UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
(Address of Principal Executive Offices)
(Zip Code)
(
)
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):
☐
☐
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))
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
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 7.01.
Regulation FD Disclosure.
The Company is posting an investor presentation to its website at investors.crossfirstbankshares.com. The Company may use the investor
presentation from time to time in conversations with investors, analysts, and others. The Company is furnishing the information contained
in Exhibit 99.1 pursuant to Regulation FD. Such information is furnished pursuant to Item 7.01, including Exhibit 99.1 hereto, and shall
not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise
subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933
or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits
99.1
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:
November 1, 2021
CROSSFIRST BANKSHARES, INC.
By:
/s/ Benjamin R. Clouse
Benjamin R. Clouse
Chief Financial Officer
CROSSFRISTBANKSHARES, INC.TM
B of A Securities 2021
Banking & FinancialsConference
November 10, 2021Mike Maddox, President & CEOBen Clouse, CFORandy Rapp, CCO & CROHeather Worley, Director of IR
Legal disclaimer
FORWARDLOOKING STATEMENTS.
The financial results in this presentation reflect preliminary, unaudited results, which are not final until the Company’s Qu
arterly Report on Form 10
Q is filed.
This presentation and oral statements made during this meeting contain forward
oking 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," "estima
te," "intend," "plan," "strive," "projection," "goal," "target," "outlook," "aim," "would," "annualized" and "outlook," or th
e nega
tive 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 indus
try, manageme
nt’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 expect
ations 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 thos
e indicated in these forward
looking statements, including, but not
limited to, the following: risks relating to the COVID
19 pandemic; risks related to general business and economic conditions and any regulatory responses to such conditions; our a
bility to effectively execute our gro
wth strategy and manage our growth, inc
luding identifying and consummating suitable mergers and acquisitions; the geographic concentration of our markets; fluctuati
on 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 att
ract, hire and retain qualified management perso
nnel; interest rate fluctuations; our a
bility 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
cont
rol 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 infor
mation
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 o
r ter
rorism; 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 ma
tters; 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 forwardlooking statement, whether as a result of new information, future developments or otherwise, except as required by law.
NONGAAP FINANCIAL INFORMATION.
This presentation contains certain nonGAAP measures. These nonGAAP measures, as calculated by CrossFirst, are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these nonGAAP 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 reconciliations of certain nonGAAP measures included at the end of this presentation.
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 currentlyavailable to us. Although we are not aware of any misstatements regarding the
economic, employment, industry and other market datapresented herein, these estimates involve inherent risks and uncertainties and are based on assumptions that are subject to change.
CROSSFIRSTBANK
Mike Maddox President, CEO and Director
Joined CrossFirst in 2008 after serving as Kansas City regional president for Intrust BankPracticing lawyer for more than six years before joining Intrust BankAppointed to CEO June 1, 2020 after 12 years of serviceB.S. Business, University of Kansas; J.D. Law, University of Kansas; Graduate School of Banking at the University of Wisconsin Madison
Ben Clouse Chief Financial Officer
Randy Rapp Chief Risk Officer and Chief Credit Officer
More than 33 years of commercial banking experience in Texas in various credit, production, risk and executive roles.Joined CrossFirst in March 2019 after a 19year career at Texas Capital Bank (NASDAQ:TCBI) serving as Executive Vice President and Chief Credit Officer from May 2015 until March 2019.B.B.A. Accounting, The University of Texas at Austin and M.B.A. Finance, Texas Christian UniversityObtained CPA designation
Heather Worley Director of Investor Relations
More than 15 years of experience in marketing, communications and investor relations in banking and financeJoined CrossFirst in September 2021. Previously, SVP & Director of IR for Texas Capital Bancshares, Inc. (NASDAQ:
TCBI)Recognized by
Institutional Investor
magazine AllAmerica Executive Team 2017 | Top Investor Relations Professional & All-America Executive Team 2019 | Top Investor Relations ProgramB.A. Communications, Mississippi State University
Other Senior ExecutivesSteve Peterson
Chief Banking Officerof CrossFirst Bank21+ years of banking experienceJoined CrossFirst in 2011
Amy Fauss
Chief Operating &Chief Human Relations Officer of CrossFirst Bank28+ years of banking experienceJoined CrossFirst in 2009
Jana Merfen
Chief Technology Officerof CrossFirst Bank12+ years of technology experienceJoined CrossFirst in 2021
Our Road to Success
rdLargest Bank Headquartered
in Kansas City MSA
ONE TEAM
Focusing on:Elevating our Strong Corporate Culture by Living our CrossFirst ValuesAttracting and Retaining High Performing TalentWellbeing of our Employees
ONE BANK
SHARED VISION
Focusing on:Performance & ProfitabilitySeizing Growth Opportunities Strong Credit Quality Enhancing Products and ServicesManaging Enterprise RiskContributing to our Communities PHOENIX, AZLEAWOOD, KSKANSAS CITY, MOTULSA, OKOKLAHOMA CITY, OK FRIESCO, TXDALLAS, TX
TotalAssets$5.4 billionGrossLoans$4.2 billionTotalDeposits$4.4 billionBook Value/Share$12.79
Total Assets
($ millions)
5,659*
$4,931
Compound Annual Growth Rates Since Since 2007 Total ATmfi 2012
$4,107
$2,961
$2,133
$22
$77
$155
$311
$355
$565
$847
$1,220
$1,574
$5,401
1 2007 2008 2009 2010 2011 1 2012 2013 1 « 2014 2015 2016 2017 2018 2019 2020 Q3 2021 >
o K<
2007
Established with initial presence in Kansas Crty
2010
Acquired Leawood.
KS
based
Leawood Bancs hares
S725mm in Total
Assets)
2012
Expansion into
Wichita and
Oklahoma City
markets
2016
George F. Jones Jr.
joins as Vice
Chairman to expand
into Dallas market
2008
Formed
CrossFirst
Bankshares.
ne
2013
Expansion into Tulsa market
through acquisition of Tulsa
National Bancshares. Inc.
(~$160mm in
Total Assets)
2019
CrossFirst
Bankshares, Ine
Initial Public
Offering at $14S0;
Nasdaq listed: CFB
2018
George F. Jones
Jr. named CEO of
CrossFirst
Bankshares. Inc.
2021
Ben Clouse named
CFO of CrossFirst
Bankshares. Ine
and expansion into
Phoenix market
020
Mike Maddox named
CEO of CrossFirst
Bankshares. Inc. and
expansion into Frisco
market
PPP loan balances totaled $292 million at 12/33/20 and $109 million of PPP at Q3 21
In response to the PPP forgiveness’, the Bank made some strategic balance sheet re
ductions to reduce liquidity
2020 Impact Report
CROSSFIRST BANK
We are committed to our employees, clients, and communities, which is why we created our first ever Impact Report to show our
commitment to being a force for good in our
communities.
Highlights the meaningful difference we are making in the lives of our employees, our clients and in our communities
Benchmark of where we are today and a baseline to measure our continued success in the future
COMMUNITY
IMPACT
We build strong
relationships within our communities and support the passions of our employees.
Supported over 100 organizations in 2020 with donations and sponsorships
Employees donated $25,000, which was matched by CrossFirst for a total philanthropic investment of
$50,000 in the communities where we live and work through our Generous Giving program
DIVERSITY, EQUITY
AND INCLUSION
We believe that an equitable and inclusive environment with diverse teams supports our core values.
IDEA (Inclusion, Diversity, Equity,
and Accountability) Champions enhance an inclusive culture through company events and
participation in our recruitment efforts
In 2020, we employed 328 individuals across a diverse representation of 58% female, 42% male and 13% of whom are ethnically d
i
verse
BEST
IN
CLASS
CULTURE
We embrace and encourage our employees’ strengths and talents to deliver on our extraordinary service promise.
Long partnered with the GALLUP® organization in the administration of its CliftonStrengths® assessment for each emp
loyee and Q12 Survey to measure employee engagement
Maintained a consistent employee engagement score in 2020
EXPANDING OUR FOOTPRINT
AREA OF FOCUSContinue to execute our organic growth strategy in existing marketsFocus on new expansion in target markets where we currently have client businessEvaluate expansion strategies in key target markets:De Novo Expansion:Hire experienced talent to expand in key growth marketsStrategic Acquisition:Provides operational scale and synergiesAdds new lines of businessAdds fee income opportunities
POTENTIAL TARGET MARKETS
Fort Worth, TexasAustin, TexasDenver, ColoradoOmaha, NebraskaHouston, TexasSan Antonio, TexasNashville, Tennessee
Earnings Growth
CROSSFR
IST BANK
Net Income
8.0
$15.6
$12.0
$21.0
Q3 2020
Q4 2020
Ql2021
Q2 2021
Q3 2021
Diluted EPS
$0.41
Q3 2020
Q4 2020
Ql 2021
Q2 2021
Q3 2021
Consistently growing net income and earnings per share
Q3 2021 $6.2 million unrealized loss on an equity
security
Q3 2021 $10 million release from reserves reverses the majority of the 2021 provisioning due to improved credit quality, econ
omic recovery in the markets we serve, and relatively static loan balance
As of June 30, 2021, the Company had provisioned
$11 million for loan losses YTD
NetIncome
$21.0M
ROAA
1.54%
NIM
(FTE)
3.20%
Diluted
EPS
$0.41
ROE
12.92%
^ m III/ 2% Deposit growth QoQ 17% DDA Deposit growth QoQ
~ 2%21 TBV/ Share growth QoQ Balance Sheet Update 2% Non
GAAP Loan growth QoQ Credit 0.92% 0.13% 1.56%11121 Klnn
CAAD 17% Performance NPAs / NCOs/ INvJI 1 vjMMK DpcprvPS / Classified Loans/ Asset Avg Loans Loans Capital + ALLL Capital & 1
2.61% 13.88% 95%
19% Liquidity CET 1 Capital Total Risk
Based Loans/ Cash and Securities/ Ratio Capital Deposits Assets
Efficiency
59.1%
Q3 2021
GAAP
Efficiency Ratio
50.5%
Q3 2021
Non
GAAP
Efficiency Ratio
1.76%
Non
Interest Expense/
Avg Assets
$15.3M
Assets /
Employee
ote: Interim periods are
annuäöed
Cross leans net of unearned
ircorre;
excludes PPP Cans
Represents a non
CAAP financ'd measjjre. See N^vGAAPRecoKiliation
slides at the end this presentation fer additional detail.
Q3 2021 and YTD 2021 Highlights and Summary
CROSSFIRST
BANK
Strong net income during Q3 2021 of $21 million and YTD net income of $48.6 million
Net interest margin fully tax
equivalent (FTE) of 3.20% compared to 3.12% in Q2 2021
Continued improvement in YTD efficiency ratio
8.2% (annualized) growth in total loans, ex PPP,‘during Q3 2021
17% demand deposits growth from June 30, 2021 which now account for 22% of total deposits
1.7 billion in unfunded loan commitments as of September 30, 2021
$30 million share repurchase authorization Focus on hiring and recruiting experienced revenue generators Continue strong earn
ings momentum Enhance digital products to better serve our client
s Grow lending verticals
Financial
Performance
Balance Sheet
Strategic
Initiatives
10
* Represents a
cn
G*AP fnanc'al treasure, see Non
GAAP
eccrc iatioo slides at the end c
I
the pesentation fee rrore derail
OPERATING REVENUE GROWTHCROSSFIRST BANK
Operating Revenue*
*
$172.0
2017
2018
2019
2020
YTD2020 YTD 2020 YTD 2021 YTD 2021
Non
GAAP
Non
GAAP
Net interest income Non
interest
Income
Non
GAAP
Non
GAAP
Net
Interest income '
Non
Interest Income '
Historically, our balance sheet
growth combined with a relatively stable net interest margin has enabled robust operating revenue growth
2017
2021 Q3 YTD non
interest income CAGR of 33% as we execute on our plan to increase fee income
Q3 2021 Non
Interest Income was impacted by a $6.2
million impairment of an investment in a business acquired as part of a loan restructuring
Operating Revenue1'1
Q3 2021
QoQ
YOY
FY 2020
YOY
2017
2020
C AC R
Net Interest Income
1% A 6%
A 13%
29%
Non
GAAP Non
-
Interest Income
A 28% A 25%
Non
CAAP Total Revenue
A 1%
A 8%
Operating Revenue1'1
03 2021
FY 2020
2017
2020
QOQ
YOY
YOY
CAGR
Non
Interest Income
119%
127%
A 35%
A 47%
Total Revenue
T
-
15%
%
A 15%
30%
Mole; Dollars
are in millions.
[1) Defined as Net Interest Income plus
Non
Interest income
|2) Represents a non
CAAP
financial measure.SeeM»vGAAPReccrciliaüonslidesattheendc<thispresentationfcraddioonáde!ail.
11
Net Interest MarginCROSSFIRST BANKYield on Loans & Cost of Deposits2017201820192020Q3 2020Q3 2021Yield on loans Cost of Total Deposits Net Interest Margin Fully Tax Equivalent (FTE) 3.40% 3.39% 3.31%3.12% 3.00% 3.12% 3.20% 20172018 2019 2020Q42020Q12021 Q2 2021 Q3 2021Fully taxequivalent net interest margin increased 8bps to 3.20% from Q2 2021, primarily due to improved cost of fundsReduced time deposits and wholesale fundingIncreased noninterestbearing depositsLoan yield increased 1bps compared to Q2 2021 due to a decrease in PPP loan balance and nonaccrual changes offsetting lower loan feesLoan to deposit ratio decreased to 95% from 97% in Q2 2021 and decreased from 100% in Q3 202012
Growth and expense management CROSSFIRST BANKQ3 YTD '20 -Q3 YTD ‘21NonInterest ExpenseDetails$76.2$14.7$7.4 $4.8$6.3$430$72.7$15.6 $5.2$7.3$44.6YTD 2020YTD 2021OtherGoodwill Impairment TechnologyOccupancySalaries & BenefitsAssets and NonInterest Expenses2.53% 2.45% 1.95% 1.84%$2,961 $4,107 $4,931 $5,6592017 2018 2019 2020Total Assets Noninterest expense / Average AssetsNote: Dollars are in millions and amounts shown are as of the end of the period unless otherwise specified.* Includes $7.4 million goodwill impairment
Improving Efficiencywhile Growing AssetsCROSSFIRST BANK79.1%74.0%73.6% 67.8%58.4%57.4%58.1%53.0%54.2% 51.2%$2,961$4,107$4,931$5,659$5,4012017201820192020YTD 2021Total AssetsEfficiency RationNonGAAP Efficiency RatioNote: Dollars are in millions and amounts shown are as of the end of the period unless otherwise specified. * Represents a non-GAAP financial measure. See NonGAAP Reconciliation slides at the end of this presentation for additional detail. 14
Diverse loan portfolioCROSSFIRST BANK
Loan Mix by Type ($4.2bn)(1)
Owner Occupied Real Estate8%SBA PPP3%Energy 7%Commercial Real Estate 41%Residential Real Estate9%Other1% Commercial & Industrial31%
Commercial and Industrial Loan Breakdownby Type ($1.3bn)
Engineering & Contracting7%Restaurants 4%Financial Management 4% Aircraft & Transportation 5%Merchant Wholesalers4%18 Other Industries35%Manufacturing 12% Real Estate Activity4%Business Loans to Individuals8%Recreation 5% Health Care7% Administrative Services5%
CRE Loan Portfolio by Segment ($1.7bn)(1)
Retail 12%Office15%Industrial9% 4 Family Res Construction8%Hotel 11%Senior Living7%Other 18%MultiFamily20%
CRE Loans by Geography ($1.7bn)(1)
TX37% OK13% KS10%MO8%CO4%NC4%FL4%AZ2%Remaining States 18%Note: Data as of September 30, 2021.CRE as defined by regulators (including construction and development).15
Asset Quality Performance
CROSSFIRST BANK
Nonperforming Assets / Assets
1.6%
1.4%
1.2%
1.0%
%
0.4%
0.2%
%
0.18%
0.43%
0.97%
1.39%
1.15%
1.09%
0.92%
2017
2018
2019
2020
Q12021
Q22021
Q32021
NPAs continue to improve as economic and business outlooks improve
Reduction in NPAs mostly related to upgrades in commercial and industrial loans adversely effected by the pandemic
51% of the nonperforming asset balance in Q3 2021
relates to energy credits
OREO balances reduced to $1.1 million
Classified Loans / (Total Capital + ALLL)
$350 $300
$250
$200
$150
$100
$50
$299.9
$286.1
$268.9
$170.7
$124.1
43.2%
40.9%
38.2%
24.0%
17.3%
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 202
Classified loans continue to trend down due primarily to higher energy prices, improvements in customers’ businesses, and imp
roved economic conditions
37% of classifieds in Q3 2021 relate to Energy, down from 43% in Q2 2021 and 46% in Q3 2020
Energy classifieds decreased 37% during the quarter and 67% from Q3 2020
Classified Loans
Ratio
Note: Dollar amounts are in millions.
16
Asset Quality PerformanceCROSSFRIST BANK
Net ChargeOffs / Average Loans(1)
12%1.0%0.8%0.6%0.4%0.2%0.0%0.44% 0.07%0.31%0.89%1.03% 0.13%0.74%0.23%0.13%201720182019 2020Q42020Q12021 Q2 2021 Q3 2021ALLLALLL/LoansPrudently reduced ALLL/Total Loans to 1.51%, or 1.56% excluding PPP loans(2), at end of Q3 2021 by releasing $10 million in reserves $3.5 million of provisions were added to the reserves in Q2 2021$7.5 million of provisions were added to the reserves in Q1 2021Note: Dollar amounts are in millions.Ratio is annualized for interim periods.Represents a nonGAAP financial measure. See NonGAAP Reconciliation slides at the end of this presentation for additional detail. 17
Note: Dollar amounts are in millions.
Ratio is annualized for interim periods.
Represents a non
AAP financial measure. See Non
GAAP Reconciliation slides at the end of this presentation for additional detail.
Return of accumulated capital and earnings to shareholders
Facilitated by consistency in core earnings
Anticipate enhanced earnings per share w
ith little tangible book value dilution and a short earnback period
Expect improved ROE by deploying accumulated capital
BALANCE SHEET
EFFECTS AS OF 9/30/21
capital Ratios
CROSSFRIST
ANKC
16%
14%
12%
10%
8%
6%
4%
2%
0%
11.95%
11.97%
13.23%
11.93%
11.94%
13.20%
12.00%
12.02%
13.27%
12.40%
12.42%
13.67%
12.61%
12.63%
13.88%
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Common Equity Tier 1
Tier 1Risk Based
Total Risk Based Capital
Maintaining strong capital levels to support future growth
Anticipate remaining well capitalized while utilizing capital for the new share buyback program
Execution of our profitable growth strategy further strengthening capital ratios
20
Balance Sheet
Growth
CROSSFRIST
BANK
$1,996
$2,303
$3,061
$3,208
$3,852
$3,924
$4,442
$4,695
$4,233
$4,437
2017
2018
2019
2020
2021
Cross loans net of unearned fees
Total deposits
Balance Sheet
Q3 2021
QoQ
YoY
FY 2020
YoY
2017
2020
CAGR
Cross Loans
Cross Loans ex
PPP *
0%
Y
5%
A 2%
0%
A 15%
A 3r%
T
7%
A 24%
Total Deposits
A 2%
Y
1%
A 20%
A 27%
Total Assets
A 2%
2%
A 15%
A 24%
Annualized loan growth of 8% during Q3 2021, excluding the impact of PPP
$88 million in PPP loans were forgiven in Q3 2021
Deposit growt
h of 7% annualized during Q3 2021
Includes 17% QoQ increase in non
interest
bearing deposits
Note: Dollars are in millions.
* Represents a non
GAAP financial measure. See Non
GAAP Reconciliation slides at the end of this presentation for
additional detail.
21
Deposit Mix by Type
$4,493$1,141$2,090$508 $754Q3 2020 $4,695 $1,044 $2,155 $778$718Q4 2020$5,052$932 $2,484 $841 $795 Q1 2021 $4,375 $804 $275$659 $819 Q2 2021 $4,437 $701 $2,103 $672$961Q3 2021Cost of Deposits0.67% 0.58%0.48%0.41%0.38%Noninterest bearing deposits Transaction DepositsSavings & MMATime DepositsDemand deposits increased+27% compared to Q3 2020+17% compared to Q2 2021Improved the cost of depositsby increasing DDA and lowering time deposit and money market accountsDeposit costs have trended down due to the persistent lowrate environment and management’s balance sheet strategy
Focus on Core Funding
17%9%Q3 202014% 6%Q4 2020 8%2%Q1 20218%2%Q2 20217%2%Q32021
Q3 2021 Deposit Composition
Transaction Deposits15% DDA22% Time Deposits16% Note: Dollars are in millions and amounts shown are as of the end of the period. * As a percentage of Bank assets
PPP Loan SummaryCROSSFRISTBANK
PPP Timeline
$369Q3 2020 End($77)Q4 2020 Forgiven $292 Q4 2020 End($67)Q1 2021 Forgiven$336$111$225Q1 2021 End($161)Q2 2021 Forgiven$197$129$68Q2 2021 End ($88)Q3 2021 Forgiven$109$96$13 Q3 2021 End2020 PPP LonasLoan Forgiveness2021 PPP LoansWeighted average rate of approximately 5.5%, in Q3 2021$3.0 million in anticipated fees remain from Rounds 1 and 2Round 1 (2020 programs) were 2year programs while Round 2 (2021 program) is a 5year program$9.9Q2 2020$3.2Q3 2020$2.6Q4 2020 $2.4Q1 2021$3.7$2.2Q1 2021$2.1Q2 2021$4.2$0.5Q2 2021$1.7 Q3 2021 $3.0Q3 2021
Fee Recognition Breakdown
Investment Portfolio Breakout as of September 30, 2021
Municipal Taxable1.2%Municipal TaxExempt76.2%CMO (Fixed) 3.2%Other, 0.6%MBS (Fixed)18.8%
Total: ~$708 million*
Continue to exercise caution in the investment portfolio and maintain highquality investment securitiesAt the end of Q3 2021, the portfolio’s duration was approximately 5.1 yearsThe fully taxable equivalent yield for Q3 2021 fell 6bps to 2.87%During Q3 2021, $18 million of MBS/CMO paydowns were received and no securities were sold During Q3 2021, $14 million of TaxExempt Municipal bonds were sold with a realized gain of $1 millionThe securities portfolio has unrealized gains of approximately $26 million as of September 30, 2021
Securities Yield Fully Tax Equivalent
3.85%
2.79%
2017
3.62%
2.13%
2018
3.35%
1.45%
2019
3.05%
2.13%
2020
2.93%
2.18%
Q3 2020
.96%
2.31%
Q4 2020
2.89%
2.33%
Q1 2021
2.93%
2.44%
Q2 2021
2.87%
2.41%
Q3 2021
Securities Yield
Cost of Funds Spread
Securities Yield
* Based on approximate fair value.
Portfolio Composition
Collateral base is predominately comprised of properties with sufficient production history to establish reliable production
trends
Typically, only lend as a senior secured lender in single bank transactions and as a cash flow lender
Exploration & Producti
on lending only on proven and producing reserves
CrossFirst typically does not lend to shale, oil field services, or midstream energy companies.
Have decreased number of energy loans by 9 to 49, or 16%, since Q2 2020
Energy by Composition 9/30/2021
Loa
Loan
Amoun
Total
Avg % Hedged*1)
Hedge
Priced
oil
35
$175
59%
38%
$47.60
Natural
Gas
13
$121
41%
49%
$2.62
Other
Sources
$0
0%
0%
Total
49
$296
10O%
40% 0)
Energy Portfolio andTangible Equity(3)
98% 79%69%55%45%$243$2492017$358$4532018$409$5942019$345$6242020 $296$652Q3 2021$399$15$13$371Q1 2020$390 $108$72$210Q2 2020$384$138 $59$187Q3 2020$345$109$90$146 Q4 2020$343$119$82$142 Q1 2021 $326 $73$102$151Q2 2021$296$46$116$134Q3 2021Note: Data as of 9/30/21.Note: Loan dollars in millions;Weighted Average. Hedged rolling 12 month; Oil price in $ per barrel and natural gas price in $ per MMBtu.Represents a nonGAAP financial measure, see nonGAAP reconciliation slides in the supplemental information for more detail.25
Quarterly selected financials
CROSSFIRST
BANK
(Dollars in thousands, except per share data) CrossFirst Bankshares, Inc. Quarterly Financials For the Three Months Ended 9/3
0/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 Income Stat
ement Data: Interest income $ 47,311 $ 48,484 $ 48,153 $ 49,534 $ 48,452 Interest expense 5,510 6,156 7,036 7,997 9,125 Net i
nterest income 41,801 42,328 41,117 41,537 39,327 Provision for loan losses
10,000 3,500 7,500 10,875 10,875 Non
interest income
1,105 5,825 4,144 2,949 4,063 Non
interest expense 24,036 25,813 22,818 23,732 23,011 Net income before taxes 26,660 18,840 14,943 9,879 9,504 Income tax expen
se 5,660 3,263 2,908 1,785 1,498 Net income 21,000 15,577 12,035 8,094 8,006 Non
GAAP core operat
ing income(1) $ 25,898 $ 14,245 $ 12,035 $ 8,094 $ 8,006 Balance Sheet Data: Cash and cash equivalents $ 316,722 $ 220,814 $
630,787 $ 408,810 $ 223,636 Securities 708,106 712,217 685,454 654,588 649,901 Gross loans (net of unearned income) 4,233,117
4,237
,944 4,508,600 4,441,897 4,477,809 Allowance for loan losses 64,152 75,493 74,551 75,295 76,035 Goodwill and intangibles 149
169 188 208 227 Total assets 5,401,151 5,311,434 5,998,074 5,659,303 5,505,696 Non
interest
bearing deposits 960,999 818,887 794,55
9 718,459 754,172 Total deposits 4,436,597 4,356,627 5,051,570 4,694,740 4,492,549 Borrowings and repurchase agreements 276,6
00 283,100 286,394 295,406 349,631 Trust preferred securities, net of fair value adjustments 997 986 974 963 952 Stockholders
' Equi
ty 652,407 637,190 628,834 624,428 617,883 Tangible common stockholders' equity(1) $ 652,257 $ 637,021 $ 628,646 $ 624,220 $
617,656 Share and Per Share Data: Basic earnings per common share $ 0.41 $
0.3 $ 0.23 $ 0.16 $ 0.15 Diluted earning per common share 0.41 0.3 0.23 0.15 0.15 Book value per share 12.79 12.5 12.17 12.08 11.84 Tangible book value per share(1) $ 12.79 $ 12.5 $12.16 $ 12.08 $ 11.83 Basic weighted average common shares outstanding 50,990,113 51,466,885 51,657,204 51,970,116 52,136,286 Diluted weighted average common shares outstanding 51,605,721 52,209,541 52,381,474 52,463,645 52,560,126 Shares outstanding at end of period 51,002,698 50,958,680 51,678,669 51,679,516 52,195,778 Represents a nonGAAP financial measure. See NonGAAP Reconciliation slides at the end of this presentation for additional detail.26
Quarterly selected financialsCROSSFIRSTBANKCrossFirst Bankshares, Inc. Quarterly Financials For the Three Months Ended 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 SelectedRatios: Return on average assets(1) 1.54 % 1.1 % 0.84 % 0.58 % 0.58 % NonGAAP core operating return on average assets(1)(2) 1.9 1.01 0.84 0.58 0.58 Return on average common equity 12.92 9.86 7.8 5.19 5.19 Yield on earning assets 3.56 3.51 3.45 3.67 3.61 Yield on earning assets tax equivalent(3) 3.62 3.57 3.5 3.71 3.66 Yield on securities 2.46 2.52 2.48 2.56 2.55 Yield on securities tax equivalent(3) 2.87 2.93 2.89 2.96 2.93 Yield on loans 4 3.99 3.94 4 3.9 Cost of funds 0.46 0.49 0.56 0.65 0.75 Cost of interestbearing liabilities 0.57 0.59 0.65 0.77 0.88 Cost of interestbearing deposits 0.47 0.5 0.57 0.69 0.8 Cost of deposits 0.38 0.41 0.48 0.58 0.67 Cost of other borrowings 1.82 1.79 1.79 1.78 1.5 Net interest margin tax equivalent(3) 3.2 3.12 3 3.12 2.98 Noninterest expense to average assets 1.76 1.82 1.6 1.71 1.67 Efficiency ratio(4) 59.06 53.61 50.41 53.35 53.03 NonGAAP core operating efficiency ratio (FTE)(2)(4) 50.45 53.34 49.64 52.54 52.23 noninterestbearing deposits to total deposits 21.66 18.8 15.73 15.3 16.79 Loans to deposits 95.41 % 97.28 % 89.25 % 94.61 % 99.67 % Credit Quality Ratios: Allowance for loanslosses to total loans 1.51 % 1.78 % 1.65 % 1.7 % 1.7 % Nonperforming assets to total assets 0.92 1.09 1.15 1.39 1.49 Nonperforming loans to total loans 1.15 1.33 1.48 1.71 1.78 Allowance for loans losses to nonperforming loans 131.76 133.79 112.1 98.98 95.18 Net chargeoffs (recoveries) to average loans(1) 0.13 % 0.23 % 0.74 % 1.03 % 0.54 % Capital Ratios: Total stockholders' equity to total assets 12.08 % 12 % 10.48 % 11.03 % 11.22
% Common equity tier 1 capital ratio 12.61 12.4 12 11.93 11.95 Tier 1 risk
based capital ratio 12.63 12.42 12.02 11.94 11.97 Total risk
based capital ratio 13.88 13.67 13.27 13.2 13.23 Tier 1 leverage rati
o 11.77 % 10.81 % 10.51 % 10.93 % 10.85 %
(1) Inter
im periods are annualized.
(2) Represents a non
GAAP financial measure. See Non
GAAP Reconciliation slides at the end of this presentation for additional detail.
(3) Tax
exempt income is calculated on a ta
equivalent basis. Tax
exempt income includes municipal securities, which is exempt from federal taxation. A tax rate of 21% is used.
(4) Efficiency ratio is non
-
interest expense divided by the sum of net interest income and non
interest income; non
GAAP
core operating efficiency ratio (FTE) is adjusted f
or non
core or non
recurring items
$ 22,818 $ 23,732 $ 23,011 Less: Accelerated employee benefits
719
Non
GAAP non
interest expense (numerator) $ 24,036 $ 25,094 $
22,818 $ 23,732 $ 23,011 Net interest income 41,801 42,328 41,117 41,537 39,327 Tax equivalent interest income(4) 748 7
34 704 683 669 Non
interest income
1,105 5,825 4,144 2,949 4,063 Add: Unrealized loss on equity security 6,200
-
Less: BOLI settle
ment benefits
1,841
Non
-
GAAP operating revenue (denominator) $ 47,644 $ 47,046 $ 45,965 $ 45,169 $ 44,059 GAAP Efficiency Ratio 59.06 % 53.61 % 50.41
% 53.35 % 53.03 % Non
GAAP core operating efficiency ratio (FTE) 50.45 % 53.34 % 49.64 % 52.54 % 5
2.23 %
No tax effect.
Represents the tax impact of the adjustments at a tax rate of 21.0%.
Represents the tax impact of
the adjustments above at a tax rate of 21.0%, plus a permanent tax benefit associated with stock
based grants.
Tax exempt income (tax
fr
ee municipal securities) is calculated on a tax equivalent basis. The incremental tax rate used is 21.0%.
28
$ 22,818 $ 23,732 $ 23,011 Less: Accelerated employee benefits
719
Non
GAAP non
interest expense (numerator) $ 24,036 $ 25,094 $ 22,818 $ 23,732 $ 23,011 Net interest income 41,801 42,328 41,117 41,537 39,
327 Tax equivalent interest
income(4) 748 7
34 704 683 669 Non
interest income
1,105 5,825 4,144 2,949 4,063 Add: Unrealized loss on equity security 6,200
-
Less: BOLI settlement benefits
1,841
Non
-
GAAP operating revenue (denominator) $ 47,644 $ 47,046 $ 45,965 $ 45,16
9 $ 44,059 GAAP Efficiency Ratio 59.06 % 53.61 % 50.41 % 53.35 % 53.03 % Non
GAAP core operating efficiency ratio (FTE) 50.45 % 53.34 % 49.64 % 52.54 % 52.23 %
No tax effect.
Represents the tax impact of the adjustments at a tax rate of 21.0%.
Represents t
he tax impact of
the adjustments above at a tax rate of 21.0%, plus a permanent tax benefit associated with stock
based grants.
Tax exempt income (tax
free municipal securities) is calculated on a tax equivalent basis. The incremental tax rate used is 21.0
%.
28
Non
gaap reconciliations (Cont.)
CROSSFIRST
BANK
For the Three Months Ended (Dollars in thousands, except per share data) 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 T
angible common stockholders' equity: Stockholders' equity $ 652,407 $ 63
7,190 $ 628,834 $ 624,428 $ 617,883 Less: goodwill and other intangible assets 149 169 188 208 227 Tangible Stockholders' Equ
ity $ 652,258 $ 637,021 $ 628,646 $ 624,220 $ 617,656 Shares outstanding at end of period 51,002,698 50,958,680 51,678,669 51
,679,5
16 52,195,778 Book value per share $ 12.79 $ 12.5 $ 12.17 $ 12.08 $ 11.84 Tangible book value per share $ 12.79 $ 12.5 $ 12.1
6 $ 12.08 $ 11.83 For the Three Months Ended 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 Gross loans, net of unearned
income
S 4.233.117 S 4.237.944 S 4.508.600 S 4.441.897 S 4,477.81 Less: PPP loans, net of unearned income 109.465 197.084 336,355 29
2,230 369.26 Non
PPP gross loans, net of unearned income s 4,123,652 s 4,040.86 s 4,172,245 s 4,149.67 s 4,108.55 Year
over
year l
oan growth (5.461 % Non
GAAP year
over
year loan growth excluding PPP loans 0.00 Apnked quarter loan growth
-
0.11 Non
GAAP linked quarter loan growth excluding PPP loans 2.05% Allowance for loan losses $ 64.152 75.493 s 74.551 s 75.295 $ 76.03
5 Allowance f
or loan losses to gross loans, net of unearned income 1.51% 1.78% 1.65% 1.70% 1.70% Allowance for loan losses to non
PPP gross loans, net of unearned income 1.56% 1.87% 1.79% 1.81% 1.85%