UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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)
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933
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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 July 17, 2023, CrossFirst Bankshares, Inc. (the “Company”) announced that it had released its financial results for its second quarter of
2023. A copy of the full text of the related press release, which is posted on the Investor Section of investors.crossfirstbankshares.com
under Financials – Quarterly Reports, is furnished as Exhibit 99.1 hereto and incorporated by reference into this Item 2.02. The Company
does not intend for information contained in its website to be part of this report.
The Company intends to hold a conference call to review second quarter 2023 financial results. The investor presentation, which will
accompany the call, is furnished as Exhibit 99.2 hereto and incorporated herein by reference.
The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2, is being “furnished” and shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly stated in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits
99.1
99.2
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:
July 17, 2023
CROSSFIRST BANKSHARES, INC.
By:
/s/ Benjamin R. Clouse
Benjamin R. Clouse
Chief Financial Officer
Exhibit 99.1
1
CrossFirst Bankshares, Inc. Reports Second Quarter 2023
Results
LEAWOOD, Kan., July 17, 2023 (GLOBE NEWSWIRE) -- CrossFirst Bankshares, Inc. (Nasdaq: CFB), the bank holding company for
CrossFirst Bank, today reported second quarter net income of $16.0 million, or $0.33 per diluted common share, and adjusted net income
of $17.3 million, or $0.35 per diluted common share on an adjusted basis.
Second Quarter 2023 Key Financial Performance Metrics
Net Income
ROAA
(1)
Net Interest Margin –
Fully Tax Equivalent
(“FTE”)
(1)
Diluted EPS
ROE
(1)
$16.0 million
0.93%
3.27%
$0.33
9.94%
Adjusted Second Quarter 2023 Key Financial Performance Metrics
(2)
Adjusted Net Income
Adjusted ROAA
(1)
Net Interest Margin -
FTE
(1)
Adjusted Diluted
EPS
Adjusted ROE
(1)
$17.3 million
1.00%
3.27%
$0.35
10.74%
CEO Commentary:
“We delivered consistent, strong earnings, grew our capital, right-sized our cost structure and maintained our deposit base in a challenging
environment,” said CrossFirst’s CEO and President, Mike Maddox. Mr. Maddox continued, “We remain focused on serving our clients,
maintaining credit quality and executing on our strategic initiatives.”
2023
Second Quarter Highlights:
●
Received regulatory approval for the previously-announced acquisition of Canyon Bancorporation, Inc. and its wholly owned
subsidiary, Canyon Community Bank, N.A., which is expected to add low-cost liquidity and deepens our Arizona franchise;
the Company expects to close the transaction in the third quarter of 2023
●
Loans grew $149 million, or 2.6%, for the quarter and grew 7.9% year-to date; loan growth was well diversified across
commercial and industrial, energy and commercial real estate – owner-occupied
●
Credit metrics remain strong with annualized net charge-offs of just 0.04% of average total loans and a non-performing assets
to total assets ratio of 0.19%
●
Non-interest-bearing deposits stabilized, decreasing 4% from the prior quarter, while total deposits increased 4.5% due to an
increase in wholesale funding sources at quarter-end
●
Identified meaningful non-interest expense savings for the remainder of 2023, advancing our efficiency improvement goal
●
Book value per share grew to $13.39 while tangible book value per common share
(2)
(1)
Ratios are annualized.
(2)
With the exception of Net Interest Margin - FTE, represents a non-GAAP financial measure. See “Table 5. Non-GAAP Financial Measures” for
a reconciliation of these measures.
Exhibit 99.1
2
Quarter-to-Date
Year-to-Date
(Dollars in millions except per share data)
June 30, 2023
March 31, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Operating revenue
(1)
$
60.3
$
62.6
$
50.9
$
123.0
$
99.0
Net income
$
16.0
$
16.1
$
15.5
$
32.2
$
32.4
Diluted earnings per common share
$
0.33
$
0.33
$
0.31
$
0.65
$
0.64
Return on average assets
0.93
%
0.97
%
1.12
%
0.95
%
1.18
%
Adjusted return on average assets
(2)
1.00
%
1.04
%
1.20
%
1.02
%
1.21
%
Return on average equity
9.94
%
10.53
%
10.15
%
10.23
%
10.30
%
Adjusted return on average equity
(2)
10.74
%
11.30
%
10.82
%
11.01
%
10.62
%
Net interest margin
3.23
%
3.60
%
3.46
%
3.41
%
3.35
%
Net interest margin -FTE
(3)
3.27
%
3.65
%
3.52
%
3.46
%
3.41
%
Efficiency ratio
62.02
%
60.81
%
57.36
%
61.41
%
57.46
%
Adjusted efficiency ratio - FTE
(2)(3)
57.27
%
56.42
%
53.95
%
56.84
%
55.26
%
(1)
Net interest income plus non-interest income.
(2)
Represents a non-GAAP financial measure. See "Table 5. Non-GAAP Financial Measures" for a reconciliation of these measures.
(3)
Tax exempt income is calculated on a tax-equivalent basis. Tax-free municipal securities are exempt from federal income taxes. The incremental federal
income tax rate used is 21.0%.
Income from Operations
Net income totaled $16.0 million, or $0.33 per diluted common share, for the second quarter of 2023, compared to $16.1 million, or $0.33
per diluted common share, during the first quarter of 2023 and $15.5 million, or $0.31 per diluted common share, during the second
quarter of 2022. On a linked quarter basis, net income was lower due to a decrease in net interest income partially offset by lower
provision expense, lower non-interest expenses and higher non-interest income. Compared to the same period in the prior year, the
quarter’s results were impacted by higher net interest income and non-interest income that were partially offset by higher provision
expense and non-interest expense.
The second quarter included severance charges of $1.3 million and acquisition -related charges of $0.3 million, resulting in adjusted net
income of $17.3 million, or $0.35 per diluted common share on an adjusted basis, compared to adjusted net income of $17.3 million, or
$0.35 per diluted common share, on an adjusted basis for the first quarter of 2023.
Net Interest Income
Fully tax equivalent net interest income totaled $55.3 million for the quarter, compared to $59.0 million for the first quarter of 2023, as the
benefit from higher average earning assets, higher loan yields and one additional day were more than offset by higher cost of funds. Net
interest margin – FTE narrowed 38 basis points compared to the prior quarter to 3.27%.
Average earning assets increased $217 million compared to the prior quarter primarily due to higher average loan balances and average
investment balances. The increase in average loans and investments more than offset the lower average cash balances. The yield on
earning assets widened 31 basis points entirely due to stronger loan yields from the repricing of variable rate loans as well as higher
pricing on new loans. The cost of interest-bearing liabilities increased 68 basis points due to continued pricing pressure on interest-bearing
deposits and due to the decrease in non-interest-bearing deposits experienced late in the first quarter of 2023, which negatively impacted
the second quarter 2023 net interest margin.
Compared to the second quarter of 2022, net interest income – FTE increased $7.8 million while net interest margin - FTE decreased 25
basis points. The higher income is due to 25% growth in average earning assets while the net interest margin – FTE decreased as higher
loan yields were more than offset by a higher cost of funds due to the rising rate environment. The increase in average earning assets was
entirely driven by higher average loan and investment balances, partially offset by lower average cash balances. The yield on earning
assets increased 2.41% due to new loan production as well as repricing of variable rate loans. The cost of funds increased 2.91% over the
same period due to pricing pressure on deposits as well as client migration into higher cost deposit products compared to the prior year.
CROSSFIRST BANKSHARES, INC.
3
Non-Interest Income
Non-interest income increased $1.4 million compared to the first quarter of 2023 and increased by $1.6 million compared to the same
quarter in 2022. The increase in non-interest income compared to both prior periods was due to increases in service charges and fees and
gains on sales of loans. Additionally, ATM and credit card interchange income decreased compared to the prior year due to one large
customer with pandemic-related activity that was not recurring.
Non-Interest Expense
Non-interest expense decreased $0.7 million from the first quarter of 2023 and increased $8.2 million from the second quarter of 2022.
The second quarter of 2023 included $0.3 million of acquisition-related expenses, most of which were included in professional fees, and
$1.3 million of employee separation costs included in salaries and employee benefits. The first quarter of 2023 included $1.5 million of
acquisition-related expenses with $1.1 million included in professional fees, $0.2 million in salaries and employee benefits, $0.1 million in
advertising, and $0.1 million in other non-interest expense. The second quarter of 2022 included $0.2 million of acquisition-related
expenses, most of which were included in professional fees, and $1.0 million of employee separation costs included in other non-interest
expense. Excluding these acquisition-related expenses and employee separation costs, non-interest expense decreased $0.8 million
compared to the first quarter of 2023 and increased $7.9 million compared to the second quarter of 2022. Compared to the prior quarter,
data processing and professional fees were $1.0 million lower due to completion of projects in the first quarter. Additionally, other non-
interest expenses decreased $0.3 million primarily due to a decrease in discretionary expenses. Partially offsetting these decreases was an
increase in deposit insurance premiums primarily due to growth in assets and a higher assessment rate. Compared to the second quarter of
2022, salaries and employee benefits costs were higher due to the addition of employees as part of the Colorado and New Mexico
acquisition, as well as merit increases. Occupancy costs increased due to the addition of a second location in Dallas, Texas and new
properties in Colorado and New Mexico. Additionally, deposit insurance premiums increased as previously noted. Software and
communication expenses increased due to technology for additional employees and clients as well as new technology implementation.
Core deposit intangible amortization expense also increased compared to the prior year as a result of the previously mentioned acquisition.
The Company’s effective tax rate for the second quarter of 2023 was 20.8%, as compared to 20.0% in the first quarter of 2023 and 20.6%
for the second quarter of 2022.
Statement of Financial Condition Performance & Analysis
During the second quarter of 2023, total assets increased by $0.2 billion, or 3%, compared to the end of the prior quarter and increased
$1.4 billion, or 25%, compared to June 30, 2022. Total assets increased on a linked quarter basis primarily due to a $0.1 billion increase in
loans. The year-over-year increase was primarily due to an increase in loans of $1.3 billion, including $0.4 billion in acquired loans.
Deposits increased $0.3 billion compared to March 31, 2023, and increased $1.4 billion from June 30, 2022, including $0.6 billion in
acquired deposits.
Loan Results
During the second quarter of 2023, loans increased $149 million, or 11% annualized, compared to March 31, 2023, and increased $1.3
billion, or 28%, compared to June 30, 2022, including the impact of acquired loans which added 9%. The linked quarter increase in loans
was a result of growth primarily in the commercial and industrial, energy and commercial real estate – owner-occupied portfolios. The
loan increase compared to June 30, 2022 was primarily due to growth in the commercial and industrial, commercial real estate – owner-
occupied and commercial real estate – non-owner-occupied portfolios and included the impact of acquired loans.
6/30/23
3/31/23
12/31/22
9/30/22
6/30/22
% of
Total
QoQ
Growth
($)
QoQ
Growth
(%)
YoY
Growth
($)
YoY
Growth
(%)
(Dollars in millions)
Period-end loans (gross)
Commercial and industrial
$
2,058
$
2,034
$
1,975
$
1,689
$
1,600
36
%
$
24
1
%
$
458
29
%
Energy
233
194
173
179
233
4
39
20
-
0
Commercial real estate -
owner-occupied
543
478
437
362
373
9
65
14
170
46
Commercial real estate -
non-owner-occupied
2,480
2,472
2,315
1,988
1,897
42
8
0
583
31
Residential real estate
440
440
439
421
395
8
-
0
45
11
Consumer
43
30
34
39
30
1
13
43
13
43
Total
$
5,797
$
5,648
$
5,373
$
4,678
$
4,528
100
%
$
149
3
%
$
1,269
28
%
CROSSFIRST BANKSHARES, INC.
4
Deposit & Other Borrowing Results
During the second quarter of 2023, deposits increased 5%, compared to March 31, 2023, and increased 29%, compared to June 30, 2022.
The deposit increase compared to March 31, 2023 was due to increases in time deposits, partially offset by decreases in all other deposit
categories. Approximately one-third of the time deposit increase was from new client money and shifts from other deposit categories with
the balance representing an increase in wholesale funding. The deposit increase compared to June 30, 2022 was due to increases in
transaction deposits, savings and money market deposits and time deposits, includin g acquired deposits, partially offset by decreases in
non-interest-bearing deposits.
6/30/23
3/31/23
12/31/22
9/30/22
6/30/22
QoQ
Growth
($)
QoQ
Growth
(%)
YoY
Growth
($)
YoY
Growth
(%)
(Dollars in millions)
Period-end deposits
Non-interest-bearing deposits
$
928
$
970
$
1,400
$
1,114
$
1,163
$
(42)
(4)
%
$
(235)
(20)
%
Transaction deposits
604
665
544
519
497
(61)
(9)
107
22
Savings and money market deposits
2,730
2,826
2,761
2,605
2,351
(96)
(3)
379
16
Time deposits
1,838
1,376
946
750
733
462
34
1,105
151
Total
$
6,100
$
5,837
$
5,651
$
4,988
$
4,744
$
263
5
%
$
1,356
29
%
Asset Quality and Provision for Credit Losses
The Company recorded $2.6 million of provision expense, compared to $4.4 million in the prior quarter and $2.1 million in the prior year
second quarter. The current quarter’s provision expense was primarily driven by loan growth and net charge-offs of $0.6 million.
Non-performing assets increased $2.1 million to $13.3 million at June 30, 2023 primarily due to an increase in non-accrual loans , partially
offset by the sale of one other real estate owned property. The non-performing assets to total assets ratio decreased from 0.54% at June 30,
2022 to 0.19% at June 30, 2023.
Annualized net charge-offs were 0.04% for the quarter compared to 0.12% in the prior quarter and 0.10%
in the prior year second quarter.
The allowance for credit losses was $67.6 million or 1.17% of outstanding loans at June 30, 2023. The combined allowance for credit
losses and accrual for off-balance sheet credit risk from unfunded commitments (“RUC”) was $75.3 million or 1.30% of outstanding loans
which was consistent with the linked quarter and lower than the prior year second quarter, owing primarily to the reduction in specific
reserves on non-performing loans.
The following table provides information regarding asset quality.
Asset quality
6/30/23
3/31/23
12/31/22
9/30/22
6/30/22
Non-accrual loans
$
12.9
$
9.5
$
11.3
$
16.9
$
27.7
Other real estate owned
-
0.9
1.1
1.0
1.0
Loans 90+ days past due and still accruing
0.4
0.8
0.8
0.3
2.2
Non-performing assets
$
13.3
$
11.2
$
13.2
$
18.2
$
30.8
Loans 30 - 89 days past due
13.3
5.1
19.6
21.4
16.6
Net charge-offs (recoveries)
0.6
1.6
(0.3)
1.9
1.1
Asset quality metrics
(%)
6/30/23
3/31/23
12/31/22
9/30/22
6/30/22
Nonperforming assets to total assets
0.19
%
0.16
%
0.20
%
0.31
%
0.54
%
Allowance for credit losses to total loans
1.17
1.15
1.15
1.19
1.23
Allowance for credit losses + RUC to total loans
(2)
1.30
1.30
1.31
1.34
1.35
Allowance for credit losses to non-performing loans
508
629
514
324
187
Net charge-offs (recoveries) to average loans
(1)
0.04
0.12
(0.02)
0.16
0.10
Provision to average loans
(1)
0.18
0.32
0.53
0.29
0.19
Classified Loans / (Total Capital + ACL)
9.7
9.4
10.1
11.3
12.1
Classified Loans / (Total Capital + ACL + RUC)
(2)
9.6
9.3
10.0
11.2
12.0
(1)
Interim periods annualized.
(2)
Includes the accrual for off-balance sheet credit risk from unfunded commitments
CROSSFIRST BANKSHARES, INC.
5
Capital Position
At June 30, 2023, stockholders' equity totaled $651 million, or $13.39 per common share, compared to $645 million, or $13.28 per
common share, at March 31, 2023. The increase was due to net income partially offset by an increase in accumulated other comprehensive
loss from the unrealized loss on available-for-sale securities, net of tax.
Tangible book value per common share was $12.67 at June 30, 2023, an increase of $0.13 from March 31, 2023. The ratio of common
equity Tier 1 capital to risk-weighted assets was approximately 9.5%, and the ratio of total capital to risk-weighted assets was
approximately 10.7% at June 30, 2023.
CROSSFIRST BANKSHARES, INC.
6
Conference Call and Webcast
Management will host a conference call to review second quarter financial results on Tuesday, July 18, 2023, at 10 a.m. CT / 11 a.m. ET.
The conference call and webcast may also include discussion of Company developments, forward-looking statements and other material
information about business and financial matters. To access the event by telephone, please dial
(
844) 481-2831 at least fifteen minutes
prior to the start of the call and request access to the CrossFirst Bankshares call. International callers should dial
+1
(412) 317-1851 and
request access as directed above. The call will also be broadcast live over the internet and can be accessed via the following link:
https://edge.media-server.com/mmc/p/2trnbcdr. Please visit the site at least 15 minutes prior to the call to allow time for registration. For
those unable to join the presentation, a replay of the call will be available two hours after the conclusion of the live call. To access the
replay, dial (877) 344-7529 and enter the replay access code 8140702 . International callers should dial +1 (412) 317-0088 and enter the
same access code. A replay of the webcast will also be available for 90 days on the Company’s website
https://investors.crossfirstbankshares.com/.
Cautionary Notice about Forward-Looking Statements
The financial results in this press release reflect preliminary, unaudited results, which are not final until the Company’s Quarterly Report
on Form 10-Q is filed. This earnings release contains forward-looking statements regarding, among other things, our business plans,
expansion targets and opportunities, expected completion and timing of completion of our acquisition of Canyon Bancorporation, Inc., and
future 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 “growth,” “approximately,” “believe,” “future,” “optimistic,” “opportunity,”
“anticipated,” “expectations,” “expect,” “will,” “initiatives,” “could,” “strategy,” “goal,” “focused,” “work toward” and similar words or
phrases. 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 its
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, a decline in general business and economic conditions and any regulatory
responses thereto, including uncertainty and volatility in the financial markets; interest rate fluctuations; our ability to effectively execute
our growth strategy and manage our growth, including identifying and consummating suitable mergers and acquisitions, entering new lines
of business or offering new or enhanced services or products; the transition away from the London Interbank Offered Rate (LIBOR);
fluctuations in fair value of our investments due to factors outside of our control; our ability to successfully manage credit risk and the
sufficiency of our allowance; geographic concentration of our markets; economic impact on our commercial real estate and commercial-
based loan portfolios, including declines in commercial and residential real estate values; an increase in non-performing assets; our ability
to attract, hire and retain key personnel; maintaining and increasing customer deposits, funding availability, liquidity and our ability to
raise and maintain sufficient capital; competition from banks, credit unions and other financial services providers; the effectiveness of our
risk management framework; accounting estimates; our ability to maintain effective internal control over financial reporting; our ability to
keep pace with technological changes; cyber incidents or other failures, disruptions or security breaches; employee error, fraud committed
against the Company or our clients, or incomplete or inaccurate information about clients and counterparties; mortgage markets; our
ability to maintain our reputation; costs and effects of litigation; environmental liability; risk exposure from transactions with financial
counterparties; severe weather, natural disasters, acts of war or terrorism or other external events; and changes in laws, rules, regulations,
interpretations or policies relating to financial institutions. These and other factors that could cause results to differ materially from those
described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be
found in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and
Exchange Commission. These forward-looking statements are made as of the date of this communication, and we disclaim any obligation
to update any forward-looking statement or to publicly announce the results of any revisions to any of the forward-looking statements
included herein, except as required by law.
About CrossFirst Bankshares, Inc.
CrossFirst Bankshares, Inc. (Nasdaq: CFB) is a Kansas corporation and a registered bank holding company for its wholly owned
subsidiary, CrossFirst Bank, a full-service financial institution that offers products and services to businesses, professionals, individuals,
and families. CrossFirst Bank, headquartered in Leawood, Kansas, has locations in Kansas, Missouri, Oklahoma, Texas, Arizona,
Colorado, and New Mexico.
INVESTOR CONTACT
Mike Daley, Chief Accounting Officer and Head of Investor Relations
mike.daley@crossfirstbank.com
(913) 754-9707
https://investors.crossfirstbankshares.com
CROSSFIRST BANKSHARES, INC.
7
TABLE 1. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
June 30, 2023
March 31, 2023
December 31, 2022
(Dollars in thousands)
Assets
Cash and cash equivalents
$
342,497
$
262,971
$
300,138
Available-for-sale securities - taxable
297,097
280,408
198,808
Available-for-sale securities - tax-exempt
446,803
470,843
488,093
Loans, net of unearned fees
5,796,599
5,647,639
5,372,729
Allowance for credit losses on loans
67,567
65,130
61,775
Loans, net of the allowance for credit losses on loans
5,729,032
5,582,509
5,310,954
Premises and equipment, net
68,539
67,311
65,984
Restricted equity securities
13,060
16,700
12,536
Interest receivable
33,303
30,385
29,507
Foreclosed assets held for sale
-
855
1,130
Goodwill and other intangible assets, net
27,457
28,259
29,081
Bank-owned life insurance
69,929
69,511
69,101
Other
92,461
84,978
95,754
Total assets
$
7,120,178
$
6,894,730
$
6,601,086
Liabilities and stockholders’ equity
Deposits
Non-interest-bearing
$
928,098
$
969,701
$
1,400,260
Savings, NOW and money market
3,333,514
3,491,586
3,305,481
Time
1,838,455
1,376,027
945,567
Total deposits
6,100,067
5,837,314
5,651,308
Federal Home Loan Bank advances
262,708
314,031
218,111
Other borrowings
14,320
17,970
35,457
Interest payable and other liabilities
91,600
79,924
87,611
Total liabilities
6,468,695
6,249,239
5,992,487
Stockholders’ equity
Preferred Stock, $0.01 par value: Authorized - 15,000 shares,
issued - 7,750 at June 30, 2023 and March 31, 2023 and no
shares at December 31, 2022
-
-
-
Common Stock, $0.01 par value: Authorized - 200,000,000
shares, issued - 53,241,885, 53,189,016 and 53,036,613 shares
at June 30, 2023, March 31, 2023 and December 31, 2022,
respectively
532
532
530
Treasury stock, at cost: 4,588,398 shares held at June 30,
2023, March 31, 2023 and December 31, 2022
(64,127)
(64,127)
(64,127)
Additional paid-in capital
539,793
539,023
530,658
Retained earnings
238,147
222,203
206,095
Accumulated other comprehensive loss
(62,862)
(52,140)
(64,557)
Total stockholders’ equity
651,483
645,491
608,599
Total liabilities and stockholders’ equity
$
7,120,178
$
6,894,730
$
6,601,086
CROSSFIRST BANKSHARES, INC.
8
Three Months Ended
Six Months Ended
June 30,
March 31
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
(Dollars in thousands except per share data)
Interest Income
Loans, including fees
$
98,982
$
89,618
$
47,327
$
188,600
$
90,055
Available-for-sale securities - taxable
2,622
1,849
1,086
4,471
2,130
Available-for-sale securities - tax-exempt
3,571
3,794
3,845
7,365
7,537
Deposits with financial institutions
1,609
2,014
369
3,623
521
Dividends on bank stocks
364
262
213
626
357
Total interest income
107,148
97,537
52,840
204,685
100,600
Interest Expense
Deposits
48,663
36,725
4,732
85,388
8,243
Fed funds purchased and repurchase agreements
-
46
74
46
74
Federal Home Loan Bank Advances
3,734
2,391
1,294
6,125
2,403
Other borrowings
212
154
31
366
56
Total interest expense
52,609
39,316
6,131
91,925
10,776
Net Interest Income
54,539
58,221
46,709
112,760
89,824
Provision for Credit Losses
2,640
4,421
2,135
7,061
1,510
Net Interest Income after Provision for Credit
Losses
51,899
53,800
44,574
105,699
88,314
Non-Interest Income
Service charges and fees on customer accounts
2,110
1,829
1,546
3,939
2,954
ATM and credit card interchange income
1,213
1,264
1,521
2,477
4,185
Realized gains (losses) on available-for-sale securities
-
63
(12)
63
(38)
Gain on sale of loans
1,205
187
-
1,392
-
Gains (losses) on equity securities, net
6
10
(71)
16
(174)
Income from bank-owned life insurance
418
411
407
829
795
Swap fees and credit valuation adjustments, net
84
90
12
174
130
Other non-interest income
743
567
798
1,310
1,291
Total non-interest income
5,779
4,421
4,201
10,200
9,143
Non-Interest Expense
Salaries and employee benefits
24,061
22,622
17,095
46,683
35,036
Occupancy
3,054
2,974
2,622
6,028
5,115
Professional fees
970
2,618
1,068
3,588
1,873
Deposit insurance premiums
1,881
1,531
713
3,412
1,450
Data processing
1,057
1,242
1,160
2,299
1,972
Advertising
649
752
757
1,401
1,449
Software and communication
1,655
1,651
1,198
3,306
2,468
Foreclosed assets, net
(21)
149
15
128
(38)
Other non-interest expense
3,304
3,731
4,555
7,035
7,505
Core deposit intangible amortization
802
822
20
1,624
39
Total non-interest expense
37,412
38,092
29,203
75,504
56,869
Net Income Before Taxes
20,266
20,129
19,572
40,395
40,588
Income tax expense
4,219
4,021
4,027
8,240
8,215
Net Income
$
16,047
$
16,108
$
15,545
$
32,155
$
32,373
Basic Earnings Per Common Share
$
0.33
$
0.33
$
0.31
$
0.66
$
0.65
Diluted Earnings Per Common Share
$
0.33
$
0.33
$
0.31
$
0.65
$
0.64
CROSSFIRST BANKSHARES, INC.
9
TABLE 3. YEAR-TO-DATE ANALYSIS OF CHANGES IN NET INTEREST
INCOME - FTE
(UNAUDITED)
Six Months Ended
June 30,
2023
2022
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
$
302,763
$
5,097
3.37
%
$
220,783
$
2,487
2.26
%
Securities - tax-exempt - FTE
(1)
527,047
8,912
3.38
543,873
9,120
3.35
Federal funds sold
873
6
1.39
-
-
-
Interest-bearing deposits in other banks
170,287
3,617
4.28
253,771
521
0.41
Gross loans, net of unearned income
(2)
5,658,698
188,600
6.72
4,385,664
90,055
4.14
Total interest-earning assets - FTE
(1)
6,659,668
$
206,232
6.24
%
5,404,091
$
102,183
3.81
%
Allowance for loan losses
(64,664)
(57,324)
Other non-interest-earning assets
226,983
207,881
Total assets
$
6,821,987
$
5,554,648
Interest-bearing liabilities
Transaction deposits
$
570,661
$
7,839
2.77
%
$
546,982
$
596
0.22
%
Savings and money market deposits
2,794,201
50,496
3.64
2,318,415
4,716
0.41
Time deposits
1,357,688
27,053
4.02
573,503
2,931
1.03
Total interest-bearing deposits
4,722,550
85,388
3.65
3,438,900
8,243
0.48
FHLB and short-term borrowings
311,471
6,423
4.16
280,883
2,477
1.78
Trust preferred securities, net of fair value
adjustments
1,070
114
21.49
1,018
56
11.11
Non-interest-bearing deposits
1,057,268
-
-
1,153,499
-
-
Cost of funds
6,092,359
$
91,925
3.04
%
4,874,300
$
10,776
0.44
%
Other liabilities
95,702
46,312
Stockholders’ equity
633,926
634,036
Total liabilities and stockholders' equity
$
6,821,987
$
5,554,648
Net interest income - FTE
(1)
$
114,307
$
91,407
Net interest spread - FTE
(1)
3.20
%
3.37
%
Net interest margin - FTE
(1)
3.46
%
3.41
%
(1)
rate used is 21.0%.
(2)
Average gross loan balances include non-accrual loans.
(3)
Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed
in this release may not produce the same amounts.
CROSSFIRST BANKSHARES, INC.
10
TABLE 4. QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME – FTE (UNAUDITED)
Three Months Ended
June 30, 2023
March 31, 2023
June 30, 2022
Average
Balance
Interest
Income /
Expense
Average
Yield /
Rate
(3)
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
$
336,446
$
2,986
3.55
%
$
268,705
$
2,111
3.14
%
$
220,763
$
1,299
2.35
%
Securities - tax-exempt - FTE
(1)
511,993
4,321
3.38
542,268
4,591
3.39
553,960
4,653
3.36
Federal funds sold
-
-
-
1,757
5
1.15
-
-
-
Interest-bearing deposits in other banks
145,559
1,609
4.43
195,289
2,009
4.17
198,210
369
0.75
Gross loans, net of unearned income
(2)
5,776,137
98,982
6.87
5,539,954
89,618
6.56
4,437,917
47,327
4.28
Total interest-earning assets - FTE
(1)
6,770,135
$
107,898
6.39
%
6,547,973
$
98,334
6.08
%
5,410,850
$
53,648
3.98
%
Allowance for loan losses
(66,078)
(63,235)
(56,732)
Other non-interest-earning assets
225,915
228,063
191,539
Total assets
$
6,929,972
$
6,712,801
$
5,545,657
Interest-bearing liabilities
Transaction deposits
$
598,646
$
4,339
2.91
%
$
542,366
$
3,500
2.62
%
$
508,403
$
374
0.29
%
Savings and money market deposits
2,707,637
26,927
3.99
2,881,726
23,569
3.32
2,334,103
2,869
0.49
Time deposits
1,612,105
17,397
4.33
1,100,444
9,656
3.56
559,708
1,489
1.07
Total interest-bearing deposits
4,918,388
48,663
3.97
4,524,536
36,725
3.29
3,402,214
4,732
0.56
FHLB and short-term borrowings
349,763
3,888
4.46
272,754
2,535
3.77
330,064
1,368
1.66
Trust preferred securities, net of fair value
adjustments
1,077
58
21.60
1,062
56
21.39
1,024
29
11.94
Non-interest-bearing deposits
921,259
-
-
1,194,788
-
-
1,149,654
-
-
Cost of funds
6,190,487
$
52,609
3.41
%
5,993,140
$
39,316
2.66
%
4,882,956
$
6,129
0.50
%
Other liabilities
91,994
99,451
48,160
Stockholders’ equity
647,491
620,210
614,541
Total liabilities and stockholders' equity
$
6,929,972
$
6,712,801
$
5,545,657
Net interest income - FTE
(1)
$
55,289
$
59,018
$
47,519
Net interest spread - FTE
(1)
2.98
%
3.42
%
3.48
%
Net interest margin - FTE
(1)
3.27
%
3.65
%
3.52
%
(1)
(2)
Average loan balances include non-accrual loans.
(3)
Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this release may
not produce the same amounts.
CROSSFIRST BANKSHARES, INC.
11
TABLE 5. NON-GAAP FINANCIAL MEASURES
Non-GAAP Financial Measures
In addition to disclosing financial measures determined in accordance with U.S. generally accepted accounting principles (GAAP), the
Company discloses non-GAAP financial measures in this release including “tangible common stockholders’ equity,” “tangible book value
per common share,” “adjusted efficiency ratio – fully tax equivalent (FTE),” “adjusted net income,” “adjusted diluted earnings per
common share,” “adjusted return on average assets (ROAA),” and “adjusted return on equity (ROE).” We consider the use of select non-
GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period
comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our
performance by excluding certain expenditures or gains that we believe are not indicative of our primary business operating results. We
believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and
when planning, forecasting, analyzing and comparing past, present and future periods.
These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP
and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we
present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by
providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the
impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be
considered when analyzing our performance.
A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures follows.
CROSSFIRST BANKSHARES, INC.
12
Quarter Ended
Six Months Ended
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
6/30/2023
6/30/2022
(Dollars in thousands, except per share data)
Adjusted net income:
Net income
$
16,047
$
16,108
$
11,946
$
17,280
$
15,545
$
32,155
$
32,373
Add: Acquisition costs
338
1,477
3,570
81
239
1,815
239
Add: Acquisition - Day 1 CECL provision
-
-
4,400
-
-
-
-
Add: Employee separation
1,300
-
-
-
1,063
1,300
1,063
Less: Tax effect
(1)
(344)
(310)
(2,045)
(17)
(273)
(654)
(273)
Adjusted net income
$
17,341
$
17,275
$
17,871
$
17,344
$
16,574
$
34,616
$
33,402
Preferred stock dividends
$
103
$
-
$
-
$
-
$
-
$
103
$
-
Diluted weighted average common shares outstanding
48,943,325
49,043,621
49,165,578
49,725,207
50,203,725
48,994,807
50,561,868
Diluted earnings per common share
$
0.33
$
0.33
$
0.24
$
0.35
$
0.31
$
0.65
$
0.64
Adjusted diluted earnings per common share
$
0.35
$
0.35
$
0.36
$
0.35
$
0.33
$
0.70
$
0.66
(1)
Represents the tax impact of the adjustments at a tax rate of 21.0%, plus permanent tax expense associated with merger related transactions
Quarter Ended
Six Months Ended
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
6/30/2023
6/30/2022
(Dollars in thousands)
Adjusted return on average assets:
Net income
$
16,047
$
16,108
$
11,946
$
17,280
$
15,545
$
32,155
$
32,373
Adjusted net income
17,341
17,275
17,871
17,344
16,574
34,616
33,402
Average assets
$
6,929,972
$
6,712,801
$
6,159,783
$
5,764,347
$
5,545,657
$
6,821,987
$
5,554,648
Return on average assets
0.93
%
0.97
%
0.77
%
1.19
%
1.12
%
0.95
%
1.18
%
Adjusted return on average assets
1.00
%
1.04
%
1.15
%
1.19
%
1.20
%
1.02
%
1.21
%
Quarter Ended
Six Months Ended
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
6/30/2023
6/30/2022
(Dollars in thousands)
Adjusted return on average equity:
Net income
$
16,047
$
16,108
$
11,946
$
17,280
$
15,545
$
32,155
$
32,373
Adjusted net income
17,341
17,275
17,871
17,344
16,574
34,616
33,402
Average equity
$
647,491
$
620,210
$
589,587
$
613,206
$
614,541
$
633,926
$
634,036
Return on average equity
9.94
%
10.53
%
8.04
%
11.18
%
10.15
%
10.23
%
10.30
%
Adjusted return on average equity
10.74
%
11.30
%
12.03
%
11.22
%
10.82
%
11.01
%
10.62
%
CROSSFIRST BANKSHARES, INC.
13
Quarter Ended
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
(Dollars in thousands, except per share data)
Tangible common stockholders' equity:
Total stockholders' equity
$
651,483
$
645,491
$
608,599
$
580,547
$
608,016
611946000
Less: goodwill and other intangible assets
27,457
28,259
29,081
71
91
Less: preferred stock
7,750
7,750
-
-
-
7669000
Tangible common stockholders' equity
$
616,276
$
609,482
$
579,518
$
580,476
$
607,925
Tangible book value per common share:
Tangible common stockholders' equity
$
616,276
$
609,482
$
579,518
$
580,476
$
607,925
604277000
Common shares outstanding at end of period
48,653,487
48,600,618
48,448,215
48,787,696
49,535,949
52098062
Book value per common share
$
13.39
$
13.28
$
12.56
$
11.90
$
12.27
11.75
Tangible book value per common share
$
12.67
$
12.54
$
11.96
$
11.90
$
12.27
11.6
Quarter Ended
Six Months Ended
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
6/30/2023
6/30/2022
(Dollars in thousands)
Adjusted Efficiency Ratio - Fully Tax Equivalent (FTE)
(1)
Non-interest expense
$
37,412
$
38,092
$
36,423
$
28,451
$
29,203
$
75,504
$
56,869
Less: Acquisition costs
(338)
(1,477)
(3,570)
(81)
(239)
(1,815)
(239)
Less: Core deposit intangible amortization
(802)
(822)
(291)
-
-
(1,624)
-
Less: Employee separation
(1,300)
-
-
-
(1,063)
(1,300)
(1,063)
Adjusted Non-interest expense (numerator)
$
34,972
$
35,793
$
32,562
$
28,370
$
27,901
$
70,765
$
55,567
Net interest income
54,539
58,221
54,015
49,695
46,709
112,760
89,824
Tax equivalent interest income
(1)
750
797
818
820
808
1,547
1,583
Non-interest income
5,779
4,421
4,359
3,780
4,201
10,200
9,143
Total tax-equivalent income (denominator)
$
61,068
$
63,439
$
59,192
$
54,295
$
51,718
$
124,507
$
100,550
Efficiency Ratio
62.02
%
60.81
%
62.40
%
53.20
%
57.36
%
61.41
%
57.46
%
Adjusted Efficiency Ratio - Fully Tax Equivalent (FTE)
(1)
57.27
%
56.42
%
55.01
%
52.25
%
53.95
%
56.84
%
55.26
%
(1)
Tax exempt income (tax-free municipal securities) is calculated on a tax equivalent basis. The incremental tax rate used is 21.0%.
Exhibit 99.2
CROSSFIRST BANKSHARES, INC. NASDAQ: CFB Second Quarter 2023 Earnings Presentation July 17, 2023
LEGAL DISCLAIMER CROSSFIRST BANKSAHRES INC. FORWARD -LOOKING STATEMENTS. The financial results in this presentation reflect preliminary, unaudited results, which are not final until the Company’s Quarterly Report on Form 10-Q is filed. This presentation and oral statements made relating to this presentation contain forward-looking statements. These forward- looking statements reflect our current views and include, but are not limited to, statements regarding our business plans, expansion targets and opportunities, the expected completion and timing of our acquisition of Canyon Bancorporation, Inc. and its wholly owned subsidiary, Canyon Community Bank, National Association (collectively, "Canyon"), and future financial performance. These statements are often, but not always, made through the use of words or phrases such as “positioning,” “growth,” “approximately,” “believe, ” “plan,” “future,” “opportunity,” “anticipate,” “target,” “expectations,” “expect,” “will,” “strategy,” “goal, “focused,” “foresee ” 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 a guarantee 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: a decline in general business and economic conditions and any regulatory responses thereto, including uncertainty and volatility in the financial markets; interest rate fluctuations; our ability to effectively execute our growth strategy and manage our growth, including identifying and consummating suitable mergers and acquisitions, entering new lines of business or offering new or enhanced services or products; the transition away from the London Interbank Offered Rate (LIBOR); fluctuations in fair value of our investments due to factors outside of our control; our ability to successfully manage credit risk and the sufficiency of our allowance; geographic concentration of our markets; economic impact on our commercial real estate and commercial-based loan portfolios, including declines in commercial and residential real estate values; an increase in non-performing assets; our ability to attract, hire and retain key personnel; maintaining and increasing customer deposits, funding availability, liquidity and our ability to raise and maintain sufficient capital; competition from banks, credit unions and other financial services providers; the effectiveness of our risk management framework; accounting estimates; our ability to maintain effective internal control over financial reporting; our ability to keep pace with technological changes; cyber incidents or other failures, disruptions or security breaches; employee error, fraud committed against the Company or our clients, or incomplete or inaccurate information about clients and counterparties; mortgage markets; our ability to maintain our reputation; costs and effects of litigation; environmental liability; risk exposure from transactions with financial counterparties; severe weather, natural
disasters, acts of war or terrorism or other external events; and changes in laws, rules, regulations, interpretations or policies relating to financial institutions. These and other factors that could cause results to differ materially from those described in the forward -looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. These forward-looking statements are made as of the date hereof, and we disclaim any obligation to update any forward-looking statement or to publicly announce the results of any revisions to any of the forward-looking statements included herein, except as required by law. 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. * CrossFirst acquired Farmers & Stockmens Bank (referred to herein as “Central”) on November 22, 2022. 2
About non-gaap financial measures CROSSFIRST BANKSAHRES INC. In addition to disclosing financial measures determined in accordance with U.S. generally accepted accounting principles (GAAP), we disclose non-GAAP financial measures, including “adjusted net income”, “adjusted diluted earnings per common share”, “tangible common stockholders’ equity”, “tangible book value per common share”, “adjusted return on average assets (ROAA)”, “adjusted return on average equity (ROE)” and “adjusted efficiency ratio – fully tax equivalent (FTE).” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or gains that we believe are not indicative of our primary business operating results. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods. These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and should not be relied on alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A
reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is provided at the end of this presentation. 3
SECOND QUARTER 2023 HIGHLIGHTS CROSSFIRST BANKSAHRES INC. Net Income $16.0 Diluted EPS ROE*1* ROAA*1* Million $033 9.94% 0.93% Financial Performance Adjusted*2* Adjusted*2* Adjusted*1»2* Adjusted*1**2* Net Income Diluted EPS ROE ROAA $173 Million $035 10.74% 1.00% Profitability Received regulatory approval for previously announced acquisition of Canyon Bancorporation, Inc., which is expected to add low-cost liquidity and deepen our Arizona franchise Fully tax equivalent NIM(3) narrowed 38 basis points to 3.27%, as continued pricing pressure on deposits & deposit mix changes outweighed the increases from loans Identified meaningful non-interest expense savings for the remainder of 2023, advancing our efficiency improvement goal Balance Sheet Loans grew $149 million, or 2.6% for the quarter and 7.9% year-to-date Non-interest-bearing deposits stabilized, decreasing 4% from Q1 2023 Book value per share grew to $13.39, while tangible book value per common share(2) grew to $12.67 Credit Quality Credit metrics remain strong with annualized NCOs / average loans of 0.04% and NPAs / assets of 0.19%, which is a decline of 35 basis points from June 30, 2022 Provisioned $2.6 million during the quarter, largely to support loan growth (1) Ratios are annualized (2) Represents a non-GAAP financial measure, see non-GAAP reconciliation slides at the end of this presentation for more details (3) The incremental Federal income tax rate used in calculating tax exempt income on a tax equivalent basis is 21.0% 4
DIVERSE LOAN PORTFOLIO CROSSFIRST BANKSAHRES INC. Loan Mix by Type ($5.8bn) Commercial 36% Energy 4% CRE - Owner-Occupied 9% CRE - Non-Owner-Occupied 42% Residential Real Estate 8% Consumer 1% Note: Gross loans, (net of unearned income) data as of June 30, 2023. 5
DIVERSE LOAN PORTFOLIO CROSSFIRST BANKSAHRES INC. CRE – Non-Owner-Occupied Loan Portfolio by Segment Retail 16% Office 13% Industrial 17% 1-4 Family Res Construction 7% Hotel 9% Other 25% Multi-Family 13% Commercial Loan Breakdown by Type Financial Management 6% Aircraft & Transportation 6% Merchant Wholesalers 3% Other Industries 36% Manufacturing 11% Real Estate Activity 6% Business Loans to Individuals 5% Credit Related Activities 7% Health Care 6% Engineering & Contracting 7% Restaurants 7% Note: Data as of June 30, 2023. 6
ASSET QUALITY PERFORMANCE CROSSFIRST BANKSAHRES INC. Classified Loans / Capital + ACL + RUC(1) $81.5 $72.1 $67.7 $67.0 $69.5 12.0% 11.2% 10.0% 9.3% 9.6% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Classified Assets Classified/Total Capital + ACL + RUC Classified Loans and the ratio of Classified Loans to Total Capital + ACL + RUC increased slightly but remain consistent with prior quarters Non-performing Assets / Total Assets 0.54% 0.31% 0.20% 0.16% 0.19% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 NPAs increased primarily due to an increase in non-accrual loans, partially offset by the sale of one OREO property Note: Dollar amounts are in millions (1) RUC includes the accrual for off-balance sheet credit risk for unfunded commitments. 7
ASSET QUALITY PERFORMANCE CROSSFIRST BANKSAHRES INC. Net Charge-offs (Recoveries) / Average Loans(1) 0.10% 0.16% -0.02% 0.12% 0.04% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Net charge-offs were $0.6 million for Q2 2023, compared to $1.6 million in Q1 2023 and $1.1 million in Q2 2022 Net charge-offs were 0.07% annualized on a trailing 12-month basis Allowance for Credit Losses + RUC(2) / Total Loans 1.35% 1.34% 1.31% 1.30% 1.30% $5.3 $6.7 $8.7 $8.1 $7.7 $55.8 $55.9 $61.8 $65.1 $67.6 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 ACL RUC ACL + RUC/Total Loans ACL + RUC / Total Loans of 1.30% was consistent with linked quarter and lower than the same period a year ago, primarily due to lower specific reserves on non-performing loans Allowance for credit losses to non-performing loans at the end of Q2 2023 was 508% Note: Dollar amounts are in millions (1) Ratio is annualized for interim periods. (2) RUC includes the accrual for off-balance sheet credit risk for unfunded commitments. 8
DEPOSIT TRENDS CROSSFIRST BANKSAHRES INC. Total Deposits and % DDA $4,744 $4,988 $5,651 $5,837 $6,100 $3,581 $3,874 $4,251 $4,867 $5,172 $1,163 $1,114 $1,400 $970 $928 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 DDA Interest-bearing Deposits Cost of Deposits 0.42% 1.20% 2.03% 2.57% 3.33% Total deposits increased 4.5% due to an increase in wholesale funding sources at quarter-end Approximately one-third of the time deposit increase was from new client money & shifts from other deposit categories with the balance representing an increase in wholesale funding Non-interest-bearing deposits stabilized, decreasing 4% from Q1 2023 Cost of deposits increased 76bps this quarter, due to market rate increases and deposit mix changes Non-interest -bearing deposits were 15% of total deposits this quarter Top 25 deposit relationships represent 20% of total deposits Note: Dollars are in millions and amounts shown are as of the end of the period. 9
NET INTEREST MARGIN CROSSFIRST BANKSAHRES INC. Yield on Loans & Cost of Deposits 4.28% 0.42% 5.08% 1.20% 5.93% 2.03% 6.56% 2.57% 6.87% 3.33% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Yield on Loans Cost of Total Deposits Net Interest Margin – Fully Tax Equivalent (FTE)(1) 3.52% 3.56% 3.61% 3.65% 3.27% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Fully tax-equivalent NIM decreased 38bps from Q1 2023 Loan yields increased 31bps in the quarter due to repricing of existing loans and organic growth Cost of deposits increased 76bps from Q1 2023 due to deposit pricing pressure and the decrease in non-interest-bearing deposits experienced late in Q1 2023 that impacted Q2 2023 average balances Loan to deposit ratio decreased to 95% from 97% in Q1 2023 (1) Ratio is annualized for interim periods; the incremental Federal income tax rate used in calculating tax exempt income on a tax equivalent basis is 21.0% 10
NET INTEREST INCOME SENSITIVITY CROSSFIRST BANKSAHRES INC. Net Interest Income Impact From Rate Changes (4.51)% (0.73)% (2.52)% (0.42)% (1.40)% (0.36)% 0.93% (0.14)% 2.19% 0.01% 3.50% 0.17% -300 bps -200 bps -100 bps 100 bps 200 bps 300 bps Rate Shock Rate Ramp Loans: Rate Reset and Cash Flow Profile 59% 10% 9% 19% 3% 1-3 4-12 1-2 2-5 >5 Years Months Months Years Years Roughly 69% of Company’s earning assets reprice or mature over the next 12 months, with 47% in month one Note: Data as of June 30, 2023 * Rate Shock analysis: measures instantaneous parallel shifts in market rates Rate Ramp analysis: rate changes occur gradually over 12 months time Balance sheet size and mix held constant from month end position and includes average YTD loan fees (excluding PPP fees) 11
Expense Management CROSSFIRST BANKSAHRES INC. $29.2 $28.5 $36.4 $38.1 $37.4 $7.1 $5.4 $8.3 $9.6 $7.5 $2.4 $2.1 $3.3 $2.9 $2.7 $2.6 $2.7 $2.8 $3.0 $3.1 $17.1 $18.3 $22.0 $22.6 $24.1 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Salaries & Benefits Occupancy Data Processing, Software & Comm Other Q2 2023 expenses included $0.3 million of acquisition-related expenses, mostly professional fees, and $1.3 million of employee separation costs, compared to $1.5 million of acquisition-related expenses in Q1 2023 Reduced discretionary spending contributed to the decreases in other expenses compared to Q1 2023 Salaries & benefits were higher year over year due the addition of employees as part of the Colorado and New Mexico acquisition and merit increases Identified meaningful non-interest expense savings for the remainder of 2023, advancing our efficiency improvement goal Note: Dollars are in millions and amounts shown are as of the end of the period unless otherwise specified. 12
AMPLE LIQUIDITY AND FLEXIBILITY CROSSFIRST BANKSAHRES INC. Cash and Cash Equivalents L. A Available-for-Sale Securities* Available Brokered Deposits & Wholesale Funding Available Credit Lines, FHLB, and FPB $342M i $744M $372M *■ $1,121 B On-Balance Sheet Liquidity Off-Balance Sheet Liquidity $1.08B + $1.493B Total Liquidity $2.579B 36% of Total Assets *Available-for-Sale Securities $744M = Market Value Net Gain $169M + Pledgeable $282M + Remaining $293M Note: Data as of June 30, 2023 13
SECURITIES PORTFOLIO CROSSFIRST BANKSAHRES INC. MBS (Fixed), 22% Municipal - Taxable, 1% Municipal - Tax -Exempt, 61% CMO (Fixed), 1% SBA (Fixed), 14% Other, 1% Fair Value at June 30, 2023 $744 million At the end of Q2 2023, the portfolio’s duration was approximately 5.3 years The fully tax equivalent yield for Q2 2023 increased 13bps to 3.44% The securities portfolio had net unrealized losses of approximately $78 million as of June 30, 2023 During Q2 2023, $27 million of securities were purchased at an average tax-equivalent yield of 4.72%, and we had $5 million in MBS paydowns 14
2023 GUIDANCE CROSSFIRST BANKSAHRES INC. Business Driver Q1 2023 Q2 2023 Loans 8-10% core loan growth Unchanged Net Interest Margin (NIM) 3.40% to 3.55% 3.20% to 3.35% Non-inter est Expense(1) $35-$36 million per quarter $34-$35 million per quarter Combined ACL / Loans 1.30% to 1.45% Unchanged Effective Tax Rate 20-22% Unchanged (1) Excluding the impact of acquisition -related costs. 15
NON-GAAP RECONCILIATIONS CROSSFIRST BANKSAHRES INC. Adjusted net income: Net income S 16,047 $ 16,108 Add: Acquisition costs 338 1,477 Add: Acquisition - Day 1 CECL provision - - Add: Employee separation 1,300 - Less: Tax effect111 (344) (310) Adjusted net income Preferred stock dividends Diluted weighted average common shares outstanding Diluted earnings per common share Adjusted diluted earnings per common share s s Quarter Ended Six Months Ended (Dollars in thousands, except per share data) $ 11,946 S 17,280 S 15,545 S 32,155 S 32,373 3,570 81 239 1,815 239 4,400 - - - - - - 1,063 1300 1,063 (2,045) (17) (273) (654) (273) % $ $ $ $ Adjusted return on average assets: Net income Adjusted net income Average assets Return on average assets Adjusted return on average assets Quarter Ended Six Months Ended (Dollars in thousands) S 16,047 $ 16,108 S 11,946 $ 17,280 S 15,545 S 32,155 S 32,373 17341 17275 17,871 17,344 16,574 34,616 33,402 $ 6,929,972 $ 6,712,801 S 6,159,783 S 5,764,347 S 5545,657 S 6,821,987 S 5,554,648 1.00 % 1.04 % 1.15 % 1.19 % 120 % 102 % 1.21 % Quarter Ended Six Months Ended (Dollars in thousands) Adjusted return on average equity: Net income $ 16,047 $ 16,108 $ 11,946 $ 17,280 $ 15,545 $ 32,155 S 32,373 Adjusted net income 17341 17275 17,871 17,344 16,574 34,616 33,402 Average equity $ 647,491 S 620,210 $ 589,587 $ 613206 S 614,541 S 633,926 S 634,036 Return on average equity Adjusted return on average equity Represents the tax impact of the adjustments at a tax rate of 21.0%, plus permanent tax expense associated with merger related transactions. 16
NON-GAAP RECONCILIATIONS CROSSFIRST BANKSAHRES INC. 6/30/2023 Tangible common stockholders’ equity: Total stockholders' equity $ 651,483 Less:goodwill and other intangible assets 27,457 Less: preferred stock 7,750 Tangible common stockholders’ equity Tangible book value per common share: Tangible common stockholders' equity $ 616,276 Common shares outstanding at end of period 48,653,487 Book value per common share Tangible book value per common share Quarter Ended 3/31/2023 12/31/2023 9/30/2022 6/30/202T {Dollars in thousands, except per s h ere doto/ $ 645,491 28,259 7,750 $ 609,482 48,600,618 $ 608,599 29,081 $ 579,518 48,448215 $ 580,547 71 $ 580,476 48,787,696 $ 608,016 91 $ 607,925 49,535,949 Six Months Ended Quarter Ended 6/30/2 023 3/31/2023 12/31/202 3 9/30/20 22 6/30/2022 6/30/2023 6/30/2023 (Dollars in thousands) Adjusted Efficiency Ratio - Fully Tax Equivalent (FTE)1'1 Non-interest expense Less: Acquisition costs Less: Core deposit intangible amortization Less: Employee separation $ 37,412 $ (338) (802) (1.300) 38,092 $ (1.477) (822) 36,423 $ (3570) (291) 28,451 $ (81) 29203 (239) (1.065) $ 75504 $ (1.815) 0.624) (1.300) 56,869 (239) 0.063) Adjusted Non-interest expense (numerator) $ 34,972 $ 35,793 $ 32562 $ 28,370 $ 27,901 s 70,765 $ 55,567 Net interest income 54,539 58,221 54,015 49,695 46,709 112,760 89,824 Tax equivalent interest income(l) 750 797 818 820 808 1547 1,583 Non-interest income (loss) 5,779 4,421 4559 3,780 4201 10,200 9,143 Total tax-equivalent income (denominator) $ S Efficiency Ratio Adjusted Efficiency Ratio - Fully Tax Equivalent (FTE)1'1 (1) Tax exempt income (tax-free municipal securities) is calculated on a tax equivalent basis. The incremental rate used is 21.0%. 17