in such a filing.

Item 9.01.   Financial Statements and Exhibits.

(d)Exhibits

99.1

    

Press Release Issued January 22, 2024

99.2

Investor Presentation

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:

January 22, 2024

CROSSFIRST BANKSHARES, INC.

By:

/s/ Benjamin R. Clouse

Benjamin R. Clouse

Chief Financial Officer

Exhibit 99.1

Graphic

CrossFirst Bankshares, Inc. Reports Fourth Quarter and Record Full Year 2023 Results

LEAWOOD, Kan., January 22, 2024 (GLOBE NEWSWIRE) -- CrossFirst Bankshares, Inc. (Nasdaq: CFB), the bank holding company for CrossFirst Bank, today reported fourth quarter net income of $17.7 million, or $0.35 per diluted common share, and full year net income of $66.7 million, or a record $1.34 per diluted common share. Adjusted net income was $19.6 million, or $0.39 per diluted common share on an adjusted basis, for the fourth quarter and $72.8 million, or $1.47 per diluted common share on an adjusted basis, for the full year.

Fourth Quarter 2023 Key Financial Performance Metrics

Net Income

ROAA(1)

Net Interest Margin – Fully Tax Equivalent (“FTE”)(1)

Diluted EPS

ROCE(1)

$17.7 million

0.97%

3.23%

$0.35

10.71%

Adjusted Fourth Quarter 2023 Key Financial Performance Metrics(2)

Adjusted Net Income

Adjusted ROAA(1)

Net Interest Margin -FTE(1)

Adjusted Diluted EPS

Adjusted ROCE(1)

$19.6 million

1.07%

3.23%

$0.39

11.89%

CEO Commentary:

“Despite a challenging macro-economic environment, CrossFirst had an incredible year. We closed on the acquisition of Canyon Community Bank, opened two prominent Texas locations, launched our new digital banking platform, and grew earnings by 6% on an adjusted basis during the year,” said Mike Maddox. “This was all in spite of a historic rise in rates that put significant pressure on margin.”

2023 Fourth Quarter and Full Year Highlights:

Improved profitability as operating revenue and diluted earnings per common share increased compared to the prior quarter and the prior year fourth quarter; Full year 2023 operating revenue grew 16% compared to the prior year
Grew loans $182 million, or 3%, for the quarter and 14% for the full year 2023, including a 2% benefit for the full year from acquired loans
Grew deposits $159 million, or 3%, for the quarter and 15% for the full year 2023, highlighting the benefits of our relationship banking model; Deposits for the full year benefited 3% from acquired balances
Non-performing assets decreased to 0.34% of total assets from the prior quarter; Net charge-offs for the full year were 0.09% of average loans
Reduced non-interest expense compared to the prior quarter and the same quarter in the prior year as we realized anticipated synergies from our acquisitions as well as executed targeted efficiency initiatives
Grew book value per common share 14% to $14.35 at December 31, 2023 compared to the prior year end. Tangible book value per common share(2) also grew 13% to $13.56
Built capital in a tough operating environment with total risk-based capital increasing to 11.2% and common equity Tier 1 capital increasing to 10.0%
Executed a bond portfolio repositioning, which is expected to benefit future earnings, improve liquidity and regulatory capital ratios; The $1.1 million pre-tax loss on sale is expected to have less than a one-year earn back
Completed the integration in connection with the acquisition of Canyon Bancorporation, Inc. and its wholly owned subsidiary, Canyon Community Bank, N.A. (“Tucson acquisition”)
(1)Ratios are annualized.
(2)With the exception of Net Interest Margin - FTE, represents a non-GAAP financial measure. See “Table 5. Non-GAAP Financial Measures” for a reconciliation of these measures.


CROSSFIRST BANKSHARES, INC.

    

Quarter-to-Date

Full Year

 

(Dollars in millions except per share data)

    

December 31, 2023

    

September 30, 2023

    

December 31, 2022

    

2023 .

    

2022 .

 

Operating revenue(1)

$

61.4

$

61.1

$

58.4

$

245.5

$

210.8

Net income

$

17.7

$

16.9

$

11.9

$

66.7

$

61.6

Adjusted net income(2)

$

19.6

$

18.6

$

17.9

$

72.8

$

68.6

Diluted earnings per common share

$

0.35

$

0.34

$

0.24

$

1.34

$

1.23

Adjusted diluted earnings per common share(2)

$

0.39

$

0.37

$

0.36

$

1.47

$

1.37

Return on average assets

 

0.97

%  

 

0.94

%  

 

0.77

%  

 

0.95

%  

 

1.07

%

Adjusted return on average assets(2)

 

1.07

%  

 

1.04

%  

 

1.15

%  

 

1.04

%  

 

1.19

%

Return on average common equity

 

10.71

%  

 

10.19

%  

 

8.04

%  

 

10.36

%  

 

9.97

%

Adjusted return on average common equity(2)

 

11.89

%  

 

11.26

%  

 

12.03

%  

 

11.32

%  

 

11.11

%

Net interest margin

 

3.19

%  

 

3.15

%  

 

3.56

%  

 

3.29

%  

 

3.44

%

Net interest margin - FTE(3)

 

3.23

%  

 

3.19

%  

 

3.61

%  

 

3.33

%  

 

3.50

%

Efficiency ratio

 

57.05

%  

 

59.49

%  

 

62.40

%  

 

59.84

%  

 

57.75

%

Adjusted efficiency ratio - FTE(2)(3)

 

51.87

%  

 

55.17

%  

 

55.01

%  

 

55.17

%  

 

54.40

%

(1)Net interest income plus non-interest income.
(2)Represents a non-GAAP financial measure. See “Table 5. Non-GAAP Financial Measures” for a reconciliation of these measures.
(3)Tax exempt income is calculated on a tax-equivalent basis. Tax-free municipal securities are exempt from federal income taxes. The incremental federal income tax rate used is 21.0%.

Income from Operations

Net income totaled $17.7 million, or $0.35 per diluted common share, for the fourth quarter of 2023, compared to $16.9 million, or $0.34 per diluted common share, during the third quarter of 2023 and $11.9 million, or $0.24 per diluted common share, during the fourth quarter of 2022. On a linked quarter basis, net income was higher due to an increase in net interest income as well as lower non-interest expense, partially offset by a decrease in non-interest income and higher provision expense. Compared to the same period in the prior year, the quarter’s results reflect higher net interest income and non-interest income in addition to lower provision expense and non-interest expense. Full year net income of $66.7 million was higher than 2022 net income of $61.6 million as higher net interest income and non-interest income more than offset higher provision expense and non-interest expense.

The fourth quarter included acquisition-related charges of $1.3 million and a bond repositioning loss of $1.1 million, resulting in adjusted net income of $19.6 million, or $0.39 per diluted common share on an adjusted basis, compared to adjusted net income of $18.6 million, or $0.37 per diluted common share on an adjusted basis, for the third quarter of 2023 and $17.9 million, or $0.36 per diluted common share on an adjusted basis, for the fourth quarter of 2022.  Full year adjusted net income of $72.8 million, or $1.47 per diluted common share on an adjusted basis, increased compared to $68.6 million, or $1.37 per diluted common share on an adjusted basis, for the prior year.

Net Interest Income

Fully tax equivalent net interest income totaled $57.6 million for the quarter, compared to $55.8 million for the third quarter of 2023, as the benefit from higher loan yields and higher average earning assets were partially offset by higher cost of funds. Net interest margin – FTE expanded 4 basis points to 3.23% as the yield on earning assets widened 16 basis points due to stronger loan yields as well as the impact of non-accrual loan interest reversals in the prior quarter which did not reoccur. The increase in the cost of interest-bearing liabilities moderated to 15 basis points due to continued pricing pressure on interest-bearing deposits, although at a slower pace. In addition, average earning assets increased $134 million compared to the prior quarter primarily due to higher average loan balances partially offset by lower average cash balances.


CROSSFIRST BANKSHARES, INC.

Compared to the fourth quarter of 2022, net interest income – FTE increased $2.8 million while net interest margin - FTE decreased 38 basis points. The higher income is due to 18% growth in average earning assets while the net interest margin – FTE decreased as higher loan yields were more than offset by a higher cost of funds due to the rising rate environment. The yield on earning assets increased 1.15% due to new loan production as well as repricing of variable rate loans. The cost of funds increased 1.68% over the same period due to pricing pressure on deposits, client migration into higher cost deposit products, as well as the reduction in average non-interest-bearing deposits compared to the prior year. The increase in average earning assets was entirely driven by higher average loan and investment balances, partially offset by lower average cash balances.

Full year net interest income – FTE was $227.7 million, an increase of $31.0 million, or 16%, compared to 2022. The net interest margin – FTE for the full year narrowed to 3.33% from 3.50% in the prior year as our cost of funds rose more than our increase in yields on earning assets coupled with a decrease in average non-interest bearing deposits. The yield on earning assets increased 1.92% due to new loan production as well as repricing of variable rate loans. The cost of funds increased 2.28% over the same period due to pricing pressure on deposits as well as client migration into higher cost deposit products compared to the prior year. Average interest earning assets increased $1.2 billion due to higher average loan and investment balances, partially offset by lower average cash balances.

Non-Interest Income

Non-interest income decreased $1.5 million compared to the third quarter of 2023 and increased slightly compared to the same quarter in 2022. The decrease compared to the linked quarter was primarily due to losses on the sale of available-for-sale (“AFS”) securities due to a bond portfolio repositioning as well as lower service charges. Compared to the same quarter in the prior year, increases in client service charges and fees, stronger credit card interchange income and higher gains on sales of loans were mostly offset by the AFS bond loss.

Full year non-interest income was up $3.4 million compared to 2022 driven by increases in service charges, fees, other client-related non-interest income and higher gains on the sale of loans. These increases were partially offset by decreased ATM and credit card interchange income and the previously mentioned AFS bond loss.

Non-Interest Expense

Non-interest expense decreased $1.3 million from the third quarter of 2023 and decreased $1.4 million from the fourth quarter of 2022. The fourth quarter of 2023 included $1.3 million of acquisition-related expenses with $0.5 million each in salaries and benefits and professional fees and $0.3 million in software and communication. The third quarter of 2023 included $1.3 million of acquisition-related expenses with $0.8 million included in professional fees, $0.3 million in salaries and employee benefits, $0.1 million in software and communication, and $0.1 million in other non-interest expense. The fourth quarter of 2022 included $3.6 million of acquisition-related expenses with $1.2 million included in professional fees, $1.0 million in salaries and benefits, $1.1 million in data processing and $0.2 million in other non-interest expense. Excluding these acquisition-related expenses, non-interest expense decreased $1.3 million compared to the third quarter of 2023 and increased $0.9 million compared to the fourth quarter of 2022. On an adjusted basis, salaries and employee benefits were lower than the prior quarter due to lower headcount and incentives. Compared to the fourth quarter of 2022 on an adjusted basis, salaries and employee benefits costs were lower due to decreased headcount and lower incentives in the current year. Occupancy costs increased due to new locations in the high-growth Dallas-Fort Worth market and from our acquisitions. Professional fees decreased due to reduced project expenses. Additionally, deposit insurance premiums increased due to growth in assets and a higher assessment rate. Core deposit intangible amortization expense also increased compared to the prior year as a result of the acquisitions.

Full year non-interest expense increased $25.2 million compared to 2022. Excluding acquisition-related costs and employee separation expenses, full year non-interest expense increased $24.4 million compared to the prior year. On an adjusted basis, salaries and benefits increased due to increased headcount from acquisition-related hirings as well as merit increases. Software and communication expense increased due to new digital banking platform implementation expense as well as increased headcount and client growth, primarily from our acquisitions. Additionally, occupancy costs, deposit insurance premiums and core deposit intangible amortization expense increased as previously mentioned.

The Company’s effective tax rate for the fourth quarter of 2023 was 20.8%, down from 21.3% in the third quarter of 2023 and 21.9% for the fourth quarter of 2022. The higher rate for the third quarter of 2023 was primarily related to discrete impacts of stock compensation activity and the higher rate for the fourth quarter of 2022 was primarily related to certain non-deductible acquisition costs.

Statement of Financial Condition Performance & Analysis

During the fourth quarter of 2023, total assets increased $0.2 billion, or 3%, compared to the end of the prior quarter and increased $0.8 billion, or 12%, compared to December 31, 2022. Total assets increased for both comparative periods primarily due to an


CROSSFIRST BANKSHARES, INC.

increase in loans. Compared to December 31, 2022, the loan increase included loans acquired from the Tucson acquisition. Deposits increased $0.2 billion compared to September 30, 2023, and increased $0.8 billion from December 31, 2022, including $0.2 billion in acquired deposits compared to the prior year end.

Loan Results

During the fourth quarter of 2023, loans increased $182 million, or 3%, compared to September 30, 2023. Loans increased $755 million, or 14%, compared to December 31, 2022, including $106 million, net, from the Tucson acquisition. The loan increase compared to September 30, 2023 was primarily due to growth in the commercial and industrial and commercial real estate – non-owner-occupied portfolios. Compared to December 31, 2022, the loan increase was primarily due to growth in the commercial and industrial, commercial real estate – owner-occupied and commercial real estate – non-owner-occupied portfolios. The increases in the commercial real estate portfolios were primarily due to funding of prior commitments during 2023.

QoQ

QoQ

YoY

YoY

% of

Growth

 Growth

Growth

 Growth

    

12/31/2023

    

9/30/2023

    

6/30/2023

    

3/31/2023

    

12/31/2022

    

 Total

    

  ($)

    

 (%)

    

  ($)

    

 (%)

 

(Dollars in millions)

 

Period-end loans (gross)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Commercial and industrial

$

2,160

$

2,056

$

2,058

$

2,034

$

1,975

 

35

%  

$

104

 

5

%  

$

185

 

9

%

Energy

 

214

 

214

 

233

 

194

 

173

 

3

 

 

 

41

 

24

Commercial real estate - owner-occupied

 

567

 

584

 

543

 

478

 

437

 

9

 

(17)

 

(3)

 

130

 

30

Commercial real estate - non-owner-occupied

 

2,686

 

2,593

 

2,480

 

2,472

 

2,315

 

44

 

93

 

4

 

371

 

16

Residential real estate

 

464

 

456

 

440

 

440

 

439

 

8

 

8

 

2

 

25

 

6

Consumer

 

37

 

43

 

43

 

30

 

34

 

1

 

(6)

 

(14)

 

3

 

9

Total

$

6,128

$

5,946

$

5,797

$

5,648

$

5,373

 

100

%  

$

182

 

3

%  

$

755

 

14

%

Deposit & Other Borrowing Results

During the fourth quarter of 2023, deposits increased 3%, compared to September 30, 2023, and increased 15%, compared to December 31, 2022. The deposit increase compared to September 30, 2023 was due to increases in savings and money market deposits and time deposits, partially offset by decreases in non-interest-bearing deposits. The total deposit increase compared to December 31, 2022 was due to increases in transaction deposits, savings and money market deposits and time deposits, including $165 million related to the Tucson acquisition, partially offset by decreases in non-interest-bearing deposits.

QoQ

QoQ

YoY

YoY

Growth

Growth

Growth

Growth

    

12/31/2023

    

9/30/2023

    

6/30/2023

    

3/31/2023

    

12/31/2022

    

($)

    

(%)

    

($)

    

(%)

 

(Dollars in millions)

 

Period-end deposits

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Non-interest-bearing deposits

$

990

$

1,029

$

928

$

970

$

1,400

$

(39)

 

(4)

%  

$

(410)

 

(29)

%

Transaction deposits

 

800

 

802

 

604

 

665

 

544

 

(2)

 

 

256

 

47

Savings and money market deposits

 

2,870

 

2,757

 

2,730

 

2,826

 

2,761

 

113

 

4

 

109

 

4

Time deposits

 

1,831

 

1,744

 

1,838

 

1,376

 

946

 

87

 

5

 

885

 

94

Total

$

6,491

$

6,332

$

6,100

$

5,837

$

5,651

$

159

 

3

%  

$

840

 

15

%

FHLB and Other borrowings ended the quarter at $86.8 million compared to $106.6 million at September 30, 2023 and $253.6 million at December 31, 2022. Borrowings were reduced due to client deposit growth across both comparative periods.


CROSSFIRST BANKSHARES, INC.

Asset Quality and Provision for Credit Losses

The Company recorded $4.1 million of provision expense, compared to $3.3 million in the prior quarter and $6.7 million in the prior year fourth quarter. The current quarter’s provision expense was primarily driven by net charge-offs and loan growth.

Non-performing assets decreased $11.3 million to $24.8 million, or 0.34% of total assets, at December 31, 2023. The decrease was due to a charge-off of a non-accrual loan and one credit that was 90+ days past due and still accruing at the end of the third quarter which was brought current during the fourth quarter. Annualized net charge-offs were 0.12% for the quarter compared to 0.09% in the prior quarter and (0.02%) in the prior year fourth quarter. Full year net charge-offs were 0.09%.

The allowance for credit losses was $73.5 million as of December 31, 2023 and was consistent with the prior quarter at 1.20% of outstanding loans. The combined allowance for credit losses and accrual for off-balance sheet credit risk from unfunded commitments (“RUC”) was $79.9 million or 1.30% of outstanding loans.

The following table provides information regarding asset quality.

Asset quality (Dollars in millions)

    

12/31/2023

    

9/30/2023

    

6/30/2023

    

3/31/2023

    

12/31/2022

Non-accrual loans

$

18.5

$

20.4

$

12.9

$

9.5

$

11.3

Other real estate owned

 

 

 

 

0.9

 

1.1

Loans 90+ days past due and still accruing

 

6.3

 

15.7

 

0.4

 

0.8

 

0.8

Non-performing assets

$

24.8

$

36.1

$

13.3

$

11.2

$

13.2

Loans 30 - 89 days past due

 

2.0

 

29.5

 

13.3

 

5.1

 

19.6

Net charge-offs (recoveries)

 

1.9

 

1.3

 

0.6

 

1.6

 

(0.3)

Asset quality metrics (%)

    

12/31/2023

    

9/30/2023

    

6/30/2023

    

3/31/2023

    

12/31/2022

 

Nonperforming assets to total assets

 

0.34

%

0.50

%

0.19

%

0.16

%

0.20

%

Allowance for credit losses to total loans

 

1.20

 

1.20

 

1.17

 

1.15

 

1.15

Allowance for credit losses + RUC to total loans(2)

 

1.30

 

1.31

 

1.30

 

1.30

 

1.31

Allowance for credit losses to non-performing loans

 

296

 

198

 

508

 

629

 

514

Net charge-offs (recoveries) to average loans(1)

 

0.12

 

0.09

 

0.04

 

0.12

 

(0.02)

Provision to average loans(1)

 

0.27

 

0.23

 

0.18

 

0.32

 

0.53

Classified Loans / (Total Capital + ACL)

 

14.9

 

14.2

 

9.7

 

9.4

 

10.1

Classified Loans / (Total Capital + ACL + RUC)(2)

 

14.8

 

14.0

 

9.6

 

9.3

 

10.0

(1)Interim periods annualized.
(2)Includes the accrual for off-balance sheet credit risk from unfunded commitments

Capital Position

At December 31, 2023, stockholders’ equity totaled $708 million, or $14.35 of book value per common share, compared to $609 million, or $12.56 of book value per common share, at December 31, 2022.

Tangible book value per common share(1) was $13.56 at December 31, 2023, an increase of $1.60, or 13%, from December 31, 2022. The increase was primarily due to net income and the change in other comprehensive loss partially offset by the Tucson acquisition. The ratio of common equity Tier 1 capital to risk-weighted assets was approximately 10.0%, and the ratio of total capital to risk-weighted assets was approximately 11.2% at December 31, 2023.

(1)Represents a non-GAAP financial measure. See “Table 5. Non-GAAP Financial Measures” for a reconciliation of this measure.


CROSSFIRST BANKSHARES, INC.

Conference Call and Webcast

Management will host a conference call to review fourth quarter and full year financial results on Tuesday, January 23, 2024, at 10 a.m. CT / 11 a.m. ET. The conference call and webcast may also include discussion of Company developments, forward-looking statements and other material information about business and financial matters. To access the event by telephone, please dial (844) 481-2831 at least fifteen minutes prior to the start of the call and request access to the CrossFirst Bankshares call. International callers should dial +1 (412) 317-1851 and request access as directed above. The call will also be broadcast live over the internet and can be accessed via the following link: https://edge.media-server.com/mmc/p/6qo9vh8p. Please visit the site at least 15 minutes prior to the call to allow time for registration. For those unable to join the presentation, a replay of the call will be available two hours after the conclusion of the live call. To access the replay, dial (877) 344-7529 and enter the replay access code 3679931. International callers should dial +1 (412) 317-0088 and enter the same access code. A replay of the webcast will also be available for 90 days on the Company’s website https://investors.crossfirstbankshares.com/.

Cautionary Notice about Forward-Looking Statements

The financial results in this press release reflect preliminary, unaudited results, which are not final until the Company’s Annual Report on Form 10-K is filed. This earnings release contains forward-looking statements regarding, among other things, our business plans; expansion and growth opportunities; post-closing plans, objectives, expectations and intentions with respect to the Tucson acquisition; expense control initiatives; anticipated expenses, cash requirements and sources of liquidity; capital allocation strategies and plans; and future financial performance. These statements are often, but not always, made through the use of words or phrases such as “growth,” “plan,” “guidance,” “believe,” “belief,” “future,” “opportunities,” “anticipate,” “expectation,” “expect,” “will,” “goal,” “focus,” “intend,” “positioned” and similar words or phrases of a future or forward-looking nature. The inclusion of forward-looking information herein should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs, certain assumptions made by management, and financial trends that may affect our financial condition, results of operations, business strategy or financial needs, many of which, by their nature, are inherently uncertain and beyond our control. Our actual results could differ materially from those anticipated in such forward-looking statements.

Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors, including , without limitation, the following: uncertain or unfavorable business or economic conditions and any regulatory responses thereto, including uncertainty and volatility in the financial markets, possible slowing or recessionary economic conditions and continuing or increasing inflation; geographic concentration of our markets; changes in market interest rates that affect pricing of our products and our net interest income; our ability to effectively execute our growth strategy and manage our growth, including identifying, consummating and integrating suitable mergers and acquisitions, entering new lines of business or offering new or enhanced services or products; fluctuations in the fair value of our investments; our ability to successfully manage our credit risk, particularly in our commercial real estate, energy and commercial-based loan portfolios, and the sufficiency of our allowance for credit losses; declines in the values of the real estate and other collateral securing loans in our portfolio; an increase in non-performing assets; borrower and depositor concentration risks; risks associated with originating Small Business Administration loans; our dependence on our management team, including our ability to attract, hire and retain key employees; our ability to raise and maintain sufficient liquidity and capital; competition from banks, credit unions, FinTech companies and other financial services providers; the effectiveness of our risk management framework; accounting estimates; our ability to maintain effective internal control over financial reporting; our ability to keep pace with technological changes; system failures, service denials, cyber incidents or other failures, disruptions or security breaches; employee error, employee or client misconduct, fraud committed against the Company or our clients, or incomplete or inaccurate information about clients and counterparties; disruptions to our business caused by our third-party service providers; our ability to maintain our reputation; environmental liability; costs and effects of litigation; risk exposure from transactions with financial counterparties; severe weather, natural disasters, pandemics, acts of war or terrorism, climate change and responses thereto, or other external events; compliance with (and changes in) laws, rules, regulations, interpretations or policies relating to financial institutions, including stringent capital requirements, higher FDIC insurance premiums and assessments, consumer protection laws and privacy laws; volatility in our stock price and other risks associated with our common stock; changes in our dividend or share repurchase policies and practices or other external events. These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. These forward-looking statements are made as of the date hereof, and we disclaim any obligation to update any forward-looking statement or to publicly announce the results of any revisions to any of the forward-looking statements included herein, except as required by law.


CROSSFIRST BANKSHARES, INC.

About CrossFirst Bankshares, Inc.

CrossFirst Bankshares, Inc. (Nasdaq: CFB) is a Kansas corporation and a registered bank holding company for its wholly owned subsidiary, CrossFirst Bank, a full-service financial institution that offers products and services to businesses, professionals, individuals, and families. CrossFirst Bank, headquartered in Leawood, Kansas, has locations in Kansas, Missouri, Oklahoma, Texas, Arizona, Colorado, and New Mexico.

INVESTOR CONTACT

Mike Daley, Chief Accounting Officer and Head of Investor Relations

mike.daley@crossfirstbank.com

(913) 754-9707

https://investors.crossfirstbankshares.com


CROSSFIRST BANKSHARES, INC.

TABLE 1. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)

    

December 31, 2023

    

September 30, 2023

    

December 31, 2022

(Dollars in thousands)

Assets

Cash and cash equivalents

$

255,229

$

233,191

$

300,138

Available-for-sale securities - taxable

 

413,217

 

345,708

 

198,808

Available-for-sale securities - tax-exempt

 

353,436

 

404,779

 

488,093

Loans, net of unearned fees

 

6,127,690

 

5,945,753

 

5,372,729

Allowance for credit losses on loans

 

73,462

 

71,556

 

61,775

Loans, net of the allowance for credit losses on loans

 

6,054,228

 

5,874,197

 

5,310,954

Premises and equipment, net

 

70,869

 

70,245

 

65,984

Restricted equity securities

 

3,950

 

4,396

 

12,536

Interest receivable

 

37,294

 

35,814

 

29,507

Foreclosed assets held for sale

 

 

 

1,130

Goodwill and other intangible assets, net

 

31,335

 

32,293

 

29,081

Bank-owned life insurance

 

70,810

 

70,367

 

69,101

Other

 

90,312

 

108,489

 

95,754

Total assets

$

7,380,680

$

7,179,479

$

6,601,086

Liabilities and stockholders’ equity

Deposits

Non-interest-bearing

$

990,458

$

1,028,974

$

1,400,260

Savings, NOW and money market

 

3,669,726

 

3,558,994

 

3,305,481

Time

 

1,831,092

 

1,743,653

 

945,567

Total deposits

 

6,491,276

 

6,331,621

 

5,651,308

Federal Home Loan Bank advances

 

77,889

 

88,531

 

218,111

Other borrowings

 

8,950

 

18,059

 

35,457

Interest payable and other liabilities

 

94,422

 

98,217

 

87,611

Total liabilities

 

6,672,537

 

6,536,428

 

5,992,487

Stockholders’ equity

Preferred Stock, $0.01 par value: Authorized - 15,000 shares, issued - 7,750 at December 31, 2023 and September 30, 2023 and no shares at December 31, 2022

 

 

 

Common Stock, $0.01 par value: Authorized - 200,000,000 shares, issued - 53,326,641, 53,285,789 and 53,036,613 shares at December 31, 2023, September 30, 2023 and December 31, 2022, respectively

 

533

 

533

 

530

Treasury stock, at cost: 3,990,753 shares held at December 31, 2023 and September 30, 2023 and 4,588,398 shares held at December 31, 2022

 

(58,251)

 

(58,195)

 

(64,127)

Additional paid-in capital

 

543,556

 

542,191

 

530,658

Retained earnings

 

272,351

 

254,855

 

206,095

Accumulated other comprehensive loss

 

(50,046)

 

(96,333)

 

(64,557)

Total stockholders’ equity

 

708,143

 

643,051

 

608,599

Total liabilities and stockholders’ equity

$

7,380,680

$

7,179,479

$

6,601,086


CROSSFIRST BANKSHARES, INC.

TABLE 2. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended

Year Ended

December 31, 

September 30,

December 31, 

December 31, 

December 31, 

    

2023

    

2023

    

2022

    

2023

    

2022

(Dollars in thousands except per share data)

Interest Income

Loans, including fees

$

108,679

$

103,631

$

74,872

$

400,910

$

224,138

Available-for-sale securities - taxable

 

3,958

 

3,089

 

1,327

 

11,518

 

4,577

Available-for-sale securities - tax-exempt

 

3,116

 

3,365

 

3,896

 

13,846

 

15,338

Deposits with financial institutions

 

1,950

 

2,444

 

2,037

 

8,017

 

3,751

Dividends on bank stocks

 

107

 

127

 

231

 

860

 

709

Total interest income

 

117,810

 

112,656

 

82,363

 

435,151

 

248,513

Interest Expense

Deposits

 

60,127

 

56,297

 

26,830

 

201,812

 

49,982

Fed funds purchased and repurchase agreements

 

3

 

5

 

13

 

54

 

96

Federal Home Loan Bank Advances

 

626

 

1,003

 

1,457

 

7,754

 

4,759

Other borrowings

 

100

 

224

 

48

 

690

 

142

Total interest expense

 

60,856

 

57,529

 

28,348

 

210,310

 

54,979

Net Interest Income

 

56,954

 

55,127

 

54,015

 

224,841

 

193,534

Provision for Credit Losses

 

4,099

 

3,329

 

6,657

 

14,489

 

11,501

Net Interest Income after Provision for Credit Losses

 

52,855

 

51,798

 

47,358

 

210,352

 

182,033

Non-Interest Income

Service charges and fees on customer accounts

 

1,998

 

2,249

 

1,708

 

8,186

 

6,228

ATM and credit card interchange income

 

1,556

 

1,436

 

1,010

 

5,469

 

6,523

Gain on sale of loans

 

553

 

739

 

47

 

2,684

 

47

Income from bank-owned life insurance

 

443

 

437

 

402

 

1,709

 

1,602

Swap fees and credit valuation adjustments, net

 

134

 

57

 

65

 

365

 

188

Other non-interest income

 

(201)

 

1,063

 

1,127

 

2,251

 

2,693

Total non-interest income

 

4,483

 

5,981

 

4,359

 

20,664

 

17,281

Non-Interest Expense

Salaries and employee benefits

 

20,478

 

22,017

 

22,000

 

89,178

 

75,288

Occupancy

 

3,144

 

3,183

 

2,812

 

12,355

 

10,663

Professional fees

 

1,548

 

1,945

 

2,822

 

7,081

 

5,275

Deposit insurance premiums

 

1,902

 

1,947

 

999

 

7,261

 

3,354

Data processing

 

1,052

 

904

 

1,901

 

4,255

 

4,750

Advertising

 

892

 

593

 

954

 

2,886

 

3,201

Software and communication

 

1,819

 

1,898

 

1,404

 

7,023

 

5,093

Foreclosed assets, net

 

 

 

13

 

128

 

(17)

Other non-interest expense

 

3,257

 

2,945

 

3,227

 

13,237

 

13,785

Core deposit intangible amortization

 

957

 

922

 

291

 

3,503

 

350

Total non-interest expense

 

35,049

 

36,354

 

36,423

 

146,907

 

121,742

Net Income Before Taxes

 

22,289

 

21,425

 

15,294

 

84,109

 

77,572

Income tax expense

 

4,638

 

4,562

 

3,348

 

17,440

 

15,973

Net Income

$

17,651

$

16,863

$

11,946

$

66,669

$

61,599

Basic Earnings Per Common Share

$

0.35

$

0.34

$

0.25

$

1.35

$

1.24

Diluted Earnings Per Common Share

$

0.35

$

0.34

$

0.24

$

1.34

$

1.23


CROSSFIRST BANKSHARES, INC.

TABLE 3. YEAR-TO-DATE ANALYSIS OF CHANGES IN NET INTEREST INCOME – FTE (UNAUDITED)

Year Ended

 

December 31, 

 

2023

2022

 

Interest

Average

Interest

Average

 

Average

Income /

Yield /

Average

Income /

Yield /

 

    

Balance

    

Expense

    

Rate(3)

    

Balance

    

Expense

    

Rate(3)

 

(Dollars in thousands)

 

Interest-earning assets:

 

  

Securities - taxable

$

343,451

$

12,378

 

3.60

%  

$

220,760

$

5,286

 

2.39

%

Securities - tax-exempt - FTE(1)

 

500,781

 

16,754

 

3.35

 

551,734

 

18,559

 

3.36

Federal funds sold

 

562

13

 

2.31

 

3,139

 

49

 

1.56

Interest-bearing deposits in other banks

 

175,353

 

8,004

 

4.56

 

239,240

 

3,702

 

1.55

Gross loans, net of unearned income(2)

 

5,821,027

 

400,910

 

6.89

 

4,603,697

 

224,138

 

4.87

Total interest-earning assets - FTE(1)

 

6,841,174

$

438,059

 

6.40

%  

 

5,618,570

$

251,734

 

4.48

%

Allowance for loan losses

 

(67,687)

 

(57,388)

Other non-interest-earning assets

 

225,408

 

198,849

Total assets

$

6,998,895

$

5,760,031

Interest-bearing liabilities

Transaction deposits

$

661,700

$

21,137

 

3.19

%  

$

538,604

$

4,951

 

0.92

%

Savings and money market deposits

 

2,798,937

 

111,339

 

3.98

 

2,475,891

 

33,599

 

1.36

Time deposits

 

1,572,352

 

69,336

 

4.41

 

688,095

 

11,432

 

1.66

Total interest-bearing deposits

 

5,032,989

 

201,812

 

4.01

 

3,702,590

 

49,982

 

1.35

FHLB and short-term borrowings

 

210,838

 

8,258

 

3.92

 

232,018

 

4,855

 

2.09

Trust preferred securities, net of fair value adjustments

 

1,084

 

240

 

22.14

 

1,072

 

142

 

13.25

Non-interest-bearing deposits

 

1,005,722

 

 

 

1,146,594

 

 

Cost of funds

 

6,250,633

$

210,310

 

3.36

%  

 

5,082,274

$

54,979

 

1.08

%

Other liabilities

 

102,735

 

60,175

Stockholders’ equity

 

645,527

 

617,582

Total liabilities and stockholders’ equity

$

6,998,895

$

5,760,031

Net interest income - FTE(1)

$

227,749

$

196,755

Net interest spread - FTE(1)

 

3.04

%

 

3.40

%

Net interest margin - FTE(1)

 

3.33

%

 

3.50

%

(1)Tax exempt income is calculated on a tax-equivalent basis. Tax-free municipal securities are exempt from federal income taxes. The incremental income tax rate used is 21.0%.
(2)Average gross loan balances include non-accrual loans.
(3)Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this release may not produce the same amounts.


CROSSFIRST BANKSHARES, INC.

TABLE 4. QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME – FTE (UNAUDITED)

December 31, 2023

September 30, 2023

December 31, 2022

 

Interest

Average

Interest

Average

Interest

Average

 

Average

Income /

Yield /

Average

Income /

Yield /

Average

Income /

Yield /

 

    

Balance

    

Expense

    

Rate(3)

    

Balance

    

Expense

    

Rate(3)

    

Balance

    

Expense

    

Rate(3)

 

(Dollars in thousands)

 

Interest-earning assets:

Securities - taxable

$

409,690

$

4,065

 

3.97

%  

$

357,260

$

3,216

 

3.60

%  

$

227,701

$

1,558

 

2.74

%

Securities - tax-exempt - FTE(1)

 

460,568

 

3,770

 

3.27

 

489,320

 

4,072

 

3.33

 

558,393

 

4,714

 

3.38

Federal funds sold

 

179

 

2

 

4.43

 

332

 

5

 

5.97

 

12,453

 

50

 

1.59

Interest-bearing deposits in other banks

 

162,603

 

1,948

 

4.75

 

198,068

 

2,439

 

4.89

 

218,549

 

1,987

 

3.61

Gross loans, net of unearned income(2)

 

6,053,689

 

108,679

 

7.12

 

5,907,730

 

103,631

 

6.96

 

5,009,667

 

74,872

 

5.93

Total interest-earning assets - FTE(1)

 

7,086,729

$

118,464

 

6.63

%  

 

6,952,710

$

113,363

 

6.47

%  

 

6,026,763

$

83,181

 

5.48

%

Allowance for loan losses

 

(71,907)

 

(69,415)

 

(57,909)

Other non-interest-earning assets

 

216,789

 

230,933

 

190,929

Total assets

$

7,231,611

$

7,114,228

$

6,159,783

Interest-bearing liabilities

Transaction deposits

$

812,536

$

7,571

 

3.70

%  

$

689,973

$

5,727

 

3.29

%  

$

528,725

$

2,772

 

2.08

%

Savings and money market deposits

 

2,831,643

 

31,188

 

4.37

 

2,775,549

 

29,655

 

4.24

 

2,742,026

 

18,359

 

2.66

Time deposits

 

1,771,236

 

21,368

 

4.79

 

1,795,798

 

20,915

 

4.62

 

868,029

 

5,699

 

2.60

Total interest-bearing deposits

 

5,415,415

 

60,127

 

4.40

 

5,261,320

 

56,297

 

4.25

 

4,138,780

 

26,830

 

2.57

FHLB and short-term borrowings

 

92,270

 

665

 

2.86

 

131,420

 

1,169

 

3.53

 

202,705

 

1,470

 

2.88

Trust preferred securities, net of fair value adjustments

 

1,106

 

64

 

22.96

 

1,091

 

63

 

22.91

 

1,213

 

48

 

15.70

Non-interest-bearing deposits

 

956,027

 

 

 

954,005

 

 

 

1,141,977

 

 

Cost of funds

 

6,464,818

$

60,856

 

3.73

%  

 

6,347,836

$

57,529

 

3.60

%  

 

5,484,675

$

28,348

 

2.05

%

Other liabilities

 

111,161

 

108,148

 

85,521

Stockholders’ equity

 

655,632

 

658,244

 

589,587

Total liabilities and stockholders’ equity

$

7,231,611

$

7,114,228

$

6,159,783

Net interest income - FTE(1)

$

57,608

$

55,834

$

54,833

Net interest spread - FTE(1)

 

2.90

%

 

2.87

%

 

3.43

%

Net interest margin - FTE(1)

 

3.23

%

 

3.19

%

 

3.61

%

(1)Tax exempt income is calculated on a tax-equivalent basis. Tax-free municipal securities are exempt from federal income taxes. The incremental income tax rate used is 21.0%.
(2)Average loan balances include non-accrual loans.
(3)Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this release may not produce the same amounts.


CROSSFIRST BANKSHARES, INC.

TABLE 5. NON-GAAP FINANCIAL MEASURES

Non-GAAP Financial Measures

In addition to disclosing financial measures determined in accordance with U.S. generally accepted accounting principles (GAAP), the Company discloses non-GAAP financial measures in this release including “tangible common stockholders’ equity,” “tangible book value per common share,” “adjusted efficiency ratio – fully tax equivalent (FTE),” “adjusted net income,” “adjusted diluted earnings per common share,” “adjusted return on average assets (ROAA),” and “adjusted return on average common equity (ROCE).” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or gains that we believe are not indicative of our primary business operating results. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures follows.

Quarter Ended

Year Ended

    

12/31/2023

    

9/30/2023

    

6/30/2023

    

3/31/2023

    

12/31/2022

    

12/31/2023

    

12/31/2022

(Dollars in thousands, except per share data)

Adjusted net income:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Net income

$

17,651

$

16,863

$

16,047

$

16,108

$

11,946

$

66,669

$

61,599

Add: Acquisition costs

 

1,300

 

1,328

 

338

 

1,477

 

3,570

 

4,443

 

3,890

Add: Acquisition - Day 1 CECL provision