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 23, 2020
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) 312-6822
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 23, 2020, CrossFirst Bankshares, Inc. announced its results for the fourth quarter of 2019 and year ended December 31, 2019. The press release is furnished as Exhibit 99.1 and its investor presentation is furnished as Exhibit 99.2.
The information in Item 2.02 of this report (including the exhibits hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits |
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 23, 2020 | CROSSFIRST BANKSHARES, INC. | |||
By: | /s/ David O'Toole | ||||
David O'Toole Chief Financial Officer | |||||
Exhibit 99.1
FOR IMMEDIATE RELEASE | CROSSFIRST BANKSHARES, INC. CONTACT: | |
January 23, 2020 | Matt Needham, Director of Investor Relations | |
(913) 312-6822
https://investors.crossfirstbankshares.com
CrossFirst Bankshares, Inc. Reports Record Fourth Quarter & Full-Year 2019 Operating Revenue and Net Income
LEAWOOD, KS. January 23, 2020 (GLOBE NEWSWIRE) -- CrossFirst Bankshares, Inc. (Nasdaq: CFB), the bank holding company for CrossFirst Bank, reported its results for the fourth quarter and full-year of 2019, including record net income of $11.4 million, or $0.22 per diluted share, and full-year 2019 net income of $40.6 million, or $0.83 per diluted share. CrossFirst continued to deliver growth in operating revenue and earnings while managing through a declining interest rate environment.
"We are pleased to announce our 23rd consecutive quarter of record operating revenue performance," said CrossFirst CEO and President George F. Jones, Jr. “Despite the headwinds of a declining rate environment, we were able to deliver quarterly operating revenue growth through strong balance sheet growth and by maintaining our net interest margin. Doubling our net income year over year is a tremendous success for our Company. We have built a great organization and I am proud of what we have accomplished during the year.”
2019 Fourth Quarter and Full-Year Highlights:
• | Approaching $5 billion of assets with 30% operating revenue growth compared to full-year 2018 |
• | Record quarterly net income of $11.4 million, an increase of 10% from the fourth quarter of 2018 |
• | Record full-year net income of $40.6 million, a year-over-year increase of 107% |
• | Diluted EPS of $0.83 for full-year 2019, a year-over-year increase of 77% |
• | Achieved efficiency ratios of 55.6% for the quarter and 58.4% for the year |
• | Grew loans by $223 million from the previous quarter and $793 million or 26% since year-end December 31, 2018 |
• | Grew deposits by $266 million from the previous quarter and $716 million or 22% since year-end December 31, 2018 |
• | Book value per share of $11.80 at December 31, 2019 compared to $10.21 at December 31, 2018 |
Quarter-to-Date | Year-to-Date | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2018 | 2019 | 2018 | 2019 | |||||||||||||
(Dollars in millions except per share data) | ||||||||||||||||
Operating revenue(1) | $ | 33.5 | $ | 39.4 | $ | 116.5 | $ | 150.2 | ||||||||
Net income | $ | 10.3 | $ | 11.4 | $ | 19.6 | $ | 40.6 | ||||||||
Diluted EPS | $ | 0.22 | $ | 0.22 | $ | 0.47 | $ | 0.83 | ||||||||
Return on average assets | 1.06 | % | 0.94 | % | 0.56 | % | 0.90 | % | ||||||||
Non-GAAP core operating return on average assets(2) | 0.67 | % | 0.94 | % | 0.57 | % | 0.88 | % | ||||||||
Return on average common equity | 9.03 | % | 7.45 | % | 5.34 | % | 7.67 | % | ||||||||
Non-GAAP return on average tangible common equity(2) | 9.20 | % | 7.55 | % | 5.47 | % | 7.79 | % | ||||||||
Net interest margin | 3.44 | % | 3.17 | % | 3.29 | % | 3.26 | % | ||||||||
Net interest margin, fully tax-equivalent(3) | 3.51 | % | 3.23 | % | 3.39 | % | 3.31 | % | ||||||||
Efficiency ratio | 60.2 | % | 55.6 | % | 73.6 | % | 58.4 | % | ||||||||
Non-GAAP core operating efficiency ratio, fully tax-equivalent(2)(3) | 61.4 | % | 54.7 | % | 67.7 | % | 57.2 | % | ||||||||
(1) Net interest income plus non-interest income. | ||||||||||||||||
(2) Represents a non-GAAP measure. See "Table 6. Non-GAAP Financial Measures" for a reconciliation of this measure. | ||||||||||||||||
(3) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental federal tax rate used is 21.0%. | ||||||||||||||||
1
CROSSFIRST BANKSHARES, INC.
Income from Operations
Net Interest Income
The Company produced interest income of $55.2 million for the fourth quarter of 2019, an increase of 17% from the fourth quarter of 2018 and remained flat from the previous quarter due to the declining interest rate environment. Full-year interest income is up 38% year-over- year primarily as a result of continued strong growth in average earning assets. The tax-equivalent yield on earning assets declined from 5.00% to 4.76% during the fourth quarter of 2019 primarily due to the movement of variable rate assets indexed to market rates.
Interest expense for the fourth quarter of 2019 was $18.0 million, or 22% higher than the fourth quarter of 2018 and 9% lower than the third quarter of 2019. Average interest-bearing deposits in the fourth quarter of 2019 totaled $3.3 billion, an increase of $806 million or 33% from the same quarter in 2018. Compared to the third quarter of 2019, interest-bearing deposit mix changes during the quarter were a result of responding to declining rates to lower margin exposure, therefore most of the new deposit growth came from variable rate accounts. Non-deposit funding costs decreased to 1.86% from 1.95% in the third quarter of 2019 while overall cost of funds for the quarter was 1.71%, compared to 1.94% for the third quarter of 2019.
Tax-equivalent net interest margin declined to 3.23% for the quarter compared to 3.51% for the same quarter in 2018, reflecting the impact of the declining rate environment. For full-year 2019, the Company reported a tax equivalent net interest margin of 3.31%, slightly lower than full-year 2018 results. The tax-equivalent adjustment, which accounts for income taxes saved on the interest earned on nontaxable securities and loans, was $0.7 million for the fourth quarter of both 2019 and 2018, and $0.6 million for the third quarter of 2019. Net interest income totaled $37.2 million for the fourth quarter of 2019 or 4% greater than the third quarter of 2019. Full-year 2019 net interest income totaled $141.4 million or 28% higher than the same period of 2018 reflecting the Company's strong balance sheet growth and maintenance of net interest margin.
Non-Interest Income
Non-interest income increased $1.0 million in the fourth quarter of 2019 or 83% compared to the same quarter of 2018 and decreased $1.0 million or 32% lower compared to the third quarter of 2019. While the Company continues to increase fee income commensurate with its growth, during the quarter the Company recorded $0.5 million of bond gains as well as more income from the back to back swap program than in the fourth quarter in 2018. The reduction in non-interest income from the prior quarter was due to increased activity for swap fees and a one-time $0.8 million gain related to a change in derivative valuation in the third quarter of 2019. For full-year 2019, non-interest income increased $2.6 million compared to full-year 2018 primarily due to the increased swap activity, the revaluation of the swap program, and the additional activity derived from additional balance sheet and customer growth.
Non-Interest Expense
Non-interest expense for the fourth quarter of 2019 increased $1.7 million, or 9%, compared to the fourth quarter of 2018 and increased $0.7 million, or 3%, from the third quarter of 2019. Compared to the fourth quarter of 2018, salary and employment-related expenses increased $1.4 million for additional employee headcount required to support growth and data processing costs were higher from the Company's increased volumes of activity from balance sheet growth and a larger customer base. As compared to the third quarter of 2019, salary and employment-related expenses decreased $0.4 million as a result of continuing to manage resource allocation and hiring, FDIC insurance expense increased as a result of a one-time small bank credit in the third quarter and professional fees increased $0.6 million. For full-year 2019, non-interest expense increased 2% or $1.9 million compared to full-year 2018 primarily due to salary and employment expenses to support growth and higher data processing costs.
CrossFirst’s effective tax rate for the twelve months ended December 31, 2019 was 16.6% as compared to (13.9)% for the twelve months ended December 31, 2018. The year-over-year change was due to higher earnings, state tax credits related to our new headquarters, a reduction in tax-exempt income due to average yields on tax exempt securities decreasing, and permanent tax benefits from stock-based compensation awards vested and exercised in 2018 as compared to 2019. The effective tax rate for the fourth quarter of 2019 was 19.4% compared to (16.8)% for the fourth quarter of 2018. For both of the comparable periods, the Company continued to benefit from the tax-exempt municipal bond portfolio creating an effective tax rate lower than the statutory tax rates.
Balance Sheet Performance & Analysis
During the fourth quarter of 2019, total assets increased by $292 million or 6% compared to September 30, 2019 with both strong loan and deposit growth. Asset growth for CrossFirst was $836 million or 20% year-over-year. During the fourth quarter of 2019, total available for sale investment securities increased $9 million to $742 million, while the overall average for the quarter was $745 million. Tax-exempt municipal securities on average increased $35 million and mortgage-backed securities decreased $19 million. Overall, the Company increased the size of the bond portfolio during 2019 by $78 million, or 12% compared to year-end 2018. The increase in investment securities was part of management's strategy to manage liquidity and optimize income.
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CROSSFIRST BANKSHARES, INC.
Loan Growth Results
The Company continued to maintain a diversified loan portfolio while experiencing strong loan growth of 6% for the fourth quarter of 2019 and 26% since December 31, 2018. Loan yields declined 32 basis points in the overall portfolio commensurate with the adjustable rate loan movements in LIBOR and Prime during the quarter. The Company experienced $174 million in payoffs for the quarter, but funded $255 million in loans to new borrowers to replace and grow the overall portfolio.
(Dollars in millions) | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | % of Total | QoQ Growth ($) | QoQ Growth (%)(1) | YoY Growth ($) | YoY Growth (%)(1) | ||||||||||||||||||||||||||
Average loans (gross) | ||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,021 | $ | 1,145 | $ | 1,224 | $ | 1,284 | $ | 1,315 | 35 | % | $ | 31 | 2 | % | $ | 294 | 29 | % | ||||||||||||||||
Energy | 349 | 367 | 383 | 389 | 400 | 11 | 11 | 3 | 51 | 15 | ||||||||||||||||||||||||||
Commercial real estate | 810 | 866 | 946 | 974 | 1,007 | 27 | 33 | 3 | 197 | 24 | ||||||||||||||||||||||||||
Construction and land development | 449 | 444 | 457 | 487 | 599 | 16 | 112 | 23 | 150 | 33 | ||||||||||||||||||||||||||
Residential real estate | 240 | 310 | 342 | 362 | 384 | 10 | 22 | 6 | 144 | 60 | ||||||||||||||||||||||||||
Consumer & Equity Lines | 42 | 44 | 46 | 45 | 45 | 1 | — | (1 | ) | 3 | 5 | |||||||||||||||||||||||||
Total | $ | 2,911 | $ | 3,176 | $ | 3,398 | $ | 3,541 | $ | 3,750 | 100 | % | $ | 209 | 6 | % | $ | 839 | 29 | % | ||||||||||||||||
Yield on loans for the period ending | 5.56 | % | 5.75 | % | 5.66 | % | 5.53 | % | 5.21 | % | ||||||||||||||||||||||||||
(1) Actual unrounded values are used to calculate the reported percent disclosed. Accordingly, recalculations using the amounts in millions as disclosed in this release may not produce the same amounts. | ||||||||||||||||||||||||||||||||||||
Deposit Growth Results
The Company continues to maintain a traditional deposit mix, with the goal of keeping pace with growth in the loan portfolio. Deposit growth was primarily funded with money market accounts during the fourth quarter, which have historically adjusted with movements in Federal Funds rates. During the fourth quarter, the Company added short term wholesale funding and $62 million of brokered deposits to replace the brokered funding that previously rolled off in the third quarter of 2019.
(Dollars in millions) | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | % of Total | QoQ Growth ($) | QoQ Growth (%)(1) | YoY Growth ($) | YoY Growth (%)(1) | ||||||||||||||||||||||||||
Average deposits | ||||||||||||||||||||||||||||||||||||
Non-interest bearing deposits | $ | 492 | $ | 477 | $ | 513 | $ | 535 | $ | 522 | 14 | % | $ | (13 | ) | (3 | )% | $ | 30 | 6 | % | |||||||||||||||
Transaction deposits | 63 | 104 | 144 | 135 | 200 | 5 | % | 65 | 49 | 137 | 217 | |||||||||||||||||||||||||
Savings and money market deposits | 1,498 | 1,544 | 1,560 | 1,744 | 1,854 | 49 | % | 110 | 6 | 356 | 24 | |||||||||||||||||||||||||
Time deposits | 913 | 1,165 | 1,305 | 1,277 | 1,226 | 32 | % | (51 | ) | (4 | ) | 313 | 34 | |||||||||||||||||||||||
Total | $ | 2,966 | $ | 3,290 | $ | 3,522 | $ | 3,691 | $ | 3,802 | 100 | % | $ | 111 | 3 | % | $ | 836 | 28 | % | ||||||||||||||||
Cost of deposits for the period ending | 1.70 | % | 1.96 | % | 1.99 | % | 1.94 | % | 1.70 | % | ||||||||||||||||||||||||||
Cost of interest-bearing deposits for the period ending | 2.04 | % | 2.30 | % | 2.33 | % | 2.26 | % | 1.97 | % | ||||||||||||||||||||||||||
(1) Actual unrounded values are used to calculate the reported percent disclosed. Accordingly, recalculations using the amounts in millions as disclosed in this release may not produce the same amounts. | ||||||||||||||||||||||||||||||||||||
3
CROSSFIRST BANKSHARES, INC.
Asset Quality Position
The Company continued to add to the allowance for loan loss in order to support loan growth and changes in relative risk for the overall portfolio, recording a provision expense of $3.4 million for the fourth quarter. Net charge-offs were $5.5 million for the quarter as a result of a partial charge-off of a previously identified non-performing commercial and industrial loan, as compared to charge-offs of $0.2 million for the fourth quarter in 2018. During the quarter, non-performing assets to total assets and overall asset quality remained consistent with the previous quarters asset quality metrics.
Asset quality (Dollars in millions) | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | ||||||||||||||
Non-accrual loans | $ | 17.8 | $ | 13.0 | $ | 50.0 | $ | 43.6 | $ | 39.7 | |||||||||
Other real estate owned | — | 2.5 | 2.5 | 2.5 | 3.6 | ||||||||||||||
Non-performing assets | 17.8 | 15.5 | 52.8 | 46.7 | 47.9 | ||||||||||||||
Loans 90+ days past due and still accruing | — | — | 0.2 | 0.6 | 4.6 | ||||||||||||||
Loans 30 - 89 days past due | 3.7 | 31.1 | 23.6 | 64.7 | 4.5 | ||||||||||||||
Net charge-offs (recoveries) | 0.2 | 0.7 | — | 4.7 | 5.5 | ||||||||||||||
Asset quality metrics (%) | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | |||||||||
Non-performing assets to total assets | 0.43 | % | 0.36 | % | 1.18 | % | 1.00 | % | 0.97 | % | ||||
Allowance for loan loss to total loans | 1.23 | 1.22 | 1.24 | 1.18 | 1.06 | |||||||||
Allowance for loan loss to non-performing loans | 212 | 307 | 85 | 97 | 92 | |||||||||
Net charge-offs (recoveries) to average loans(1) | 0.03 | 0.09 | — | 0.53 | 0.58 | |||||||||
Provision to average loans(1) | 0.61 | 0.36 | 0.34 | 0.54 | 0.09 | |||||||||
(1) Interim periods annualized. | ||||||||||||||
Capital Position
At December 31, 2019, stockholders’ equity totaled $613 million, or $11.80 per share, compared to $602 million, or $11.59 per share, at September 30, 2019. Tangible common stockholders' equity was $606 million and tangible book value per share was $11.66 at December 31, 2019. The increase in stockholders' equity for the fourth quarter was primarily a result of quarterly earnings and modest movement in accumulated other comprehensive income for unrealized bond gains.
Period-end (Dollars in millions, except per share data) | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | ||||||||||||||
Total Stockholders' Equity | $ | 490 | $ | 481 | $ | 499 | $ | 602 | $ | 613 | |||||||||
Book value per share | $ | 10.21 | $ | 10.63 | $ | 11.00 | $ | 11.59 | $ | 11.80 | |||||||||
Tangible book value per share(1) | $ | 10.04 | $ | 10.46 | $ | 10.83 | $ | 11.44 | $ | 11.66 | |||||||||
Common equity tier 1 capital ratio | 11.75 | % | 11.23 | % | 11.02 | % | 12.91 | % | 12.19 | % | |||||||||
Tier 1 capital ratio | 12.53 | 11.23 | 11.04 | 12.93 | 12.21 | ||||||||||||||
Total capital ratio | 13.51 | 12.20 | 12.04 | 13.90 | 13.08 | ||||||||||||||
Leverage ratio | 12.43 | 11.15 | 10.87 | 12.57 | 12.08 | ||||||||||||||
(1) Represents a non-GAAP measure. See "Table 6. Non-GAAP Financial Measures" for a reconciliation of this measure. | |||||||||||||||||||
During the third quarter of 2019, the Company issued 6,594,362 new shares in its initial public offering, including the over-allotment, bringing its total net proceeds from the offering to approximately $87.0 million. The Company intends to use the net proceeds from the offering to support growth, organically or through mergers and acquisitions, and for general corporate purposes. As previously disclosed, the Company is currently considering using a portion of the net proceeds for the opening of a second smaller full-service branch in the Dallas MSA, in addition to consistently evaluating other strategic opportunities.
4
Conference Call and Webcast
CrossFirst will hold a conference call and webcast to discuss fourth quarter 2019 and year end results on Thursday, January 23, 2020 at 4 p.m. CDT / 5 p.m. EDT. The conference call and webcast may also include discussion of Company developments, forward-looking statements and other material information about business and financial matters. Investors, news media, and other participants should register for the call or audio webcast at https://investors.CrossFirstbankshares.com. Participants may dial into the call toll-free at (877) 621-5851 from anywhere in the U.S. or (470) 495-9492 internationally, using conference ID no. 5624769. Participants are encouraged to dial into the call or access the webcast approximately 10 minutes prior to the start time.
A replay of the webcast will be available on the Company's website. A replay of the conference call will be available two hours following the close of the call until January 30, 2020, accessible at (855) 859-2056 with conference ID no. 5624769.
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. These forward-looking statements reflect the Company's current views with respect to, among other things, future events and its financial performance. Any statements about management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release 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. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements.
Accordingly, the Company cautions you that any such forward-looking statements are not a guarantee of future performance and that 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. Such factors include, without limitation, those listed from time to time in reports that the Company files with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.
About CrossFirst
CrossFirst Bankshares, Inc., is a Kansas corporation and a registered bank holding company for its wholly-owned subsidiary CrossFirst Bank, which is headquartered in Leawood, Kansas. CrossFirst Bank has seven full-service banking offices primarily along the I-35 corridor in Kansas, Missouri, Oklahoma and Texas.
Unaudited Financial Tables
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CROSSFIRST BANKSHARES, INC.
TABLE 1. CONSOLIDATED BALANCE SHEETS
As of December 31, | |||||||
2018 | 2019 | ||||||
(unaudited) | |||||||
(Dollars in thousands) | |||||||
Assets | |||||||
Cash and cash equivalents | $ | 216,541 | $ | 187,320 | |||
Available for sale securities - taxable | 296,133 | 298,208 | |||||
Available for sale securities - tax-exempt | 367,545 | 443,426 | |||||
Premises and equipment, held for sale | 3,444 | — | |||||
Loans, net of allowance for loan losses of $40,896 and $37,826 at December 31, 2019 and 2018, respectively | 3,022,921 | 3,811,348 | |||||
Premises and equipment, net | 74,945 | 70,210 | |||||
Restricted equity securities | 14,525 | 17,278 | |||||
Interest receivable | 14,092 | 15,716 | |||||
Foreclosed assets held for sale | — | 3,619 | |||||
Deferred tax asset | 16,316 | 9,560 | |||||
Goodwill and other intangible assets, net | 7,796 | 7,694 | |||||
Bank-owned life insurance | 63,811 | 65,689 | |||||
Other | 9,146 | 12,943 | |||||
Total assets | $ | 4,107,215 | $ | 4,943,011 | |||
Liabilities and stockholders’ equity | |||||||
Deposits | |||||||
Non-interest bearing | $ | 484,284 | $ | 521,826 | |||
Savings, NOW and money market | 1,714,136 | 2,162,187 | |||||
Time | 1,009,677 | 1,239,746 | |||||
Total deposits | 3,208,097 | 3,923,759 | |||||
Federal funds purchased and repurchase agreements | 75,406 | 14,921 | |||||
Federal Home Loan Bank advances | 312,985 | 358,743 | |||||
Other borrowings | 884 | 921 | |||||
Interest payable and other liabilities | 19,507 | 31,245 | |||||
Total liabilities | 3,616,879 | 4,329,589 | |||||
Stockholders’ equity | |||||||
Redeemable preferred stock, $0.01 par value, $25 liquidation value: | |||||||
authorized - 5,000,000 shares, issued - 0 and 1,200,000 shares at December 31, 2019 and 2018, respectively | 12 | — | |||||
Common stock, $0.01 par value: | |||||||
authorized - 200,000,000 shares, issued - 51,969,203 and 45,074,322 shares at December 31, 2019 and 2018, respectively | 451 | 520 | |||||
Additional paid-in capital | 454,512 | 519,870 | |||||
Retained earnings | 38,567 | 76,666 | |||||
Other | (196 | ) | (85 | ) | |||
Accumulated other comprehensive income (loss) | (3,010 | ) | 16,451 | ||||
Total stockholders’ equity | 490,336 | 613,422 | |||||
Total liabilities and stockholders’ equity | $ | 4,107,215 | $ | 4,943,011 | |||
6
CROSSFIRST BANKSHARES, INC.
TABLE 2. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2019 | 2018 | 2019 | ||||||||||||
(Dollars in thousands except per share data) | |||||||||||||||
Interest Income | |||||||||||||||
Loans, including fees | $ | 40,813 | $ | 49,208 | $ | 130,075 | $ | 191,527 | |||||||
Available for sale securities | |||||||||||||||
Available for sale securities - Taxable | 2,243 | 1,894 | 7,972 | 8,540 | |||||||||||
Available for sale securities - Tax-exempt | 3,135 | 3,191 | 14,757 | 12,011 | |||||||||||
Deposits with financial institutions | 615 | 601 | 3,096 | 3,053 | |||||||||||
Dividends on bank stocks | 262 | 286 | 980 | 1,087 | |||||||||||
Total interest income | 47,068 | 55,180 | 156,880 | 216,218 | |||||||||||
Interest Expense | |||||||||||||||
Deposits | 12,733 | 16,247 | 39,372 | 67,668 | |||||||||||
Fed funds purchased and repurchase agreements | 440 | 91 | 1,068 | 592 | |||||||||||
Advances from Federal Home Loan Bank | 1,533 | 1,628 | 5,841 | 6,367 | |||||||||||
Other borrowings | 47 | 35 | 231 | 147 | |||||||||||
Total interest expense | 14,753 | 18,001 | 46,512 | 74,774 | |||||||||||
Net Interest Income | 32,315 | 37,179 | 110,368 | 141,444 | |||||||||||
Provision for Loan Losses | 4,500 | 3,350 | 13,500 | 13,900 | |||||||||||
Net Interest Income after Provision for Loan Losses | 27,815 | 33,829 | 96,868 | 127,544 | |||||||||||
Non-Interest Income | |||||||||||||||
Service charges and fees (rebates) on customer accounts | (62 | ) | 163 | 444 | 604 | ||||||||||
Gain (loss) on sale of available for sale securities | (70 | ) | 520 | 538 | 987 | ||||||||||
Impairment of premises and equipment held for sale | — | — | (171 | ) | (424 | ) | |||||||||
Gain on sale of loans | 209 | — | 827 | 207 | |||||||||||
Income from bank-owned life insurance | 458 | 462 | 1,969 | 1,878 | |||||||||||
Swap fee income, net | (14 | ) | 338 | 285 | 2,753 | ||||||||||
Other non-interest income | 674 | 703 | 2,191 | 2,710 | |||||||||||
Total non-interest income | 1,195 | 2,186 | 6,083 | 8,715 | |||||||||||
Non-Interest Expense | |||||||||||||||
Salaries and employee benefits | 12,429 | 13,818 | 56,118 | 57,114 | |||||||||||
Occupancy | 2,015 | 2,048 | 8,214 | 8,349 | |||||||||||
Professional fees | 899 | 1,041 | 3,320 | 2,964 | |||||||||||
Deposit insurance premiums | 775 | 767 | 3,186 | 2,787 | |||||||||||
Data processing | 525 | 676 | 1,995 | 2,544 | |||||||||||
Advertising | 709 | 685 | 2,691 | 2,455 | |||||||||||
Software and communication | 672 | 910 | 2,630 | 3,317 | |||||||||||
Depreciation and amortization | 482 | 414 | 1,788 | 1,734 | |||||||||||
Other non-interest expense | 1,660 | 1,526 | 5,813 | 6,384 | |||||||||||
Total non-interest expense | 20,166 | 21,885 | 85,755 | 87,648 | |||||||||||
Net Income Before Taxes | 8,844 | 14,130 | 17,196 | 48,611 | |||||||||||
Income tax expense (benefit) | (1,490 | ) | 2,746 | (2,394 | ) | 8,054 | |||||||||
Net Income | $ | 10,334 | $ | 11,384 | $ | 19,590 | $ | 40,557 | |||||||
Basic Earnings Per Share | $ | 0.22 | $ | 0.22 | $ | 0.48 | $ | 0.85 | |||||||
Diluted Earnings Per Share | $ | 0.22 | $ | 0.22 | $ | 0.47 | $ | 0.83 | |||||||
7
CROSSFIRST BANKSHARES, INC.
TABLE 3. YEAR-TO-DATE ANALYSIS OF CHANGES IN NET INTEREST INCOME
(UNAUDITED)
Twelve Months Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2018 | 2019 | ||||||||||||||||||||
Average Balance | Interest Income / Expense | Average Yield / Rate(3) | Average Balance | Interest Income / Expense | Average Yield / Rate(3) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Securities - taxable | $ | 281,709 | $ | 8,952 | 3.18 | % | $ | 330,051 | $ | 9,627 | 2.92 | % | |||||||||
Securities - tax-exempt(1) | 459,231 | 17,856 | 3.89 | 390,908 | 14,533 | 3.72 | |||||||||||||||
Federal funds sold | 16,377 | 339 | 2.07 | 15,195 | 364 | 2.40 | |||||||||||||||
Interest-bearing deposits in other banks | 159,279 | 2,757 | 1.73 | 139,538 | 2,689 | 1.93 | |||||||||||||||
Gross loans, net of unearned income(2) | 2,435,424 | 130,075 | 5.34 | 3,468,079 | 191,527 | 5.52 | |||||||||||||||
Total interest-earning assets(1) | 3,352,020 | $ | 159,979 | 4.77 | % | 4,343,771 | $ | 218,740 | 5.04 | % | |||||||||||
Allowance for loan losses | (30,921 | ) | (41,971 | ) | |||||||||||||||||
Other non-interest-earning assets | 173,556 | 197,963 | |||||||||||||||||||
Total assets | $ | 3,494,655 | $ | 4,499,763 | |||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Transaction deposits | $ | 56,321 | $ | 175 | 0.31 | % | $ | 146,109 | $ | 1,742 | 1.19 | % | |||||||||
Savings and money market deposits | 1,410,727 | 23,405 | 1.66 | 1,676,417 | 35,385 | 2.11 | |||||||||||||||
Time deposits | 835,595 | 15,792 | 1.89 | 1,243,304 | 30,541 | 2.46 | |||||||||||||||
Total interest-bearing deposits | 2,302,643 | 39,372 | 1.71 | 3,065,830 | 67,668 | 2.21 | |||||||||||||||
FHLB and short-term borrowings | 395,825 | 7,004 | 1.77 | 366,577 | 6,959 | 1.90 | |||||||||||||||
Trust preferred securities, net of fair value adjustments | 864 | 136 | 15.69 | 899 | 147 | 16.34 | |||||||||||||||
Non-interest-bearing deposits | 425,243 | — | — | 512,142 | — | — | |||||||||||||||
Cost of funds | 3,124,575 | $ | 46,512 | 1.49 | % | 3,945,448 | $ | 74,774 | 1.90 | % | |||||||||||
Other liabilities | 12,634 | 25,708 | |||||||||||||||||||
Stockholders’ equity | 357,446 | 528,607 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 3,494,655 | $ | 4,499,763 | |||||||||||||||||
Net interest income(1) | $ | 113,467 | $ | 143,966 | |||||||||||||||||
Net interest spread(1) | 3.28 | % | 3.14 | % | |||||||||||||||||
Net interest margin(1) | 3.39 | % | 3.31 | % | |||||||||||||||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0%. | |||||||||||||||||||||
(2) Average loan balances include nonaccrual 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. | |||||||||||||||||||||
8
CROSSFIRST BANKSHARES, INC.
YEAR-TO-DATE VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED) | |||||||||||
Twelve Months Ended | |||||||||||
December 31, 2019 over 2018 | |||||||||||
Average Volume | Yield/Rate | Net Change(2) | |||||||||
(Dollars in thousands) | |||||||||||
Interest Income | |||||||||||
Securities - taxable | $ | 1,449 | $ | (774 | ) | $ | 675 | ||||
Securities - tax-exempt(1) | (2,568 | ) | (755 | ) | (3,323 | ) | |||||
Federal funds sold | (26 | ) | 51 | 25 | |||||||
Interest-bearing deposits in other banks | (365 | ) | 297 | (68 | ) | ||||||
Gross loans, net of unearned income | 56,927 | 4,525 | 61,452 | ||||||||
Total interest income(1) | 55,417 | 3,344 | 58,761 | ||||||||
Interest Expense | |||||||||||
Transaction deposits | 564 | 1,003 | 1,567 | ||||||||
Savings and money market deposits | 4,911 | 7,069 | 11,980 | ||||||||
Time deposits | 9,115 | 5,634 | 14,749 | ||||||||
Total interest-bearing deposits | 14,590 | 13,706 | 28,296 | ||||||||
FHLB and short-term borrowings | (538 | ) | 493 | (45 | ) | ||||||
Trust preferred securities, net of fair value adjustments | 5 | 6 | 11 | ||||||||
Total interest expense | 14,057 | 14,205 | 28,262 | ||||||||
Net interest income(1) | $ | 41,360 | $ | (10,861 | ) | $ | 30,499 | ||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0%. | |||||||||||
(2) The change in interest not due solely to volume or rate has been allocated in proportion to the respective absolute dollar amounts of the change in volume or rate. | |||||||||||
9
CROSSFIRST BANKSHARES, INC.
TABLE 4. 2018 - 2019 QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME (UNAUDITED)
Three Months Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2018 | 2019 | ||||||||||||||||||||
Average Balance | Interest Income / Expense | Average Yield / Rate(3) | Average Balance | Interest Income / Expense | Average Yield / Rate(3) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Securities - taxable | $ | 305,995 | $ | 2,505 | 3.25 | % | $ | 317,524 | $ | 2,180 | 2.72 | % | |||||||||
Securities - tax-exempt(1) | 385,463 | 3,793 | 3.90 | 427,280 | 3,861 | 3.59 | |||||||||||||||
Federal funds sold | 9,239 | 58 | 2.49 | 4,750 | 19 | 1.61 | |||||||||||||||
Interest-bearing deposits in other banks | 113,403 | 558 | 1.95 | 152,917 | 582 | 1.51 | |||||||||||||||
Gross loans, net of unearned income(2) (3) | 2,911,350 | 40,812 | 5.56 | 3,749,865 | 49,208 | 5.21 | |||||||||||||||
Total interest-earning assets(1) | 3,725,450 | $ | 47,726 | 5.08 | % | 4,652,336 | $ | 55,850 | 4.76 | % | |||||||||||
Allowance for loan losses | (34,818 | ) | (43,877 | ) | |||||||||||||||||
Other non-interest-earning assets | 194,010 | 201,117 | |||||||||||||||||||
Total assets | $ | 3,884,642 | $ | 4,809,576 | |||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Transaction deposits | $ | 63,223 | $ | 74 | 0.46 | % | $ | 200,480 | $ | 603 | 1.19 | % | |||||||||
Savings and money market deposits | 1,498,075 | 7,747 | 2.05 | 1,854,042 | 8,059 | 1.72 | |||||||||||||||
Time deposits | 912,882 | 4,912 | 2.13 | 1,225,752 | 7,585 | 2.46 | |||||||||||||||
Total interest-bearing deposits | 2,474,180 | 12,733 | 2.04 | 3,280,274 | 16,247 | 1.97 | |||||||||||||||
FHLB and short-term borrowings | 439,322 | 1,984 | 1.79 | 366,190 | 1,719 | 1.86 | |||||||||||||||
Trust preferred securities, net of fair value adjustments | 876 | 36 | 16.34 | 913 | 35 | 15.18 | |||||||||||||||
Non-interest-bearing deposits | 491,689 | — | — | 521,799 | — | — | |||||||||||||||
Cost of funds | 3,406,067 | $ | 14,753 | 1.72 | % | 4,169,176 | $ | 18,001 | 1.71 | % | |||||||||||
Other liabilities | 17,694 | 34,443 | |||||||||||||||||||
Total stockholders' equity | 460,881 | 605,957 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 3,884,642 | $ | 4,809,576 | |||||||||||||||||
Net interest income(1) | $ | 32,973 | $ | 37,849 | |||||||||||||||||
Net interest spread(1) | 3.36 | % | 3.05 | % | |||||||||||||||||
Net interest margin(1) | 3.51 | % | 3.23 | % | |||||||||||||||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental 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. | |||||||||||||||||||||
10
CROSSFIRST BANKSHARES, INC.
QUARTER TO DATE VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED) | |||||||||||
Three Months Ended | |||||||||||
December 31, 2019 over 2018 | |||||||||||
Average Volume | Yield/Rate | Net Change(2) | |||||||||
(Dollars in thousands) | |||||||||||
Interest Income | |||||||||||
Securities - taxable | $ | 93 | $ | (418 | ) | $ | (325 | ) | |||
Securities - tax-exempt(1) | 387 | (319 | ) | 68 | |||||||
Federal funds sold | (23 | ) | (16 | ) | (39 | ) | |||||
Interest-bearing deposits in other banks | 167 | (143 | ) | 24 | |||||||
Gross loans, net of unearned income | 11,105 | (2,709 | ) | 8,396 | |||||||
Total interest income(1) | 11,729 | (3,605 | ) | 8,124 | |||||||
Interest Expense | |||||||||||
Transaction deposits | 305 | 224 | 529 | ||||||||
Savings and money market deposits | 1,672 | (1,360 | ) | 312 | |||||||
Time deposits | 1,841 | 832 | 2,673 | ||||||||
Total interest-bearing deposits | 3,818 | (304 | ) | 3,514 | |||||||
FHLB and short-term borrowings | (340 | ) | 75 | (265 | ) | ||||||
Trust preferred securities, net of fair value adjustments | 1 | (2 | ) | (1 | ) | ||||||
Total interest expense | 3,479 | (231 | ) | 3,248 | |||||||
Net interest income(1) | $ | 8,250 | $ | (3,374 | ) | $ | 4,876 | ||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0% | |||||||||||
(2) The change in interest not due solely to volume or rate has been allocated in proportion to the respective absolute dollar amounts of the change in volume or rate. | |||||||||||
11
CROSSFIRST BANKSHARES, INC.
TABLE 5. LINKED QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME (UNAUDITED)
Three Months Ended | |||||||||||||||||||||
September 30, 2019 | December 31, 2019 | ||||||||||||||||||||
Average Balance | Interest Income / Expense | Average Yield / Rate(3) | Average Balance | Interest Income / Expense | Average Yield / Rate(3) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Securities - taxable | $ | 335,045 | $ | 2,263 | 2.68 | % | $ | 317,524 | $ | 2,180 | 2.72 | % | |||||||||
Securities - tax-exempt(1) | 392,644 | 3,592 | 3.63 | 427,280 | 3,861 | 3.59 | |||||||||||||||
Federal funds sold | 16,315 | 89 | 2.16 | 4,750 | 19 | 1.61 | |||||||||||||||
Interest-bearing deposits in other banks | 171,913 | 881 | 2.03 | 152,917 | 582 | 1.51 | |||||||||||||||
Gross loans, net of unearned income(2) (3) | 3,540,707 | 49,327 | 5.53 | 3,749,865 | 49,208 | 5.21 | |||||||||||||||
Total interest-earning assets(1) | 4,456,624 | $ | 56,152 | 5.00 | % | 4,652,336 | $ | 55,850 | 4.76 | % | |||||||||||
Allowance for loan losses | (43,327 | ) | (43,877 | ) | |||||||||||||||||
Other non-interest-earning assets | 197,661 | 201,117 | |||||||||||||||||||
Total assets | $ | 4,610,958 | $ | 4,809,576 | |||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Transaction deposits | $ | 134,987 | $ | 386 | 1.13 | % | $ | 200,480 | $ | 603 | 1.19 | % | |||||||||
Savings and money market deposits | 1,743,575 | 9,553 | 2.17 | 1,854,042 | 8,059 | 1.72 | |||||||||||||||
Time deposits | 1,276,571 | 8,064 | 2.51 | 1,225,752 | 7,585 | 2.46 | |||||||||||||||
Total interest-bearing deposits | 3,155,133 | 18,003 | 2.26 | 3,280,274 | 16,247 | 1.97 | |||||||||||||||
FHLB and short-term borrowings | 345,794 | 1,703 | 1.95 | 366,190 | 1,719 | 1.86 | |||||||||||||||
Trust preferred securities, net of fair value adjustments | 904 | 37 | 16.06 | 913 | 35 | 15.18 | |||||||||||||||
Non-interest-bearing deposits | 535,467 | — | — | 521,799 | — | — | |||||||||||||||
Cost of funds | 4,037,298 | $ | 19,743 | 1.94 | % | 4,169,176 | $ | 18,001 | 1.71 | % | |||||||||||
Other liabilities | 29,833 | 34,443 | |||||||||||||||||||
Total stockholders' equity | 543,827 | 605,957 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 4,610,958 | $ | 4,809,576 | |||||||||||||||||
Net interest income(1) | $ | 36,409 | $ | 37,849 | |||||||||||||||||
Net interest spread(1) | 3.06 | % | 3.05 | % | |||||||||||||||||
Net interest margin(1) | 3.24 | % | 3.23 | % | |||||||||||||||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0%. | |||||||||||||||||||||
(2) Average loan balances include nonaccrual 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. | |||||||||||||||||||||
12
CROSSFIRST BANKSHARES, INC.
LINKED QUARTER VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED) | |||||||||||
Three Months Ended | |||||||||||
December 31, 2019 over September 30, 2019 | |||||||||||
Average Volume | Yield/Rate | Net Change(2) | |||||||||
(Dollars in thousands) | |||||||||||
Interest Income | |||||||||||
Securities - taxable | $ | (118 | ) | $ | 35 | $ | (83 | ) | |||
Securities - tax-exempt(1) | 310 | (41 | ) | 269 | |||||||
Federal funds sold | (51 | ) | (19 | ) | (70 | ) | |||||
Interest-bearing deposits in other banks | (90 | ) | (209 | ) | (299 | ) | |||||
Gross loans, net of unearned income | 2,825 | (2,944 | ) | (119 | ) | ||||||
Total interest income(1) | 2,876 | (3,178 | ) | (302 | ) | ||||||
Interest Expense | |||||||||||
Transaction deposits | 195 | 22 | 217 | ||||||||
Savings and money market deposits | 576 | (2,070 | ) | (1,494 | ) | ||||||
Time deposits | (319 | ) | (160 | ) | (479 | ) | |||||
Total interest-bearing deposits | 452 | (2,208 | ) | (1,756 | ) | ||||||
FHLB and short-term borrowings | 97 | (81 | ) | 16 | |||||||
Trust preferred securities, net of FV adjustments | — | (2 | ) | (2 | ) | ||||||
Total interest expense | 549 | (2,291 | ) | (1,742 | ) | ||||||
Net interest income(1) | $ | 2,327 | $ | (887 | ) | $ | 1,440 | ||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0%. | |||||||||||
(2) The change in interest not due solely to volume or rate has been allocated in proportion to the respective absolute dollar amounts of the change in volume or rate. | |||||||||||
13
CROSSFIRST BANKSHARES, INC.
TABLE 6. NON-GAAP FINANCIAL MEASURES
Non-GAAP Financial Measures
In addition to disclosing financial measures determined in accordance with GAAP, the Company discloses non-GAAP financial measures in this release. The Company believes that the non-GAAP financial measures presented in this release reflect industry conventions, or standard measures within the industry, and provide useful information to the Company's management, investors and other parties interested in the Company's operating performance. These measurements should be considered in addition to, but not as a substitute for, financial information prepared in accordance with GAAP. We have defined below each of the non-GAAP measures we use in this release, but these measures may not be synonymous to similar measurement terms used by other companies.
CrossFirst provides reconciliations of these non-GAAP measures below. The measures used in this release include the following:
• | We calculate "return on average tangible common equity" as net income available to common stockholders divided by average tangible common equity. Average tangible common equity is calculated as average common equity less average goodwill and intangibles and average preferred equity. The most directly comparable GAAP measure is return on average common equity. |
• | We calculate ‘‘non-GAAP core operating income’’ as net income adjusted to remove non-recurring or non-core income and expense items related to: |
▪ | Restructuring charges and adjustments associated with the transition of a former executive - we incurred restructuring charges in the second quarter of 2018 related to the acceleration of certain stock-based compensation and employee costs, some of which were adjusted in the fourth quarter of 2018. |
▪ | Impairment charges associated with two buildings that were held-for-sale - We acquired a new, larger corporate headquarters to accommodate our business needs, which eliminated the need for two smaller support buildings. The two smaller support buildings had been acquired recently and were extensively remodeled, which resulted in a difference between book and market value for those assets. We sold one of the buildings in 2018. The remaining building was sold during the second quarter of 2019. |
▪ | State tax credits as a result of the purchase and improvement of our new corporate headquarters. We acquired a new, larger corporate headquarters to accommodate our business needs. Our purchase and improvement of the new headquarters resulted in state tax credits. |
The most directly comparable GAAP financial measure for non-GAAP core operating income is net income.
• | We calculate "Non-GAAP core operating return on average assets" as as non-GAAP core operating income (as defined above) divided by average assets. The most directly comparable GAAP financial measure is return on average assets, which is calculated as net income divided by average assets. |
• | We calculate ‘‘non-GAAP core operating return on average common equity’’ as non-GAAP core operating income (as defined above) less preferred dividends divided by average common equity. The most directly comparable GAAP financial measure is return on average common equity, which is calculated as net income less preferred dividends divided by average common equity. |
• | We calculate "tangible common stockholders' equity" as total stockholders' equity less goodwill and intangibles and preferred equity. The most directly comparable GAAP measure is total stockholders' equity. |
• | We calculate ‘‘tangible book value per share’’ as tangible common stockholders' equity (as defined above) divided by the total number of shares outstanding. The most directly comparable GAAP measure is book value per share. |
• | We calculate "non-GAAP core operating efficiency ratio - fully tax equivalent" as non-interest expense adjusted to remove non-recurring non-interest expenses as defined above under non-GAAP core operating income divided by net interest income on a fully tax-equivalent basis plus non-interest income adjusted to remove non-recurring non-interest income as defined above under non-GAAP core operating income. The most directly comparable financial measure is the efficiency ratio. |
14
CROSSFIRST BANKSHARES, INC.
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | 12/31/2018 | 12/31/2019 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP return on average tangible common equity: | |||||||||||||||||||||||||||
Net income available to common stockholders | $ | 9,809 | $ | 9,175 | $ | 9,439 | $ | 10,384 | $ | 11,384 | $ | 17,490 | $ | 40,382 | |||||||||||||
Average common equity | 430,881 | 466,506 | 486,880 | 543,827 | 605,957 | 327,446 | 526,224 | ||||||||||||||||||||
Less: average goodwill and intangibles | 7,810 | 7,784 | 7,759 | 7,733 | 7,708 | 7,847 | 7,746 | ||||||||||||||||||||
Average tangible common equity | 423,071 | 458,722 | 479,121 | 536,094 | 598,249 | 319,599 | 518,478 | ||||||||||||||||||||
Return on average common equity | 9.03 | % | 7.98 | % | 7.78 | % | 7.58 | % | 7.45 | % | 5.34 | % | 7.67 | % | |||||||||||||
Non-GAAP Return on average tangible common equity | 9.20 | % | 8.11 | % | 7.90 | % | 7.68 | % | 7.55 | % | 5.47 | % | 7.79 | % | |||||||||||||
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | 12/31/2018 | 12/31/2019 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP core operating income: | |||||||||||||||||||||||||||
Net Income | $ | 10,334 | $ | 9,350 | $ | 9,439 | $ | 10,384 | $ | 11,384 | $ | 19,590 | $ | 40,557 | |||||||||||||
Add: restructuring charges | (815 | ) | — | — | — | — | 4,733 | — | |||||||||||||||||||
Less: tax effect(1) | (210 | ) | — | — | — | — | 1,381 | — | |||||||||||||||||||
Restructuring charges, net of tax | (605 | ) | — | — | — | — | 3,352 | — | |||||||||||||||||||
Add: fixed asset impairments | — | — | 424 | — | — | 171 | 424 | ||||||||||||||||||||
Less: tax effect(1) | — | — | 109 | — | — | 44 | 109 | ||||||||||||||||||||
Fixed asset impairments, net of tax | — | — | 315 | — | — | 127 | 315 | ||||||||||||||||||||
Add: state tax credit(2) | (3,129 | ) | (1,361 | ) | — | — | — | (3,129 | ) | (1,361 | ) | ||||||||||||||||
Non-GAAP core operating income | $ | 6,600 | $ | 7,989 | $ | 9,754 | $ | 10,384 | $ | 11,384 | $ | 19,940 | $ | 39,511 | |||||||||||||
(1) Represents the tax impact of the adjustments above at a tax rate of 25.73% | |||||||||||||||||||||||||||
(2) No tax effect | |||||||||||||||||||||||||||
Quarter Ended | Twelve Months Ended | |||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | 12/31/2018 | 12/31/2019 | ||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Non-GAAP core operating return on average assets: | ||||||||||||||||||||
Net income | 10,334 | 9,350 | 9,439 | 10,384 | 11,384 | 19,590 | 40,557 | |||||||||||||
Non-GAAP core operating income | 6,600 | 7,989 | 9,754 | 10,384 | 11,384 | 19,940 | 39,511 | |||||||||||||
Average assets | 3,884,642 | 4,168,243 | 4,402,002 | 4,610,958 | 4,809,576 | 3,494,655 | 4,499,763 | |||||||||||||
Return on average assets | 1.06 | % | 0.91 | % | 0.86 | % | 0.89 | % | 0.94 | % | 0.56 | % | 0.90 | % | ||||||
Non-GAAP core operating return on average assets | 0.67 | % | 0.78 | % | 0.89 | % | 0.89 | % | 0.94 | % | 0.57 | % | 0.88 | % | ||||||
15
CROSSFIRST BANKSHARES, INC.
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | 12/31/2018 | 12/31/2019 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP core operating return on common equity: | |||||||||||||||||||||||||||
Net income | $ | 10,334 | $ | 9,350 | $ | 9,439 | $ | 10,384 | $ | 11,384 | $ | 19,590 | $ | 40,557 | |||||||||||||
Non-GAAP core operating income | 6,600 | 7,989 | 9,754 | 10,384 | 11,384 | 19,940 | 39,511 | ||||||||||||||||||||
Less: Preferred stock dividends | 525 | 175 | — | — | — | 2,100 | 175 | ||||||||||||||||||||
Net income available to common stockholders | 9,809 | 9,175 | 9,439 | 10,384 | 11,384 | 17,490 | 40,382 | ||||||||||||||||||||
Non-GAAP core operating income available to common stockholders | 6,075 | 7,814 | 9,754 | 10,384 | 11,384 | 17,840 | 39,336 | ||||||||||||||||||||
Average common equity | $ | 430,881 | $ | 466,506 | $ | 486,880 | $ | 543,827 | $ | 605,957 | $ | 327,446 | $ | 526,224 | |||||||||||||
GAAP return on average common equity | 9.03 | % | 7.98 | % | 7.78 | % | 7.58 | % | 7.45 | % | 5.34 | % | 7.67 | % | |||||||||||||
Non-GAAP core operating return on common equity | 5.59 | % | 6.79 | % | 8.04 | % | 7.58 | % | 7.45 | % | 5.45 | % | 7.48 | % | |||||||||||||
Quarter Ended | |||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | |||||||||||||||
(Dollars in thousands except per share data) | |||||||||||||||||||
Tangible common stockholders' equity: | |||||||||||||||||||
Total stockholders' equity | $ | 490,336 | $ | 480,514 | $ | 499,195 | $ | 602,435 | $ | 613,422 | |||||||||
Less: goodwill and other intangible assets | 7,796 | 7,770 | 7,745 | 7,720 | 7,694 | ||||||||||||||
Less: preferred stock | 30,000 | — | — | — | — | ||||||||||||||
Tangible common stockholders' equity | $ | 452,540 | $ | 472,744 | $ | 491,450 | $ | 594,715 | $ | 605,728 | |||||||||
Tangible book value per share: | |||||||||||||||||||
Tangible common stockholders' equity | $ | 452,540 | $ | 472,744 | $ | 491,450 | $ | 594,715 | $ | 605,728 | |||||||||
Shares outstanding at end of period | 45,074,322 | 45,202,370 | 45,367,641 | 51,969,203 | 51,969,203 | ||||||||||||||
Book value per share | $ | 10.21 | $ | 10.63 | $ | 11.00 | $ | 11.59 | $ | 11.80 | |||||||||
Tangible book value per share | $ | 10.04 | $ | 10.46 | $ | 10.83 | $ | 11.44 | $ | 11.66 | |||||||||
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | 12/31/2018 | 12/31/2019 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP Core Operating Efficiency Ratio - Fully Tax Equivalent | |||||||||||||||||||||||||||
Non-interest expense | $ | 20,166 | $ | 22,631 | $ | 21,960 | $ | 21,172 | $ | 21,885 | $ | 85,755 | $ | 87,648 | |||||||||||||
Less: restructuring charge | $ | (815 | ) | $ | — | $ | — | $ | — | $ | — | $ | 4,733 | $ | — | ||||||||||||
Non-GAAP non-interest expense (numerator) | 20,981 | 22,631 | 21,960 | 21,172 | $ | 21,885 | $ | 81,022 | $ | 87,648 | |||||||||||||||||
Net interest income | 32,315 | 33,605 | 34,874 | 35,786 | 37,179 | 110,368 | 141,444 | ||||||||||||||||||||
Tax equivalent interest income | 658 | 616 | 612 | 624 | 670 | 3,099 | 2,522 | ||||||||||||||||||||
Non-interest income | 1,195 | 1,645 | 1,672 | 3,212 | 2,186 | 6,083 | 8,715 | ||||||||||||||||||||
Add: fixed asset impairments | $ | — | $ | — | $ | 424 | $ | — | $ | — | $ | 171 | $ | 424 | |||||||||||||
Total tax-equivalent income (denominator) | $ | 34,168 | $ | 35,866 | $ | 37,582 | $ | 39,622 | $ | 40,035 | $ | 119,721 | $ | 153,105 | |||||||||||||
Efficiency Ratio | 60.18 | % | 64.20 | % | 60.09 | % | 54.29 | % | 55.60 | % | 73.64 | % | 58.37 | % | |||||||||||||
Non-GAAP Core Operating Efficiency Ratio - Fully Tax Equivalent | 61.41 | % | 63.10 | % | 58.43 | % | 53.43 | % | 54.66 | % | 67.68 | % | 57.25 | % | |||||||||||||
16
NASDAQ: CFB | January 23, 2020
FORWARD-LOOKING STATEMENTS. This presentation and oral statements made during this meeting contain forward-looking statements. These forward- looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "might," "should," "could," "predict," "potential," "believe," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "strive," "projection," "goal," "target," "outlook," "aim," "would," "annualized" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. 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. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: risks related to general business and economic conditions and any regulatory responses to such conditions; our ability to effectively execute our growth strategy and manage our growth, including identifying and consummating suitable mergers and acquisitions; the geographic concentration of our markets; fluctuation of the fair value of our investment securities due to factors outside our control; our ability to successfully manage our credit risk and the sufficiency of our allowance; regulatory restrictions on our ability to grow due to our concentration in commercial real estate lending; our ability to attract, hire and retain qualified management personnel; interest rate fluctuations; our ability to raise or maintain sufficient capital; competition from banks, credit unions and other financial services providers; the effectiveness of our risk management framework in mitigating risks and losses; our ability to maintain effective internal control over financial reporting; our ability to keep pace with technological changes; system failures and interruptions, cyber-attacks and security breaches; employee error, fraudulent activity by employees or clients and inaccurate or incomplete information about our clients and counterparties; our ability to maintain our reputation; costs and effects of litigation, investigations or similar matters; risk exposure from transactions with financial counterparties; severe weather, acts of god, acts of war or terrorism; compliance with governmental and regulatory requirements; changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters; compliance with requirements associated with being a public company; level of coverage of our business by securities analysts; and future equity issuances. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward- looking statement, whether as a result of new information, future developments or otherwise, except as required by law. NON-GAAP FINANCIAL INFORMATION. This presentation contains certain non-GAAP measures. These non-GAAP measures, as calculated by CrossFirst, are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these non-GAAP measures are not measures of financial performance or liquidity under GAAP and should not be considered alternatives to the Company's other financial information determined under GAAP. See the Appendix for reconciliations of certain non-GAAP measures. MARKET AND INDUSTRY DATA. This presentation references certain market, industry and demographic data, forecasts and other statistical information. We have obtained this data, forecasts and information from various independent, third party industry sources and publications. Nothing in the data, forecasts or information used or derived from third party sources should be construed as advice. Some data and other information are also based on our good faith estimates, which are derived from our review of industry publications and surveys and independent sources. We believe that these sources and estimates are reliable but have not independently verified them. Statements as to our market position are based on market data currently available to us. Although we are not aware of any misstatements regarding the economic, employment, industry and other market data presented herein, these estimates involve inherent risks and uncertainties and are based on assumptions that are subject to change. 2
George F. Jones Jr. – President, CEO and Director of CrossFirst Other Senior Executives • Joined CrossFirst in 2016 after a short retirement from Texas Capital Bancshares, Inc. (TCBI) • Founding executive of TCBI in 1998 • Led TCBI through 50 consecutive profitable quarters and growth to $12 billion in assets Amy Fauss Chief Operating Officer of CrossFirst Bank 28+ years of banking experience Mike Maddox – President, CEO of CrossFirst Bank and Director of CrossFirst Joined CrossFirst in 2009 • Joined CrossFirst in 2008 after serving as Kansas City regional president for Intrust Bank Tom Robinson • Practicing lawyer for more than six years before joining Intrust Bank Chief Risk Officer of CrossFirst • Graduate School of Banking at the University of Wisconsin - Madison 35+ years of banking experience Joined CrossFirst in 2011 David O’Toole – CFO, Chief Investment Officer and Director of CrossFirst, CFO of CrossFirst Bank Aisha Reynolds General Counsel of CrossFirst and • More than 40 years of experience in banking, accounting, valuation and investment banking CrossFirst Bank • Founding shareholder and director of CrossFirst Bank and became CFO in 2008 13+ years of experience • Co-founder and managing partner of a national bank consulting and accounting firm Joined CrossFirst in 2018 • Served on numerous boards of directors of banks and private companies, including the Continental Airlines, Inc. travel agency advisory board Randy Rapp – Chief Credit Officer of CrossFirst Bank • More than 30 years of experience in banking, primarily as a credit analyst, commercial relationship manager and credit officer • Joined CrossFirst in April 2019 after serving as Executive Vice President and Chief Credit Officer of Texas Capital Bank, National Association from May 2015 until March 2019 • Mr. Rapp joined Texas Capital Bank in 2000 Matt Needham – Director of Strategy and Investor Relations of CrossFirst • More than 15 years experience in banking, strategy, accounting and investment banking, five with CrossFirst • Deep experience in capital markets including valuation, mergers, acquisitions and divestitures • Provided assurance and advisory services with Ernst & Young • Former Deputy Bank Commissioner in Kansas and has served on several bank boards • MBA Wake Forest University, obtained CFA designation and CPA, Graduate School of Banking at the University of Colorado 3
• $4.9 billion(1) asset banking operation founded in 2007 • Branch-lite structure operating 7 branches in key markets (2) along the I-35 corridor (1) (1) • 3rd largest bank headquartered in the Kansas City MSA (1) (1) • High-growth commercial banking franchise with 360 employees (1) • High quality people, strong culture & relationship-oriented business model • Serving businesses, business owners, professionals and their personal networks • Core focus on improving profitability & operating (Number of Locations) efficiency Financial Highlights (Full Year Ended 12/31/19)(2) Balance Sheet Performance Metrics Asset Quality Metrics Assets: $4,943 ROAA: 0.90% NPAs / Assets: 0.97% Gross Loans:( 3) $3,852 ROACE: 7.67% NCOs / Avg. Loans: 0.31% Deposits: $3,924 Efficiency Ratio: 58.37% Reserves / Loans: 1.06% Tier 1 Leverage: 12.08% NIM(FTE): 3.31% Reserves / NPLs: 92% Total Risk-Based Capital: 13.08% Net Income: $40.6 Classified Loans / Capital + ALLL 13.3% (1) As of December 31, 2019. (2) Dollars are in millions. 4 (3) Net of unearned income
✓ Attract and develop highest level of talent ✓ Active expansion through acquisitions and new market development to utilize capital from IPO and optimize capital structure ✓ Serve businesses, business owners, professionals and their personal networks ✓ Focus on core markets; grow organically using a “Relationship Banking” model ✓ Maintain branch-lite model with strategically placed locations ✓ Improve profitability and operating efficiency ✓ Execute on our high-tech, high-touch banking strategy ✓ Leverage technology to provide a high level of convenience ✓ Employ effective enterprise risk management ✓ Expand niche lending verticals: Enterprise Value Lending (2017), Relational Tribal Nations Lending (2017), Relational High Volume Builder Lending (2017) 5
Commentary Return on Average Assets(1) ▪ Since 2010, CrossFirst historically 1.5% invested in talent and acquisitions 1.2% 1.06% to grow its market presence and 0.91% 0.89% 0.89% 0.94% 0.94% expand product lines or lending 0.9% 0.78% 0.86% 0.89% 0.67% verticals, such as energy lending 0.6% ▪ In 2018, we shifted to a focus on 0.3% earnings and efficiency, while still maintaining robust balance sheet 0.0% growth Q4 Q1 Q2 Q3 Q4 2019 2018 2019 2019 2019 (2) ▪ ROAA and Core Efficiency are ROAA Core ROAA trending consistent with management’s plan Core Efficiency Ratio (Fully Tax Equivalent) 100% 80% 64.20% 63.10% 60.18% 61.41% 60.09% 58.43% 60% 54.29% 53.43% 55.60% 54.66% 40% 20% 0% Q4 Q1 Q2 Q3 Q4 2018 2019 2019 2019 2019 Efficiency Ratio Core Efficiency Ratio - Fully Tax Equivalent (2) (1) Ratios are annualized. (2) Represents a non-GAAP financial measure. See Non-GAAP Reconciliation slides in Appendix for additional detail. Full Tax-equivalent efficiency 6 ratio is presented.
Commentary Yield on Loans and Cost of Total Deposits 6% 5.52% 5.56% ▪ Focus on commercial lending 5.34% 5.21% 4.89% increased the asset sensitivity of 4.62% 4.60% our balance sheet, with 4% approximately 76% floating rate loans or maturing within one year 1.89% 1.70% 1.70% 2% 1.44% 0.91% 0.87% 0.99% ▪ NIM has remained in a narrow range in spite of significant 0% interest rate volatility 2015 2016 2017 2018 2019 QTD QTD Yield on Loans Cost of Total Deposits 12/31/18 12/31/19 ▪ Loan to deposit ratio decreased from 99.2% to 98.2% Net Interest Margin – Fully Tax Equivalent 4% 3.51% 3.40% 3.39% 3.27% 3.24% 3.31% 3.23% 3% 2% 1% 0% 2015 2016 2017 2018 2019 QTD QTD 12/31/18 12/31/19 7
Commentary Total Deposits $4,500 ▪ CrossFirst has generated significant $4,000 $3,924 growth in core deposits with modest $3,500 $3,208 reliance on wholesale funding $3,000 $2,500 $2,303 $2,000 $1,694 ▪ Strategically focused on non- $1,500 $1,295 interest bearing deposits and $1,000 treasury services led by an $500 exceptional group of business and $0 private bankers 2015 2016 2017 2018 2019 ▪ Brokered deposits of $392 million or 9.9% of total deposits at Deposit Mix by Type 2019 Deposit Composition December 31, 2019 were utilized $4,000 $3,924 $3,584 $3,658 primarily to minimize interest rate $3,400 $3,500 $3,208 $710 risk $753 $766 Time Transaction $3,000 $728 DDA $570 $530 Deposits ≥ Deposits $469 13% 7% $2,500 $535 $100,000 $440 $554 18% ▪ During Q4 2019, obtained $62 $2,000 million of brokered deposits to $1,903 $1,500 $1,776 replace maturities from Q3 2019 $1,632 $1,511 $1,634 Savings & Time Deposits MMA $1,000 < $100,000 48% $259 14% $500 $82 $119 $137 $146 $484 $488 $512 $514 $522 $0 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Non-interest bearing deposits Transaction Deposits Savings & MMA Time Deposits < $100,000 Time Deposits ≥ $100,000 8 Dollars are in millions and amounts shown are as of the end of the period.
Investment Portfolio Breakout as of December 31, 2019(1) Commentary Municipal - Taxable Other 0.5% ▪ At year-end, the duration of the 1.7% portfolio was approximately 4.7 CMO (Fixed) years and fully taxable equivalent 17.4% (FTE) yield for 2019 was 3.35% MBS (Fixed) (1) Municipal - Tax- Exempt 20.6% Total: $741.6M 59.8% ▪ During Q4 2019, $75 million of new securities were purchased with an average FTE yield of 3.11% ▪ During Q4 2019, $37 million of securities ($35 million were MBS/CMO) were sold to reposition the portfolio mix to lower sensitivity. Tax Exempt Municipals Average Yield on Securities – Fully Tax Equivalent were purchased as the 5% replacement 3.85% 4% 3.72% 3.63% 3.62% 3.61% 3.35% 3.22% 3% ▪ Our marketable securities portfolio has a substantial unrealized gain of $21.8 million at 2% December 31, 2019 1% 0% 2015 2016 2017 2018 2019 Q4 2018 Q4 2019 9 (1) Based on approximate fair value.
2018 Non-Interest Income Composition 2019 Non-Interest Income Composition ($6,083)1 ($8,715)1 Service Charges & Other Non- Other Non-Interest Fees Service Charges & Income 7% Swap Fee Interest Income 33% Fees 26% Income 7% Gain on Sale of 5% Gain on Sale of Securities Securities 11% 9% Swap Fee Income 32% BOLI Income BOLI Income 32% Gain on 22% Gain on Sale of Sale of Loans Loans 14% 2% (1) Dollars are in thousands and amounts shown are as of the end of the period. 10
Slowing Non-interest Expense Growth $100 2% $90 38% $80 $70 53% $60 $50 33% $40 $30 $20 $10 $- 2015 2016 2017 2018 2019 Salaries & Benefits Occupancy Expense & Professional Fees FDIC Premiums Data Processing, Software & Comm. Advertising & Other Exp. Assets per Employee $180.0 Lowering Expenses while Growing 3.00% 800 $13.8 $160.0$15.0 2.53% 2.45% 2.50% 700 $140.0 2.17% 2.21% $11.6 $13.0 1.95% 600 $120.0 2.00% $10.8 $10.5 $9.7 $11.0 500 $100.0 $85.8 $87.6 1.50% 400 353 357 $80.0$9.0 305 $62.1 300 $60.0 1.00% 203 $7.0 $40.6 200 146 $40.0 $30.6 0.50% 100 $20.0$5.0 0 $0.0$3.0 0.00% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Employees Assets/Employee Non-interest Expense Non-interest expense / Average Assets 11 Dollars are in millions and amounts shown are as of the end of the period.
Commentary Operating Revenue(1) $160 ▪ Our balance sheet growth, $150.2 QTD ‘18 – QTD ‘19 combined with a relatively stable $140 Growth: 17.5% $116.5 net interest margin, has enabled $120 robust operating revenue growth $100 $80 $78.5 $57.5 $60 $44.6 $33.5 $39.4 ▪ Company redeemed all preferred $40 shares in Q1 2019, which was $20 accretive to EPS $0 ▪ Historical loan growth has required significant loan loss provisions that impacted earnings (approximately $51.9 million Earnings Performance since the beginning of 2015) $60 $48.6 $50 $40.6 QTD ‘18 – QTD ‘19 $40 Net Income Growth: 10.2% $30 $17.2 $10.4 $8.8 $14.1 $20 $19.6 $5.8 $7.5 $8.1 $10.3 $10.3 $11.4 $10 $4.4 $0 Net Income Pretax Net Income Note: Dollars in charts are in millions. 12 (1) Defined as net-interest income + non-interest income.
Gross Loans (Net of Unearned Income) Commentary $3,852 $4,000 ▪ Our loan growth has been nearly all organic and we continue to see $3,061 ample opportunities within our $3,000 existing markets $1,996 $2,000 ▪ Diversification remains a core $1,297 tenet $993 $1,000 ▪ Purchased loan participations totaled $99 million and a $0 combination of shared national 2015 2016 2017 2018 2019 credits and syndications purchased totaled $296 million at year end 2019 ▪ Generally we only buy portions Gross Loans by Type 2019 Gross Loan Composition of participations or syndicated $3,862 $4,000 $3,639 loans with borrowers with $3,476 $45 Residential Real $3,287 $44 $399 $3,500 Construction & whom we could lead next $3,069 $46 $365 Estate $42 $359 Land $628 10% Consumer & lending opportunity $3,000 $44 $331 $528 Development $246 $463 Equity Lines $427 16% $2,500 $440 1% ▪ Loan participations sold of $1,024 $968 $993 $224 million and $177 million $2,000 $847 $948 Commercial Commercial of syndications sold at year $1,500 $386 $396 $409 $358 $376 Real Estate & Industrial Energy 35% end 2019 $1,000 27% 11% $1,254 $1,313 $1,357 $500 $1,134 $1,163 $0 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Commercial & Industrial Energy Commercial Real Estate Construction & Land Development Residential Real Estate Consumer 13 Dollars in charts are in millions. Amounts shown are as of the end of the period.
Pillars of CrossFirst Asset Quality Nonperforming Assets / Assets ▪ Proven and comprehensive credit policy 2.0% and procedures ▪ Highly competent and experienced 1.5% bankers 1.18% 1.00% 0.97% ▪ Effective credit administration process 1.0% ▪ Commitment to diversification 0.43% ▪ Disciplined and standardized 0.5% 0.36% underwriting 0.20% 0.18% 0.08% ▪ Proactive problem management 0.0% ▪ Decisive response to opportunities 2015 2016 2017 2018 Q1 Q2 Q3 2019 Full Year 2019 2019 2019 Commentary ▪ Credit quality has remained strong Net Charge-Offs / Average Loans(1) since inception 0.75% ▪ In 2017, the Bank experienced one significant charge-off of 0.58% 0.53% approximately $5 million (0.34% of average loans) on one C&I credit 0.50% 0.44% ▪ In Q3 the Bank charged-off $4.7 million from liquidating two legacy 0.31% NPAs, one C&I and one in Energy 0.25% ▪ Increase in Q2 NPAs from one loan negatively impacted by a law change 0.11% 0.07% 0.09% or 0.69% of the 1.18% 0.04% 0.00% ▪ $5.5 million in charge-offs in Q4 0.00% includes a partial charge-off of large 2015 2016 2017 2018 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 one-off non-performing credit 14 (1) Ratio is annualized.
Allowance for Loan Losses / Total Loans Commentary Classified Loans / (Total Capital + LLR) $80 19.2% Recent Credit Quality & ALL Trends $200 18.7% $70 1.24% ▪ Reduction in reserve as a result of the 1.23% 1.22% 18.0% 1.18% 16.3% charge-off of problem credits; reduction $60 1.06% commensurate with the risk in the $150 $50 13.2% 13.3% portfolio $42.9 $43.0 $40.9 13.0% $37.8 $40.0 $101.4 $97.5 ▪ The Company is still assessing the $40 $100 $88.3 $85.2 $86.9 timeline for which CECL will be adopted reviewing the impact it will have on the $30 8.0% allowance and capital $20 $50 $10 3.0% $0 0.00% $0 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q4 Q1 Q2 Q3 Q4 2018 2019 2019 2019 2019 Capital Analysis Capital Ratios ▪ IPO during third quarter 2019 resulted 20% 12.53% 12.93% in $87 million of new capital 11.23% 11.04% 12.21% 13.90% ▪ Unfunded commitments totaled $1.5 15% 13.51% 12.91% 13.08% 11.75% 12.20% 12.04% 12.19% billion for year-ended 2019, 42% of 11.23% 11.02% which are commitments to fund C&I 10% loans and 58% are other loan commitments 5% ▪ Unfunded commitments have an impact on the Risk-Based Capital Ratios 0% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Common Equity Tier 1 Tier 1 Risk Based Total Risk-Based Capital Amounts are in millions. 15
16
Compound Annual Growth Rates Total Assets Since Since 2007 2012 $4,943 Total Assets 56.8% 36.3% $4,107 $2,961 $2,133 $1,574 $1,220 $847 $565 $311 $355 $22 $77 $155 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2007 2010 2012 2014 Established with Acquired Leawood, Expansion into Expansion into 2017 2019 initial presence in KS-based Wichita and Energy Lending Expansion into Enterprise CrossFirst Kansas City Leawood Oklahoma City Value Lending, Relational Bankshares, Inc. Bancshares markets Tribal Nations Lending Initial Public Offering (~$72.5mm in and Relational High at $14.50; Nasdaq Total Assets) Volume Builder Lending listed: CFB 2013 2008 Expansion into Tulsa market Formed through acquisition of Tulsa CrossFirst National Bancshares, Inc. 2016 2018 Bankshares, Inc. (~$160mm in Total Assets) George F. Jones George F. Jones Jr. joins as Vice Jr. named CEO of Chairman as part CrossFirst of expansion into Bankshares, Inc. Dallas market Dollars in chart are in millions. 17
As of or for the Year Ended December 31, (Dollars in thousands, except per share data) 2015 2016 2017 2018 2019 Income Statement Data Interest income $54,116 $69,069 $97,816 $156,880 $216,218 Interest expense 11,849 15,016 22,998 46,512 74,774 Net interest income 42,267 54,053 74,818 110,368 141,444 Provision for loan losses 5,975 6,500 12,000 13,500 13,900 Non-interest income 2,365 3,407 3,679 6,083 8,715 Non-interest expense 30,562 40,587 62,089 85,755 87,648 Income before taxes 8,095 10,373 4,408 17,196 48,611 Income tax expense (benefit) 626 62 (1,441) (2,394) 8,054 Net income 7,469 10,311 5,849 19,590 40,557 Preferred stock dividends 2,066 2,100 2,100 2,100 175 Net income available to common stockholders 5,403 8,211 3,749 17,490 40,382 Non-GAAP core operating income(1) 7,469 10,311 9,716 19,940 39,511 Balance Sheet Data Cash and cash equivalents $79,418 $155,972 $130,820 $216,541 $187,320 Available-for-sale securities 460,542 593,012 703,581 663,678 741,634 Gross loans (net of unearned income) 992,726 1,296,886 1,996,029 3,060,747 3,852,244 Allowance for loan losses (15,526) (20,786) (26,091) (37,826) (40,896) Goodwill and other intangibles 8,100 7,998 7,897 7,796 7,694 Total assets 1,574,346 2,133,106 2,961,118 4,107,215 4,943,011 Non-interest-bearing deposits 123,430 198,088 290,906 484,284 521,826 Total deposits 1,294,812 1,694,301 2,303,364 3,208,097 3,923,759 Borrowings and repurchase agreements 112,430 216,709 357,837 388,391 373,664 Trust preferred securities, net of fair value adj. 792 819 850 884 921 Preferred Stock, liquidation value 30,000 30,000 30,000 30,000 0 Total Stockholders' Equity 160,004 214,837 287,147 490,336 613,422 Tangible Stockholders' Equity(1) 121,904 176,839 249,250 452,540 605,728 Share and Per Share Data: Basic earnings per share $0.29 $0.39 $0.12 $0.48 $0.85 Diluted earnings per share 0.28 0.39 0.12 0.47 0.83 Book value per share 6.61 7.34 8.38 10.21 11.80 Tangible book value per share(1) 6.20 7.02 8.12 10.04 11.66 Wtd. avg. common shares out. - basic 18,640,678 20,820,784 30,086,530 36,422,612 47,679,184 Wtd. avg. common shares out. - diluted 19,378,290 21,305,874 30,963,424 37,492,567 48,480,324 Shares outstanding at end of period 19,661,718 25,194,872 30,686,256 45,074,322 51,969,203 18 Historic share counts and per share figures reflect 2:1 stock split effected on 12/21/18. (1) Represents a non-GAAP financial measure. See Non-GAAP Reconciliation slides in Appendix for additional detail.
As of or for the Year Ended December 31, 2015 2016 2017 2018 2019 Selected Ratios: Return on average assets 0.53% 0.56% 0.24% 0.56% 0.90% Non-GAAP core operating return on average assets(1) 0.53 0.56 0.40 0.57 0.88 Return on average common equity(1) 4.60 5.51 1.53 5.34 7.67 Non-GAAP core operating return on average common equity(1) 4.60 5.51 3.11 5.45 7.48 Yield on earning assets - tax equivalent(2) 4.14 4.08 4.37 4.77 5.04 Yield on securities - tax equivalent(2) 3.72 3.63 3.85 3.62 3.35 Yield on loans 4.62 4.60 4.89 5.34 5.52 Cost of interest-bearing deposits 1.01 0.96 1.12 1.71 2.21 Cost of funds 0.94 0.91 1.06 1.49 1,90 Cost of total deposits 0.91 0.87 0.99 1.44 1.89 Net interest margin - tax equivalent(2) 3.27 3.24 3.40 3.39 3.31 Non-interest expense to average assets 2.17 2.21 2.53 2.45 1.95 Efficiency ratio(3) 68.48 70.64 79.10 73.64 58.37 Non-GAAP core operating efficiency ratio FTE(1)(3) 64.66 66.04 72.33 67.68 57.25 Non-interest-bearing deposits to total deposits 9.53 11.69 12.63 15.10 13.30 Loans to deposits 76.67 76.54 86.66 95.41 98.18 Credit Quality Ratios: Allowance for loans losses to total loans 1.56% 1.60% 1.30% 1.23% 1.06% Nonperforming assets to total assets 0.08 0.20 0.18 0.43 0.97 Nonperforming loans to total loans 0.12 0.33 0.27 0.58 1.15 Allowance for loans losses to nonperforming loans 1,336.38 493.14 481.68 212.30 92.39 Net charge-offs to average loans 0.04 0.11 0.44 0.07 0.31 Capital Ratios: Total stockholders' equity to total assets 10.16% 10.07% 9.70% 11.94% 12.41% Common equity tier 1 capital ratio 8.50 9.78 8.62 11.75 12.19 Tier 1 risk-based capital ratio 10.70 11.38 9.70 12.53 12.21 Total risk-based capital ratio 11.82 12.51 10.65 13.51 13.08 Tier 1 leverage ratio 9.72 10.48 9.71 12.43 12.08 (1) Represents a non-GAAP financial measure. See Non-GAAP Reconciliation slides in Appendix or press release for additional detail. (2) Tax-exempt income is calculated on a tax equivalent basis. Tax-exempt income includes municipal securities, which is exempt from federal taxation. A tax rate of 21% is used for fiscal year 2018 and interim periods and a tax rate of 35% is used for fiscal years 2017 and prior. (3) Efficiency ratio is non-interest expense divided by the sum of net interest income and non-interest income. 19
CrossFirst Bankshares, Inc Quarterly Financials As of or for the Three Months Ended 12/31/18 3/31/19 6/30/19 9/30/19 12/31/19 Income Statement Data Interest income $47,068 $51,317 $54,192 $55,529 $55,180 Interest expense 14,753 17,712 19,318 19,743 18,001 Net interest income 32,315 33,605 34,874 35,786 37,179 Provision for loan losses 4,500 2,850 2,850 4,850 3,350 Non-interest income 1,195 1,645 1,672 3,212 2,186 Non-interest expense 20,166 22,631 21,960 21,172 21,885 Income before taxes 8,844 9,769 11,736 12,976 14,130 Income tax expense (benefit) (1,490) 419 2,297 2,592 2,746 Net income 10,334 9,350 9,439 10,384 11,384 Preferred stock dividends 525 175 0 0 0 Net income available to common stockholders 9,809 9,175 9,439 10,384 11,384 Non-GAAP core operating income(1) 6,600 7,989 9,754 10,384 11,384 Balance Sheet Data Cash and cash equivalents $216,541 $117,317 $141,373 $128,126 $187,320 Securities 663,678 707,430 704,776 733,093 741,634 Gross loans (net of unearned income) 3,060,747 3,277,598 3,467,204 3,629,792 3,852,244 Allowance for loan losses (37,826) (40,001) (42,852) (42,995) (40,896) Goodwill and intangibles 7,796 7,770 7,745 7,720 7,694 Total assets 4,107,215 4,266,369 4,473,182 4,651,313 4,943,011 Non-interest bearing deposits 484,284 488,375 511,837 513,832 521,826 Total deposits 3,208,097 3,399,899 3,584,136 3,658,108 3,923,759 Borrowings and repurchase agreements 388,391 368,597 364,246 357,614 373,664 Trust preferred securities, net of fair value adj. 884 893 902 912 921 Preferred Stock 30,000 0 0 0 0 Stockholders' Equity 490,336 480,514 499,195 602,435 613,422 Tangible Stockholders' Equity(1) 452,540 472,744 491,450 594,715 605,728 Share and Per Share Data: Basic earnings per common share $0.22 $0.20 $0.21 $0.22 $0.22 Dilutive earnings per common share 0.22 0.20 0.20 0.21 0.22 Book value per common share 10.21 10.63 11.00 11.59 11.80 Tangible book value per common share(1) 10.04 10.46 10.83 $11.44 $11.66 Wtd. avg. common shares out. - basic 43,853,170 45,093,442 45,236,264 48,351,553 51,952,712 Wtd. avg. common shares out. - diluted 44,920,448 45,960,267 46,211,780 49,164,549 52,748,312 Shares outstanding at end of period 45,074,322 45,202,370 45,367,641 51,969,203 51,969,203 20 Historic share counts and per share figures reflect 2:1 stock split effected on 12/21/18 (1) Represents a non-GAAP financial measure. See Non-GAAP Reconciliation slides in Appendix for additional detail.
CrossFirst Bankshares, Inc Quarterly Financials As of or for the Three Months Ended 12/31/18 3/31/19 6/30/19 9/30/19 12/31/19 Selected Ratios: - - - Return on average assets(1) 1.06% 0.91% 0.86% 0.89% 0.94% - - - Non-GAAP core operating return on average assets(1)(2) 0.67 0.78 0.89 0.89 0.94 - - - Return on average common equity 9.03 7.98 7.78 7.58 7.45 - - - Yield on earning assets 5.01 5.18 5.12 4.94 4.71 - - - Yield on earning assets - tax equivalent(3) 5.08 5.25 5.18 5.00 4.76 - - - Yield on securities 3.24 3.23 3.08 2.85 2.86 - - - Yield on securities - tax equivalent(3) 3.61 3.59 3.42 3.19 3.22 - - - Yield on loans 5.56 5.75 5.66 5.53 5.21 - - - Costs of interest bearing liabilities 2.01 2.25 2.29 2.24 1.96 - - - Cost of interest-bearing deposits 2.04 2.30 2.33 2.26 1.97 - - - Cost of funds 1.72 1.96 1.99 1.94 1.71 - - - Cost of Deposits 1.70 1.96 1.99 1.94 1.70 - - - Cost of other borrowings 1.79 1.86 1.93 1.95 1.86 - - - Net interest margin - tax equivalent(3) 3.51 3.46 3.35 3.24 3.23 - - - Noninterest expense to average assets 2.06 2.20 2.00 1.82 1.81 - - - Efficiency ratio(4) 60.18 64.20 60.09 54.29 55.60 - - - Non-GAAP core operating efficiency ratio (FTE) (2)(4) 61.41 63.10 58.43 53.43 54.66 - - - Noninterest bearing deposits to total deposits 15.10 14.36 14.28 14.05 13.30 - - - Loans to deposits 95.41 96.40 96.74 99.23 98.18 Credit Quality Ratios: Allowance for loans losses to total loans 1.23% 1.22% 1.24% 1.18% 1.06% Nonperforming assets to total assets 0.43 0.36 1.18 1.00 0.97 Nonperforming loans to total loans 0.58 0.40 1.45 1.22 1.15 Allowance for loans losses to nonperforming loans 212.30 307.27 85.20 97.12 92.39 Net charge-offs to average loans(1) 0.03 0.09 0.00 0.53 0.58 Capital Ratios: - - - Total stockholders' equity to total assets 11.94% 11.26% 11.16% 12.95% 12.41% - - - Common equity tier 1 capital ratio 11.75 11.23 11.02 12.91 12.19 - - - Tier 1 risk-based capital ratio 12.53 11.23 11.04 12.93 12.21 - - - Total risk-based capital ratio 13.51 12.20 12.04 13.90 13.08 - - - Tier 1 leverage ratio 12.43 11.15 10.87 12.57 12.08 (1) Interim periods are annualized (2) Represents a non-GAAP financial measure. See Non-GAAP Reconciliation slides in Appendix for additional detail. 21 (3) Tax-exempt income is calculated on a tax equivalent basis. Tax-exempt income includes municipal securities, which is exempt from federal taxation. A tax rate of 21% is used for 2018 & 2019. (4) Efficiency ratio is non-interest expense divided by the sum of net interest income and non-interest income
As of or for the Year Ended December 31, (Dollars in thousands) 2015 2016 2017 2018 2019 Non-GAAP Core Operating Income: Net Income $7,469 $10,311 $5,849 $19,590 $40,557 Add: restructuring charges 0 0 0 4,733 0 Less: Tax effect(1) 0 0 0 1,381 0 Restructuring charges, net of tax 0 0 0 3,352 0 Add: fixed asset impairments 0 0 1,903 171 424 Less: Tax effect(2) 0 0 737 44 109 Fixed asset impairments, net of tax 0 0 1,166 127 315 Add: State tax credit(3) 0 0 0 (3,129) (1,361) Add: 2017 Tax Cut and Jobs Act(3) 0 0 2,701 0 0 Non-GAAP core operating income $7,469 $10,311 $9,716 $19,940 $39,511 Non-GAAP Core Operating Return on Average Assets: Net Income $7,469 $10,311 $5,849 $19,590 $40,557 Non-GAAP core operating income 7,469 10,311 9,716 19,940 39,511 Average Assets 1,410,447 1,839,563 2,452,797 3,494,655 4,499,763 GAAP return on average assets 0.53% 0.56% 0.24% 0.56% 0.90% Non-GAAP core operating return on average assets 0.53% 0.56% 0.40% 0.57% 0.88% Non-GAAP Core Operating Return on Average Equity: Net Income $7,469 $10,311 $5,849 $19,590 $40,557 Non-GAAP core operating income 7,469 10,311 9,716 19,940 39,511 Less: Preferred stock dividends 2,066 2,100 2,100 2,100 175 Net Income available to common stockholders 5,403 8,211 3,749 17,490 40,382 Non-GAAP core operating income 5,403 8,211 7,616 17,840 39,336 available to common stockholders Average common equity 117,343 149,132 245,193 327,446 526,224 Tangible Assets 8,100 7,998 7,897 7,796 7,694 Average Tangible Equity 109,243 141,134 237,296 319,650 518,530 GAAP return on average common equity 4.60% 5.51% 1.53% 5.34% 7.67% Non-GAAP core return on average tangible common equity 4.95% 5.82% 3.21% 5.58% 7.59% Non-GAAP Core Operating Efficiency Ratio: Non-interest expense $30,562 $40,587 $62,089 $85,755 $87,648 Less: restructuring charges 0 0 0 4,733 0 Non-GAAP non-interest expense (numerator) 30,562 40,587 62,089 81,022 87,648 Net interest income 42,267 54,053 74,818 110,368 141,444 Tax-equivalent interest income 2,637 4,001 5,439 3,099 2,522 Non-interest income 2,365 3,407 3,679 6,083 8,715 Add: fixed asset impairments 0 0 1,903 171 424 Non-GAAP Operating revenue (denominator) 47,269 61,461 85,839 119,721 153,105 GAAP efficiency ratio 68.48% 70.64% 79.10% 73.64% 58.37% Non-GAAP core operating efficiency ratio (FTE) 64.66% 66.04% 72.33% 67.68% 57.25% (1) Represents the tax impact of the adjustments above at a tax rate of 25.73%, plus a permanent tax benefit associated with stock-based grants that were exercised prior to our former CEO’s departure. 22 (2) Represents the tax impact of the adjustments above at a tax rate of 25.73% for fiscal years 2018 and after; 38.73% for fiscal years prior to 2018. (3) No tax effect associated with the 2017 Tax Act adjustment or state tax credit.
As of or for the Three Months Ended (Dollars in thousands) December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Non-GAAP Core Operating Income: Net Income $10,334 $9,350 $9,439 $10,384 $11,384 Add: restructuring charges (815) 0 0 0 0 Less: Tax effect(1) (210) 0 0 0 0 Restructuring charges, net of tax (605) 0 0 0 0 Add: fixed asset impairments 0 0 424 0 0 Less: Tax effect(2) 0 0 109 0 0 Fixed asset impairments, net of tax 0 0 315 0 0 Add: State tax credit(3) (3,129) (1,361) 0 0 0 Add: 2017 Tax Cut and Jobs Act 0 0 Non-GAAP core operating income $6,600 $7,989 $9,754 $10,384 $11,384 Non-GAAP Core Operating Return on Average Assets: Net Income $10,334 $9,350 $9,439 $10,384 $11,384 Non-GAAP core operating income 6,600 7,989 9,754 10,384 11,384 Average Assets 3,884,642 4,168,243 4,402,002 4,610,958 4,809,576 GAAP return on average assets(4) 1.06% 0.91% 0.86% 0.89% 0.94% Non-GAAP core operating return on average assets(4) 0.67% 0.78% 0.89% 0.89% 0.94% Non-GAAP Core Operating Efficiency Ratio: Non-interest expense $20,166 $22,631 $21,960 $21,172 $21,885 Less: restructuring charges (815) 0 0 0 0 Non-GAAP non-interest expense (numerator) 20,981 22,631 21,960 21,172 21,885 Net interest income 32,315 33,605 34,874 35,786 37,179 Tax-equivalent interest income 658 616 612 624 670 Non-interest income 1,195 1,645 1,672 3,212 2,186 Add: fixed asset impairments 0 0 424 0 0 Non-GAAP operating revenue (denominator) 34,168 35,866 37,582 39,622 40,035 GAAP efficiency ratio 60.18% 64.20% 60.09% 54.29% 55.60% Non-GAAP core operating efficiency ratio (FTE) 61.41% 63.10% 58.43% 53.43% 54.66% (1) Represents the tax impact of the adjustments above at a tax rate of 25.73%, plus a permanent tax benefit associated with stock-based grants that were exercised prior to our former CEO’s departure. (2) Represents the tax impact of the adjustments above at a tax rate of 25.73%. (3) No tax effect associated with the state tax credit. (4) Interim periods are annualized. 23
As of or for the Year Ended December 31, (Dollars in thousands, except per share data) 2015 2016 2017 2018 2019 Tangible Stockholders' Equity: Stockholders' equity $160,004 $214,837 $287,147 $490,336 $613,422 Less: goodwill and intangible assets 8,100 7,998 7,897 7,796 7,694 Less: preferred stock 30,000 30,000 30,000 30,000 0 Tangible Stockholders' Equity $121,904 $176,839 $249,250 $452,540 $605,728 Shares outstanding at end of period 19,661,718 25,194,872 30,686,256 45,074,322 51,969,203 Book value per common share $6.61 $7.34 $8.38 $10.21 $11.80 Tangible book value per common share $6.20 $7.02 $8.12 $10.04 $11.66 As of or for the Three Months Ended (Dollars in thousands, except per share data) 12/31/18 3/31/19 6/30/19 9/30/19 12/31/19 Tangible Stockholders' Equity: Stockholders' equity $490,336 $480,514 $499,195 $602,435 $613,422 Less: goodwill and intangible assets 7,796 7,770 7,745 7,720 7,694 Less: preferred stock 30,000 0 0 0 0 Tangible Stockholders' Equity $452,540 $472,744 $491,450 $594,715 $605,728 Shares outstanding at end of period 45,074,322 45,202,370 45,367,641 51,969,203 51,969,203 Book value per common share $10.21 $10.63 $11.00 $11.59 $11.80 Tangible book value per common share $10.04 $10.46 $10.83 $11.44 $11.66 24