UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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(
)
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(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):
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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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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.
Explanatory Note
Item 2.02.
Results of Operations and Financial Condition.
On October 17, 2022, the Company issued the Initial Form 8-K, including the Earnings Release and Investor Presentation. The Company
subsequently identified errors in the presentation of income on tax-exempt securities included in Tables 3 and 4 of the Earnings Release.
The Company has historically presented these amounts on a tax-equivalent basis. Income on tax-exempt securities reported in Tables 3
and 4 of the Earnings Release were not presented on a tax-equivalent basis for the three and nine months ended September 30, 2022, but
were presented on this basis for the historical comparative periods. In addition, as previously disclosed, the Company modified its yield
calculation on its available-for-sale portfolio to better conform to peer disclosures in the first quarter of 2022. Income on tax-exempt
securities reported in Tables 3 and 4 of the Earnings Release were not presented using this updated methodology for the three and nine
months ended September 30, 2021, but were presented using this updated methodology for the three and nine months ended September 30,
2022. The Company is filing this Form 8-K/A to correct the foregoing errors included in the Earnings Release. The Company is not
revising the Investor Presentation previously filed with the Initial Form 8-K.
Copies of the Earnings Release and Tables 3 and 4 of the Earnings Release, each as revised to reflect the changes described above, are
attached hereto as Exhibits 99.1 and 99.2, respectively, each of which are incorporated herein by reference. A copy of the Investor
Presentation previously filed with the Initial Form 8-K is reattached hereto as Exhibit 99.3 and incorporated herein by reference. This
Form 8-K/A is not intended to, nor does it, reflect events occurring after the filing of the Initial Form 8-K, and the Earnings Release and
Investor Presentation are not being modified or updated in any way other than to reflect the changes to Tables 3 and 4 of the Earnings
Release.
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 set forth by specific reference in such a
filing.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits
99.1
99.2
99.3
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:
October 20, 2022
CROSSFIRST BANKSHARES, INC.
By:
/s/ Benjamin R. Clouse
Benjamin R. Clouse
Chief Financial Officer
Exhibit 99.1
1
October 17, 2022 (as revised October 20, 2022)*
CrossFirst Bankshares, Inc. Reports Third Quarter 2022
Results
Third Quarter 2022 Key Financial Performance Metrics
Net Income
ROAA
Net Interest Margin
(FTE)
Diluted EPS
ROE
$17.3 million
1.19%
3.56%
(1)(2)
$0.35
11.18%
LEAWOOD, Kan., October 17, 2022 (GLOBE NEWSWIRE) -- CrossFirst Bankshares, Inc. (Nasdaq: CFB), the bank holding company
for CrossFirst Bank, today reported operating results for the third quarter of 2022, with third quarter net income of $17.3 million, or $0.35
per diluted share, and year-to-date net income of $49.7 million, or $0.99 per diluted share.
CEO Commentary:
"As we reflect on our 15
th
created since our de novo start in 2007,” said CrossFirst’s CEO and President, Mike Maddox. “Our people drive our success and I’m
excited about the many expanded roles we announced this quarter and this team that will lead us forward.”
2022 Third Quarter Highlights:
•
$5.8 billion of assets with 5% operating revenue
(3)
•
$149 million or 3.3% of total loan growth from the previous quarter and $445 million or 10.5% loan growth from the same
quarter last year. Excluding PPP loans
(4)
, loan growth was $157 million from the previous quarter or 3.5% and was $547
million or 13.3% from the same quarter last year
•
Continued improvement in credit quality during the third quarter of 2022 as evidenced by the decrease in non-performing
assets to total assets ratio from 0.92% at September 30, 2021 to 0.31% at September 30, 2022
•
Return on Average Assets of 1.19% and a Return on Equity of 11.18% for the quarter ended September 30, 2022
•
Net Interest Margin (Fully Tax-Equivalent)
(1)(2)
the same quarter last year
Quarter-to-Date
Year-to-Date
September 30,
September 30,
(Dollars in millions except per share data)
2022
2021
2022
2021
Operating revenue
(3)
$
53.5
$
40.7
$
152.4
$
134.1
Net income
$
17.3
$
21.0
$
49.7
$
48.6
Diluted earnings per share
$
0.35
$
0.41
$
0.99
$
0.93
Return on average assets
1.19
%
1.54
%
1.18
%
1.16
%
Return on average common equity
11.18
%
12.92
%
10.59
%
10.24
%
Net interest margin
(1)
3.50
%
3.17
%
3.40
%
3.07
%
Net interest margin, fully tax-equivalent
(1)(2)
3.56
%
3.23
%
3.46
%
3.12
%
Efficiency ratio
53.20
%
59.06
%
55.97
%
54.18
%
Non-GAAP core operating efficiency ratio, fully tax-equivalent
(2)(4)
52.32
%
50.45
%
54.61
%
51.15
%
(1)
The Company changed the annualization method on the available-for-sale securities portfolio from Actual/Actual to 30/360 and moved the unrealized
gain(loss) on available-for-sale securities from an interest-earning asset to a non-interest earning asset. All periods presented reflect this change.
(2)
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%
(3)
Net interest income plus non-interest income
(4)
Represents a non-GAAP measure. See "Table 5. Non-GAAP Financial Measures" for a reconciliation of these measures.
* This earnings release has been revised as described in the “Explanatory Note” to the Form 8-K/A of CrossFirst Bankshares, Inc. furnished to the SEC on
October 20, 2022.
CROSSFIRST BANKSHARES, INC.
2
Income from Operations
Net Interest Income
Interest income was $65.6 million for the third quarter of 2022, an increase of 39% from the third quarter of 2021 and an increase of 24%
from the previous quarter due to higher average loans outstanding and higher interest rates. Included in interest income for the third quarter
of 2022 was interest of $1 million as a result of several loans returning to accruing status. Average earning assets totaled $5.6 billion for
the third quarter of 2022, an increase of $359 million or 7% from the same quarter in 2021. This increase in average earning assets was due
to an increase in average loans of $396 million.
Interest expense for the third quarter of 2022 was $15.9 million, which increased 159% from the prior quarter and 188% from the same
quarter in 2021 due to significant changes in market rates in 2022. Average interest-bearing deposits increased to $3.8 billion in the third
quarter of 2022, a 7% increase from the same prior year period. The cost of funds increased from the previous quarter to 1.23%, compared
to 0.46% for the third quarter of 2021 driven by the higher interest rate environment.
Net interest income totaled $49.7 million for the third quarter of 2022, which was 6% higher than the second quarter of 2022, and 19%
higher than the third quarter of 2021. Tax-equivalent net interest margin increased to 3.56% in the current quarter from 3.52% in the
previous quarter and 3.23% in the third quarter of 2021. The income recorded from loans returning to accruing status increased the tax
equivalent margin by 7 basis points in the current quarter. The tax-equivalent adjustment, which accounts for income taxes saved on the
interest earned on non-taxable securities and loans, was $0.8 million for the third quarter of 202 2.
Non-Interest Income
Non-interest income increased by $4.9 million in the third quarter of 2022 compared to the same quarter of 2021 and decreased $0.4
million compared to the second quarter of 2022. The decrease in non-interest income compared to the previous quarter was due to $0.2
million in lower credit card fees and $0.3 million in lower letter of credit fees, partially offset by higher analysis fees. The increase in non-
interest income compared to the prior year was primarily the result of a $6.2 million impairment loss on an equity investment that was
received as part of a restructured loan agreement in the prior year. This variance was partially offset by increases in gains on available for
sale securities of $1.0 million and an increase in analysis fees of $0.4 million.
Non-Interest Expense
Non-interest expense for third quarter of 2022 was $28.5 million, which increased 18% compared to the third quarter of 2021, and
decreased 3% from the second quarter of 2022. Salaries and benefit costs were higher in the current quarter by $1.2 million compared to
the prior quarter due to hiring in new markets and lines of business, severance payments recorded in the third quarter and increased
incentive compensation expense related to performance. Furthermore, deposit insurance premiums increased $0.2 million which were
offset by decreases of $0.5 million in professional fees and $0.3 million in data processing costs. Other non -interest expenses were lower
by $1.5 million as a result of a $1.1 million employee separation expense recorded in the second quarter of 2022. Compared to the same
quarter of 2021, salaries and benefits were up $2.9 million primarily because of increased hiring for market and line of business expansion.
CrossFirst’s effective tax rate for the third quarter of 2022 was 20.3%, as compared to 21.2% for the third quarter of 2021 and 20.6% in the
second quarter of 2022. For both comparable periods, the Company conti nued to benefit from its tax-exempt municipal bond portfolio and
bank-owned life insurance. The tax-exempt benefit diminishes as the Company’s ratio of taxable income to tax-exempt income increases.
CROSSFIRST BANKSHARES, INC.
3
Balance Sheet Performance & Analysis
During the third quarter of 2022, total assets increased by $141 million or 3% compared to June 30, 2022, and increased $448 million or
8% compared to September 30, 2021. Total assets increased on a linked quarter basis primarily due to a $149 million increase in loans. The
year-over-year increase was due to an increase in loans of $453 million. Non-interest-bearing deposits decreased $50 million compared to
June 30, 2022, and increased $153 million from September 30, 2021. During the third quarter of
2022
, available-for-sale investment
securities decreased $39 million to $657 million compared to June 30, 2022 primarily due to unrealized losses from interest rate increases.
The securities yields remained consistent at a tax equivalent yield of 3.07% for the third quarter of 2022 compared to the prior quarter.
Loan Results
During the third quarter of 2022, the Company produced an increase in average loans of $189 million compared to the second quarter of
2022, and an increase of $396 million or 9% compared to the third quarter of 2021. The linked quarter increase in average loans was
primarily a result of growth in the commercial and commercial real estate portfolios. Loan yields increased 80 basis points to 5.08%
during the third quarter of 2022 and increased 108 basis points compared to the same prior year quarter.
3Q22
2Q22
1Q22
4Q21
3Q21
QoQ
Growth
($)
QoQ
Growth
(%)
(1)
YoY
Growth
($)
YoY
Growth
(%)
(1)
(Dollars in millions)
Average loans (gross)
Commercial
$
1,630
$
1,532
$
1,434
$
1,328
$
1,233
$
98
6
%
$
397
32
%
Energy
211
241
274
290
311
(30)
(12)
(100)
(32)
Commercial real estate
1,439
1,399
1,327
1,272
1,213
40
3
226
19
Construction and land development
633
581
593
579
611
52
9
22
4
Residential and multifamily real estate
644
609
604
612
659
35
6
(15)
(2)
Paycheck Protection Program
6
20
42
84
147
(14)
(71)
(141)
(96)
Consumer
64
56
59
56
57
8
14
7
12
Total
$
4,627
$
4,438
$
4,333
$
4,221
$
4,231
$
189
4
%
$
396
9
%
Yield on average loans for the period
ending
5.08
%
4.28
%
4.00
%
4.17
%
4.00
%
(1)
Actual unrounded values are used to calculate the reported percent disclosed. Accordingly, recalculations using the amounts in millions as disclosed in this release may not
produce the same amounts.
Deposit & Other Borrowing Results
During the third quarter of 2022, the Company produced an increase in average deposits of 8% compared to the previous quarter, and an
increase of 11% in average deposits compared to the third quarter of 2021. The deposit increase for the current quarter and the same
quarter in the prior year was driven by increases in transaction, saving and money market, and time deposits. As a result of the increasing
interest rate environment, the Company had an increase of 78 basis points in the overall cost of deposits during the third quarter of 2022,
and an increase of 82 basis points in the last twelve months.
3Q22
2Q22
1Q22
4Q21
3Q21
QoQ
Growth
($)
QoQ
Growth
(%)
(1)
YoY
Growth
($)
YoY
Growth
(%)
(1)
(Dollars in millions)
Average deposits
Non-interest bearing deposits
$
1,138
$
1,150
$
1,157
$
1,058
$
910
$
(12)
(1)
%
$
228
25
%
Transaction deposits
531
507
586
543
511
24
5
20
4
Savings and money market deposits
2,520
2,334
2,303
2,272
2,276
186
8
244
11
Time deposits
734
560
587
662
752
174
31
(18)
(2)
Total
$
4,923
$
4,551
$
4,633
$
4,535
$
4,449
$
372
8
%
$
474
11
%
Cost of deposits for the period ending
1.20
%
0.42
%
0.31
%
0.33
%
0.38
%
Cost of interest-bearing deposits for the
period ending
1.56
%
0.56
%
0.41
%
0.43
%
0.47
%
(1)
Actual unrounded values are used to calculate the reported percent disclosed. Accordingly, recalculations using the amounts in millions as disclosed in this release may
not produce the same amounts.
At September 30, 2022, other borrowings totaled $206 million, as compared to $298 million at June 30, 2022, and $278 million at
September 30, 2021.
CROSSFIRST BANKSHARES, INC.
4
Asset Quality Position
Non-performing assets decreased to $18.2 million at September 30, 2022 due to a $10.8 million decrease in non-accrual loans. The decline
is attributable primarily to decreases in non-accrual commercial and industrial and commercial real estate loans. The non -performing
assets to total assets ratio decreased from 0.92% at September 30, 2021 to 0.31% at September 30, 2022. Classified loans decreased
slightly during the third quarter due to reductions in classified commercial real estate loans, bringing the ratio of classified loans to total
capital plus the allowance for credit losses to 11.3%.
The allowance for credit losses was $55.9 million or 1.19% of outstanding loans and 324% of non-accruing loans at September 30, 2022.
The combined allowance for credit losses and accrual for off-balance sheet credit risk from unfunded commitments (“RUC”) was $62.6
million or 1.34% of outstanding loans.
The allowance for credit losses to total loans decreased to 1.19% at September 30, 2022 from 1.23% at June 30, 2022. The improvements
in credit metrics compared to September 30, 2021 were primarily driven by upgrades restoring loans to an accruing status in the
commercial and industrial and commercial real estate portfolios. Net charge-offs were $1.9 million for the third quarter of 2022 and
increased by $0.8 million from the prior quarter. The charge-offs for the current quarter were primarily related to commercial and
industrial and energy credits. The following table provides information regarding asset quality.
Asset quality
3Q22
2Q22
1Q22
4Q21
3Q21
Non-accrual loans
$
16.9
$
27.7
$
33.1
$
31.4
$
48.1
Other real estate owned
1.0
1.0
1.0
1.1
1.1
Nonperforming assets
18.2
30.8
35.6
32.7
49.8
Loans 90+ days past due and still accruing
0.3
2.2
1.5
0.1
0.5
Loans 30 - 89 days past due
21.4
16.6
15.9
3.5
37.6
Net charge-offs (recoveries)
1.9
1.1
1.1
0.8
1.3
Asset quality metrics
(%)
3Q22
2Q22
1Q22
4Q21
3Q21
Nonperforming assets to total assets
0.31
%
0.54
%
0.64
%
0.58
%
0.92
%
Allowance for credit loss to total loans
1.19
1.23
1.27
1.37
1.51
Allowance for credit loss + RUC to total loans
(1)
1.34
1.35
1.38
-
-
Allowance for credit loss to nonperforming loans
324
187
160
185
132
Net charge-offs (recoveries) to average loans
(2)
0.16
0.10
0.10
0.07
0.13
Provision to average loans
(2)
0.29
0.19
(0.06)
(0.47)
(0.94)
Classified Loans / (Total Capital + ACL)
11.3
12.1
10.8
10.8
17.3
Classified Loans / (Total Capital + ACL + RUC)
(1)
11.2
12.0
10.7
-
-
(1)
Includes the accrual for off-balance sheet credit risk from unfunded commitments that resulted from CECL adoption on January 1, 2022.
(2)
Interim periods annualized.
Capital Position
At September 30, 2022, stockholders' equity totaled $581 million, or $11.90 per share, compared to $668 million, or $13.23 per share, at
December 31, 2021. During the third quarter of 2022, CrossFirst continued its share repurchase program by purchasing 794,457 shares of
common stock outstanding. In addition, accumulated other comprehensive (loss) income declined by $106 million between December 31,
2021 and September 30, 2022; driven by a $102 million decrease in the unrealized (loss) gain on available-for-sale securities, net of tax.
The ratio of common equity Tier 1 capital to risk-weighted assets was approximately 11% and the ratio of total capital to risk-weighted
assets was approximately 12% at September 30, 2022. The Company remains well-capitalized.
CROSSFIRST BANKSHARES, INC.
5
Conference Call and Webcast
CrossFirst Bankshares, Inc. (Nasdaq: CFB), the parent company of CrossFirst Bank, will host a conference call to review third quarter
financial results on Tuesday, October 18, 2022, at 10 a.m. CT / 11 a.m. ET. To access the event by telephone, please dial
(
833) 630-1956 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) 317-1837 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/6enfwdfg. 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 6898896. 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, 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 “believes,” “could,” “will,” 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, credit quality and risk, ongoing impact of the COVID-19 pandemic, industry
and technological changes, cyber incidents or other failures, disruptions or security breaches, interest rates, commercial and residential real
estate values, economic and market conditions in the United States or internationally, funding availability, accounting estimates and risk
management processes, the transition away from the London Interbank Offered Rate (LIBOR), legislative and regulatory changes,
business strategy execution, hiring and retention of key personnel, competition, mortgage markets, fraud committed against the Company,
environmental liability and severe weather, natural disasters, acts of war or terrorism or other external events. These and other factors that
could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and
uncertainties that may affect our business, can be found in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and in
other filings we make with the Securities and Exchange Commission. These forward-looking statements are made as of the date 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, which is headquartered in Leawood, Kansas. CrossFirst Bank has nine full-service banking locations in
Kansas, Missouri, Oklahoma, Texas, and Arizona that offer products and services to businesses, professionals, individuals, and families.
INVESTOR CONTACT
Heather Worley
Heather@crossfirst.com
(214)676-4666
https://investors.crossfirstbankshares.com
CROSSFIRST BANKSHARES, INC.
6
Unaudited Financial Tables
◦
◦
◦
◦
◦
CROSSFIRST BANKSHARES, INC.
7
TABLE 1. CONSOLIDATED BALANCE SHEETS
September 30, 2022
December 31, 2021
(1)
(Unaudited)
(Dollars in thousands)
Assets
Cash and cash equivalents
$
309,135
$
482,727
Available-for-sale securities - taxable
174,004
192,146
Available-for-sale securities - tax-exempt
482,523
553,823
Loans, net of unearned fees
4,677,646
4,256,213
Allowance for credit losses on loans
(2)
55,864
58,375
Loans, net of the allowance for credit losses on loans
4,621,782
4,197,838
Premises and equipment, net
64,313
66,069
Restricted equity securities
9,277
11,927
Interest receivable
20,553
16,023
Foreclosed assets held for sale
973
1,148
Bank-owned life insurance
68,698
67,498
Other
97,719
32,258
Total assets
$
5,848,977
$
5,621,457
Liabilities and stockholders’ equity
Deposits
Non-interest-bearing
$
1,113,934
$
1,163,224
Savings, NOW and money market
3,123,410
2,895,986
Time
750,171
624,387
Total deposits
4,987,515
4,683,597
Federal Home Loan Bank advances
205,349
236,600
Other borrowings
1,048
1,009
Interest payable and other liabilities
74,518
32,678
Total liabilities
5,268,430
4,953,884
Stockholders’ equity
Common stock, $0.01 par value:
authorized - 200,000,000 shares, issued - 53,018,448 and 52,590,015 shares at
September 30, 2022 and December 31, 2021, respectively
530
526
Treasury stock, at cost:
4,230,752 and 2,139,970 shares held at September 30, 2022 and December 31,
2021, respectively
(59,328)
(28,347)
Additional paid-in capital
529,646
526,806
Retained earnings
194,148
147,099
Accumulated other comprehensive (loss) income
(84,449)
21,489
Total stockholders’ equity
580,547
667,573
Total liabilities and stockholders’ equity
$
5,848,977
$
5,621,457
(1)
The year-end Condensed Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures
required by accounting principles generally accepted in the United States of America.
(2)
As of December 31, 2021, this line represents the allowance for loan and lease losses.
CROSSFIRST BANKSHARES, INC.
8
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
(Dollars in thousands except per share data)
Interest Income
Loans, including fees
$
59,211
$
42,664
$
149,266
$
130,268
Available-for-sale securities - taxable
1,119
803
3,250
2,423
Available-for-sale securities - tax-exempt
3,905
3,562
11,442
10,410
Deposits with financial institutions
1,193
121
1,714
359
Dividends on bank stocks
122
161
478
488
Total interest income
65,550
47,311
166,150
143,948
Interest Expense
Deposits
14,909
4,211
23,152
14,789
Fed funds purchased and repurchase agreements
9
-
83
3
Federal Home Loan Bank Advances
898
1,275
3,302
3,838
Other borrowings
39
24
94
72
Total interest expense
15,855
5,510
26,631
18,702
Net Interest Income
49,695
41,801
139,519
125,246
Provision for Credit Losses
(1)
3,334
(10,000)
4,844
1,000
Net Interest Income after Provision for Credit Losses
(1)
46,361
51,801
134,675
124,246
Non-Interest Income
Service charges and fees on customer accounts
1,566
1,196
4,520
3,330
Realized (losses) gains on available-for-sale securities
(4)
1,046
(43)
1,043
Unrealized gains (losses) on equity securities, net
(87)
(6,210)
(261)
(6,243)
Income from bank-owned life insurance
405
427
1,200
3,088
Swap fees and credit valuation adjustments, net
(7)
31
123
156
ATM and credit card interchange income
1,326
1,735
5,513
5,569
Other non-interest income
581
670
1,870
1,921
Total non-interest income
3,780
(1,105)
12,922
8,864
Non-Interest Expense
Salaries and employee benefits
18,252
15,399
53,288
44,612
Occupancy
2,736
2,416
7,851
7,307
Professional fees
580
618
2,453
2,538
Deposit insurance premiums
903
927
2,355
2,995
Data processing
877
700
2,849
2,136
Advertising
796
596
2,247
1,334
Software and communication
1,222
999
3,689
3,098
Foreclosed assets, net
9
(35)
(30)
680
Other non-interest expense
3,076
2,416
10,617
7,967
Total non-interest expense
28,451
24,036
85,319
72,667
Net Income Before Taxes
21,690
26,660
62,278
60,443
Income tax expense
4,410
5,660
12,625
11,831
Net Income
$
17,280
$
21,000
$
49,653
$
48,612
Basic Earnings Per Share
$
0.35
$
0.41
$
1.00
$
0.95
Diluted Earnings Per Share
$
0.35
$
0.41
$
0.99
$
0.93
(1)
For the three and nine-months ended September 30, 2021, this line represents the provision for loan and lease losses.
CROSSFIRST BANKSHARES, INC.
9
TABLE 3. YEAR-TO-DATE ANALYSIS OF CHANGES IN NET INTEREST
INCOME
(UNAUDITED)
Nine Months Ended
September 30,
2022
2021
Average
Balance
Interest
Income /
Expense
Average
Yield /
Rate
(4)
Average
Balance
Interest
Income /
Expense
Average
Yield /
Rate
(4)
(Dollars in thousands)
Interest-earning assets:
Securities - taxable
(1)
$
218,421
$
3,728
2.28
%
$
203,633
$
2,911
1.91
%
Securities - tax-exempt
(1)(2)
549,490
13,845
3.36
476,980
12,596
3.52
Federal funds sold
-
-
-
-
-
-
Interest-bearing deposits in other banks
246,213
1,714
0.93
390,588
359
0.12
Gross loans, net of unearned income
(3)
4,466,887
149,266
4.47
4,381,213
130,268
3.98
Total interest-earning assets
(1)(2)
5,481,011
$
168,553
4.11
%
5,452,414
$
146,134
3.58
%
Allowance for credit losses
(57,213)
(76,726)
Other non-interest-earning assets
201,519
249,816
Total assets
$
5,625,317
$
5,625,504
Interest-bearing liabilities
Transaction deposits
$
541,933
$
2,134
0.89
%
$
629,959
$
936
0.20
%
Savings and money market deposits
2,386,205
15,285
0.86
2,360,559
6,402
0.36
Time deposits
627,458
5,733
1.22
863,592
7,451
1.15
Total interest-bearing deposits
3,555,596
23,152
0.87
3,854,110
14,789
0.51
FHLB and short-term borrowings
241,897
3,384
1.87
285,371
3,841
1.80
Trust preferred securities, net of fair value
adjustments
1,024
94
12.29
976
72
9.80
Non-interest-bearing deposits
1,148,150
-
-
814,924
-
-
Cost of funds
4,946,667
$
26,631
0.72
%
4,955,381
$
18,702
0.50
%
Other liabilities
51,634
35,385
Stockholders’ equity
627,016
634,738
Total liabilities and stockholders' equity
$
5,625,317
$
5,625,504
Net interest income
(2)
$
141,922
$
127,432
Net interest spread
(1)(2)
3.39
%
3.08
%
Net interest margin
(1)(2)
3.46
%
3.12
%
(1)
(loss) on available-for-sale securities from an interest-earning asset to a non-interest-earning asset. All periods presented reflect this change.
(2)
rate used is 21.0%.
(3)
Average gross loan balances include non-accrual loans.
(4)
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
YEAR-TO-DATE VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED)
Nine Months Ended
September 30, 2022 over 2021
Average Volume
Yield/Rate
Net Change
(2)
(Dollars in thousands)
Interest Income
Securities - taxable
$
222
$
595
$
817
Securities - tax-exempt
(1)
1,840
(591)
1,249
Federal funds sold
-
-
-
Interest-bearing deposits in other banks
(176)
1,531
1,355
Gross loans, net of unearned income
2,604
16,394
18,998
Total interest income
(1)
4,490
17,929
22,419
Interest Expense
Transaction deposits
(207)
1,405
1,198
Savings and money market deposits
69
8,814
8,883
Time deposits
(2,145)
427
(1,718)
Total interest-bearing deposits
(2,283)
10,646
8,363
FHLB and short-term borrowings
(601)
145
(456)
Trust preferred securities, net of fair value adjustments
4
18
22
Total interest expense
(2,880)
10,809
7,929
Net interest income
(1)
$
7,370
$
7,120
$
14,490
(1)
(2)
CROSSFIRST BANKSHARES, INC.
11
TABLE 4. 2021 - 2022 QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME
(UNAUDITED)
Three Months Ended
September 30,
2022
2021
Average
Balance
Interest
Income /
Expense
Average
Yield /
Rate
(4)
Average
Balance
Interest
Income /
Expense
Average
Yield /
Rate
(4)
(Dollars in thousands)
Interest-earning assets:
Securities - taxable
(1)
$
213,775
$
1,241
2.32
%
$
191,636
$
964
2.01
%
Securities - tax-exempt
(1)(2)
560,541
4,725
3.37
502,107
4,310
3.43
Federal funds sold
-
-
-
-
-
-
Interest-bearing deposits in other banks
231,345
1,193
2.05
313,188
121
0.15
Gross loans, net of unearned income
(3)
4,626,684
59,211
5.08
4,230,553
42,664
4.00
Total interest-earning assets
(1)(2)
5,632,345
$
66,370
4.68
%
5,237,484
$
48,059
3.64
%
Allowance for credit losses
(56,995)
(75,103)
Other non-interest-earning assets
188,997
246,603
Total assets
$
5,764,347
$
5,408,984
Interest-bearing liabilities
Transaction deposits
$
531,999
$
1,539
1.95
%
$
510,823
$
259
0.20
%
Savings and money market deposits
2,519,574
10,568
1.66
2,276,436
1,907
0.33
Time deposits
733,607
2,802
1.52
752,012
2,045
1.08
Total interest-bearing deposits
3,785,180
14,909
1.56
3,539,271
4,211
0.47
FHLB and short-term borrowings
165,196
908
2.18
278,154
1,275
1.82
Trust preferred securities, net of fair value
adjustments
1,037
38
14.58
988
24
9.63
Non-interest-bearing deposits
1,137,626
-
-
909,750
-
-
Cost of funds
5,089,039
$
15,855
1.23
%
4,728,163
$
5,510
0.46
%
Other liabilities
62,102
36,106
Stockholders’ equity
613,206
644,715
Total liabilities and stockholders' equity
$
5,764,347
$
5,408,984
Net interest income
(2)
$
50,515
$
42,549
Net interest spread
(1)(2)
3.45
%
3.18
%
Net interest margin
(1)(2)
3.56
%
3.23
%
(1)
(loss) on available-for-sale securities from an interest-earning asset to a non-interest-earning asset. All periods presented reflect this change.
(2)
rate used is 21.0%.
(3)
Average loan balances include non-accrual loans.
(4)
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.
12
QUARTER-TO-DATE VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED)
Three Months Ended
September 30, 2022 over 2021
Average Volume
Yield/Rate
Net Change
(2)
(Dollars in thousands)
Interest Income
Securities - taxable
$
119
$
158
$
277
Securities - tax-exempt
(1)
501
(86)
415
Federal funds sold
-
-
-
Interest-bearing deposits in other banks
(39)
1,111
1,072
Gross loans, net of unearned income
4,251
12,296
16,547
Total interest income
(1)
4,832
13,479
18,311
Interest Expense
Transaction deposits
5
1,275
1,280
Savings and money market deposits
223
8,438
8,661
Time deposits
(49)
806
757
Total interest-bearing deposits
179
10,519
10,698
FHLB and short-term borrowings
(583)
216
(367)
Trust preferred securities, net of fair value adjustments
1
13
14
Total interest expense
(403)
10,748
10,345
Net interest income
(1)
$
5,235
$
2,731
$
7,966
(1)
(2)
CROSSFIRST BANKSHARES, INC.
13
TABLE 5. NON-GAAP FINANCIAL MEASURES
Non-GAAP Financial Measures
In addition to disclosing financial measures determined in accordance with GAAP, the Company discloses non-GAAP financial measures
in this release. The Company believes that the non-GAAP financial measures presented in this release reflect industry conventions, or
standard measures within the industry, and provide useful information to the Company's management, investors and other parties
interested in the Company's operating performance. These measurements should be considered in addition to, but not as a substitute for,
financial information prepared in accordance with GAAP. We have defined below each of the non-GAAP measures we use in this release,
but these measures may not be synonymous to similar measurement terms used by other companies.
CrossFirst provides reconciliations (unaudited) of these non-GAAP measures below. The measures used in this release include the
following:
•
We calculate ‘‘non-GAAP core operating income’’ as net income adjusted to remove non-core income and expense items
related to:
▪
Acquisition costs - We incurred expenses during the second and third quarter of 2022 related to the announced acquisition of
Central Bancorp, Inc.’s bank subsidiary, Farmers & Stockmens Bank.
▪
Employee separation - During the quarter ended June 30, 2022, the Company recorded $1.1 million expense related to
employee separation.
▪
Charges and adjustments associated with the full vesting of a former executive - We incurred additional charges in the second
quarter of 2021 related to the acceleration of $0.7 million of certain cash, stock-based compensation, and employee costs.
▪
Bank Owned Life Insurance - We obtain bank owned life insurance on key employees throughout the organization and
received a $1.8 million benefit in the second quarter of 2021.
▪
Unrealized loss on equity security - During the quarter ended September 30, 2021, the Company recorded a $6.2 million
impairment loss related to an equity investment that was received as part of a restructured loan agreement.
The most directly comparable GAAP financial measure for non-GAAP core operating income is net income.
Management
believes that non-GAAP core operating income removes events that are not part of core business activities and are useful
analytical tools for investors to compare periods excluding these non-core expenses and charges.
•
We calculate "non-GAAP core operating return on average assets" as non-GAAP core operating income (as defined above)
divided by average assets. The most directly comparable GAAP financial measure is return on average assets, which is
calculated as net income divided by average assets. Management believes that non-GAAP core operating return on average
assets removes events that are not part of core business activities and are useful analytical tools for investors to compare
periods excluding these non-core expenses and charges.
•
We calculate "tangible common stockholders' equity" as total stockholders' equity less goodwill and intangibles and
preferred equity. The most directly comparable GAAP measure is total stockholders' equity. Management believes that
tangible stockholders’ equity is important to many investors in the marketplace who are interested in changes from period to
period in our stockholders’ equity, exclusive of changes in intangible assets.
•
We calculate ‘‘tangible book value per share’’ as tangible common stockholders' equity (as defined above) divided by the
total number of shares outstanding. The most directly comparable GAAP measure is book value per share.
Management
believes that tangible book value per share is important to many investors in the marketplace who are interested in changes
from period to period in our stockholders’ equity, exclusive of changes in intangible assets.
•
We calculate ‘‘non-GAAP loan growth, excluding PPP loans’’ as gross loans, net of unearned income subtracted by PPP
loans, net of unearned income. Management believes that loan growth, excluding PPP loans is important to investors
because it is a better representation of the overall loan portfolio activity when comparing between periods.
•
We calculate "non-GAAP core operating efficiency ratio - fully tax equivalent (FTE)" as non-interest expense adjusted to
remove non-core, non-interest expenses as defined above under non-GAAP core operating income divided by net interest
income on a fully tax-equivalent basis plus non-interest income adjusted to remove non-core, non-interest income as defined
above under non-GAAP core operating income. The most directly comparable financial measure is the efficiency ratio.
Management believes that the non-GAAP core operating efficiency ratio is important to many investors because the ratio
removes events that are not part of core business activities and is a useful analytical tool.
CROSSFIRST BANKSHARES, INC.
14
Quarter Ended
Nine Months Ended
9/30/2022
6/30/2022
3/31/2022
12/31/2021
9/30/2021
9/30/2022
9/30/2021
(Dollars in thousands)
Non-GAAP core operating income:
Net income
$
17,280
$
15,545
$
16,828
$
20,801
$
21,000
$
49,653
$
48,612
Add: Acquisition costs
81
239
-
-
-
320
-
Less: Tax effect
(2)
17
50
-
-
-
67
-
Acquisition costs, net of tax
64
189
-
-
-
253
-
Add: Employee separation
-
1,063
-
-
-
1,063
-
Less: Tax effect
(2)
-
223
-
-
-
223
-
Employee separation, net of tax
-
840
-
-
-
840
-
Add: Unrealized loss on equity security
-
-
-
-
6,200
-
6,200
Less: Tax effect
(2)
-
-
-
-
1,302
-
1,302
Unrealized loss on equity security, net of tax
-
-
-
-
4,898
-
4,898
Add: Accelerated employee benefits
-
-
-
-
-
-
719
Less: Tax effect
(3)
-
-
-
-
-
-
210
Accelerated employee benefits, net of tax
-
-
-
-
-
-
509
Less: BOLI settlement benefits
(1)
-
-
-
-
-
-
1,841
Non-GAAP core operating income
$
17,344
$
16,574
$
16,828
$
20,801
$
25,898
$
50,746
$
52,178
(1)
No tax effect.
(2)
Represents the tax impact of the adjustments at a tax rate of 21.0%.
(3)
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.
Quarter Ended
Nine Months Ended
9/30/2022
6/30/2022
3/31/2022
12/31/2021
9/30/2021
9/30/2022
9/30/2021
(Dollars in thousands)
Non-GAAP core operating return on average assets:
Net income
$
17,280
$
15,545
$
16,828
$
20,801
$
21,000
$
49,653
$
48,612
Non-GAAP core operating income
17,344
16,574
16,828
20,801
25,898
50,746
52,178
Average assets
$
5,764,347
$
5,545,657
$
5,563,738
$
5,490,482
$
5,408,984
$
5,625,317
$
5,625,504
Return on average assets
1.19
%
1.12
%
1.23
%
1.50
%
1.54
%
1.18
%
1.16
%
Non-GAAP core operating return on average assets
1.19
%
1.20
%
1.23
%
1.50
%
1.90
%
1.21
%
1.24
%
CROSSFIRST BANKSHARES, INC.
15
Quarter Ended
9/30/2022
6/30/2022
3/31/2022
12/31/2021
9/30/2021
(Dollars in thousands except per share data)
Tangible common stockholders' equity:
Total stockholders' equity
$
580,547
$
608,016
$
623,199
$
667,573
$
652,407
Less: goodwill and other intangible assets
71
91
110
130
149
Tangible common stockholders' equity
$
580,476
$
607,925
$
623,089
$
667,443
$
652,258
Tangible book value per share:
Tangible common stockholders' equity
$
580,476
$
607,925
$
623,089
$
667,443
$
652,258
Shares outstanding at end of period
48,787,696
49,535,949
49,728,253
50,450,045
51,002,698
Book value per share
$
11.90
$
12.27
$
12.53
$
13.23
$
12.79
Tangible book value per share
$
11.90
$
12.27
$
12.53
$
13.23
$
12.79
Quarter Ended
9/30/2022
6/30/2022
3/31/2022
12/31/2021
9/30/2021
(Dollars in thousands)
Non-GAAP loan growth, excluding PPP loans:
Gross loans, net of unearned income
$
4,677,646
$
4,528,234
$
4,349,558
$
4,256,213
$
4,233,117
Less: PPP loans, net of unearned income
6,622
14,536
31,200
64,805
109,465
Non-PPP gross loans, net of unearned income
$
4,671,024
$
4,513,698
$
4,318,358
$
4,191,408
$
4,123,652
Year-over-year loan growth
10.50
%
Non-GAAP year-over-year loan growth excluding
PPP loans
13.27
Linked quarter loan growth
3.30
Non-GAAP linked quarter loan growth excluding PPP loans
3.49
%
CROSSFIRST BANKSHARES, INC.
16
Quarter Ended
Nine Months Ended
9/30/2022
6/30/2022
3/31/2022
12/31/2021
9/30/2021
9/30/2022
9/30/2021
(Dollars in thousands)
Non-GAAP Core Operating Efficiency Ratio - Fully Tax
Equivalent (FTE)
Non-interest expense
$
28,451
$
29,203
$
27,666
$
26,715
$
24,036
$
85,319
$
72,667
Less: Accelerated employee benefits
-
-
-
-
-
-
719
Adjusted Non-interest expense (numerator)
$
28,451
$
29,203
$
27,666
$
26,715
$
24,036
$
85,319
$
71,948
Net interest income
49,695
46,709
43,115
43,445
41,801
139,519
125,246
Tax equivalent interest income
(1)
820
808
775
762
748
2,403
2,186
Non-interest income (loss)
3,780
4,201
4,942
4,796
(1,105)
12,922
8,864
Add: Acquisition costs
81
239
-
-
-
320
-
Add: Employee separation
-
1,063
-
-
-
1,063
-
Add: Unrealized loss on equity security
-
-
-
-
6,200
-
6,200
Less: BOLI settlement benefits
-
-
-
-
-
-
1,841
Total tax-equivalent income (denominator)
$
54,376
$
53,020
$
48,832
$
49,003
$
47,644
$
156,227
$
140,655
Efficiency Ratio
53.20
%
57.36
%
57.57
%
55.38
%
59.06
%
55.97
%
54.18
%
Non-GAAP Core Operating Efficiency Ratio - Fully Tax
Equivalent (FTE)
52.32
%
55.08
%
56.66
%
54.52
%
50.45
%
54.61
%
51.15
%
(1)
Tax exempt income (tax-free municipal securities) is calculated on a tax equivalent basis. The incremental tax rate used is 21.0%.
CROSSFIRST BANKSHARES, INC.
1
Exhibit 99.2
TABLE 3. YEAR-TO-DATE ANALYSIS OF CHANGES IN NET INTEREST
INCOME
(UNAUDITED)*
Nine Months Ended
September 30,
2022
2021
Average
Balance
Interest
Income /
Expense
Average
Yield /
Rate
(4)
Average
Balance
Interest
Income /
Expense
Average
Yield /
Rate
(4)
(Dollars in thousands)
Interest-earning assets:
Securities - taxable
(1)
$
218,421
$
3,728
2.28
%
$
203,633
$
2,911
1.91
%
Securities - tax-exempt
(1)(2)
549,490
13,845
3.36
476,980
12,596
3.52
Federal funds sold
-
-
-
-
-
-
Interest-bearing deposits in other banks
246,213
1,714
0.93
390,588
359
0.12
Gross loans, net of unearned income
(3)
4,466,887
149,266
4.47
4,381,213
130,268
3.98
Total interest-earning assets
(1)(2)
5,481,011
$
168,553
4.11
%
5,452,414
$
146,134
3.58
%
Allowance for credit losses
(57,213)
(76,726)
Other non-interest-earning assets
201,519
249,816
Total assets
$
5,625,317
$
5,625,504
Interest-bearing liabilities
Transaction deposits
$
541,933
$
2,134
0.89
%
$
629,959
$
936
0.20
%
Savings and money market deposits
2,386,205
15,285
0.86
2,360,559
6,402
0.36
Time deposits
627,458
5,733
1.22
863,592
7,451
1.15
Total interest-bearing deposits
3,555,596
23,152
0.87
3,854,110
14,789
0.51
FHLB and short-term borrowings
241,897
3,384
1.87
285,371
3,841
1.80
Trust preferred securities, net of fair value
adjustments
1,024
94
12.29
976
72
9.80
Non-interest-bearing deposits
1,148,150
-
-
814,924
-
-
Cost of funds
4,946,667
$
26,631
0.72
%
4,955,381
$
18,702
0.50
%
Other liabilities
51,634
35,385
Stockholders’ equity
627,016
634,738
Total liabilities and stockholders' equity
$
5,625,317
$
5,625,504
Net interest income
(2)
$
141,922
$
127,432
Net interest spread
(1)(2)
3.39
%
3.08
%
Net interest margin
(1)(2)
3.46
%
3.12
%
(1)
(loss) on available-for-sale securities from an interest-earning asset to a non-interest-earning asset. All periods presented reflect this change.
(2)
rate used is 21.0%.
(3)
Average gross loan balances include non-accrual loans.
(4)
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.
* As revised October 20, 2022
CROSSFIRST BANKSHARES, INC.
2
YEAR-TO-DATE VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED)
Nine Months Ended
September 30, 2022 over 2021
Average Volume
Yield/Rate
Net Change
(2)
(Dollars in thousands)
Interest Income
Securities - taxable
$
222
$
595
$
817
Securities - tax-exempt
(1)
1,840
(591)
1,249
Federal funds sold
-
-
-
Interest-bearing deposits in other banks
(176)
1,531
1,355
Gross loans, net of unearned income
2,604
16,394
18,998
Total interest income
(1)
4,490
17,929
22,419
Interest Expense
Transaction deposits
(207)
1,405
1,198
Savings and money market deposits
69
8,814
8,883
Time deposits
(2,145)
427
(1,718)
Total interest-bearing deposits
(2,283)
10,646
8,363
FHLB and short-term borrowings
(601)
145
(456)
Trust preferred securities, net of fair value adjustments
4
18
22
Total interest expense
(2,880)
10,809
7,929
Net interest income
(1)
$
7,370
$
7,120
$
14,490
(1)
(2)
CROSSFIRST BANKSHARES, INC.
3
TABLE 4. 2021 - 2022 QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME
(UNAUDITED)*
Three Months Ended
September 30,
2022
2021
Average
Balance
Interest
Income /
Expense
Average
Yield /
Rate
(4)
Average
Balance
Interest
Income /
Expense
Average
Yield /
Rate
(4)
(Dollars in thousands)
Interest-earning assets:
Securities - taxable
(1)
$
213,775
$
1,241
2.32
%
$
191,636
$
964
2.01
%
Securities - tax-exempt
(1)(2)
560,541
4,725
3.37
502,107
4,310
3.43
Federal funds sold
-
-
-
-
-
-
Interest-bearing deposits in other banks
231,345
1,193
2.05
313,188
121
0.15
Gross loans, net of unearned income
(3)
4,626,684
59,211
5.08
4,230,553
42,664
4.00
Total interest-earning assets
(1)(2)
5,632,345
$
66,370
4.68
%
5,237,484
$
48,059
3.64
%
Allowance for credit losses
(56,995)
(75,103)
Other non-interest-earning assets
188,997
246,603
Total assets
$
5,764,347
$
5,408,984
Interest-bearing liabilities
Transaction deposits
$
531,999
$
1,539
1.95
%
$
510,823
$
259
0.20
%
Savings and money market deposits
2,519,574
10,568
1.66
2,276,436
1,907
0.33
Time deposits
733,607
2,802
1.52
752,012
2,045
1.08
Total interest-bearing deposits
3,785,180
14,909
1.56
3,539,271
4,211
0.47
FHLB and short-term borrowings
165,196
908
2.18
278,154
1,275
1.82
Trust preferred securities, net of fair value
adjustments
1,037
38
14.58
988
24
9.63
Non-interest-bearing deposits
1,137,626
-
-
909,750
-
-
Cost of funds
5,089,039
$
15,855
1.23
%
4,728,163
$
5,510
0.46
%
Other liabilities
62,102
36,106
Stockholders’ equity
613,206
644,715
Total liabilities and stockholders' equity
$
5,764,347
$
5,408,984
Net interest income
(2)
$
50,515
$
42,549
Net interest spread
(1)(2)
3.45
%
3.18
%
Net interest margin
(1)(2)
3.56
%
3.23
%
(1)
(loss) on available-for-sale securities from an interest-earning asset to a non-interest-earning asset. All periods presented reflect this change.
(2)
rate used is 21.0%.
(3)
Average loan balances include non-accrual loans.
(4)
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.
* As revised October 20, 2022
CROSSFIRST BANKSHARES, INC.
4
QUARTER-TO-DATE VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED)
Three Months Ended
September 30, 2022 over 2021
Average Volume
Yield/Rate
Net Change
(2)
(Dollars in thousands)
Interest Income
Securities - taxable
$
119
$
158
$
277
Securities - tax-exempt
(1)
501
(86)
415
Federal funds sold
-
-
-
Interest-bearing deposits in other banks
(39)
1,111
1,072
Gross loans, net of unearned income
4,251
12,296
16,547
Total interest income
(1)
4,832
13,479
18,311
Interest Expense
Transaction deposits
5
1,275
1,280
Savings and money market deposits
223
8,438
8,661
Time deposits
(49)
806
757
Total interest-bearing deposits
179
10,519
10,698
FHLB and short-term borrowings
(583)
216
(367)
Trust preferred securities, net of fair value adjustments
1
13
14
Total interest expense
(403)
10,748
10,345
Net interest income
(1)
$
5,235
$
2,731
$
7,966
(1)
(2)
Exhibit 99.3
CROSSFIRST BANKSHARES, INC. NASDAQ: CFB 3rd Quarter 2022 Earnings Presentation October 18, 2022
Legal disclaimer CROSSFIRST BANKSHARES, 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 during this meeting contain forward-looking statements. These forward- looking statements reflect our current views with respect to, among other things, future events and our financial performance. These forward-looking statements include, but are not limited to, statements regarding our business plans, the acquisition of Central,* expansion targets and opportunities, and future financial performance. These statements are often, but not always, made through the use of words or phrases such as "positioning," "would," "could," "optimistic," "potential," "believe," "expect," "will make," "will," "anticipate," "looking forward," "growth," "intend," "plan," "position," "future," "goal," "target," "focus," "uncertainty,“ “strategy,” and "assuming" or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward -looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward -looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be
important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: risks relating to the ongoing COVID-19 pandemic; risks related to general business and economic conditions and any regulatory responses to such conditions; our ability to effectively execute our growth strategy and manage our growth, including identifying and consummating suitable mergers and acquisitions; the geographic concentration of our markets; fluctuation of the fair value of our investment securities due to factors outside our control; our ability to successfully manage our credit risk and the sufficiency of our allowance; regulatory restrictions on our ability to grow due to our concentration in commercial real estate lending; our ability to attract, hire and retain key personnel; interest rate fluctuations; our ability to raise or maintain sufficient capital; competition from banks, credit unions and other financial services providers; the effectiveness of our risk management framework in mitigating risks and losses; our ability to maintain effective internal control over financial reporting; our ability to keep pace with technological changes; system failures and interruptions, cyber -attacks and security breaches; employee error, fraudulent activity by employees or clients and inaccurate or incomplete information about our clients and counterparties; our ability to maintain our reputation; costs and effects of litigation, investigations or similar matters; risk exposure from transactions with financial counterparties; compliance with governmental and regulatory requirements; and changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters. 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. 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, foreca sts 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 uncertainti es and are based on assumptions that are subject to change. * CrossFirst announced its plans to acquire Farmers & Stockmens Bank (“Central”) on June 13, 2022. The closing of the merger is subject to regulatory approval. 2
About non-gaap financial measures CROSSFIRST BANKSAHRES, INC. Certain of the financial measures and ratios we present, including “tangi ble common stockholders’ equity”, “tangible book value per share”, “non-GAAP core operating income”, “non-GAAP core operating return on average assets”, “non-GAAP loan growth, excluding PPP loans” and “non-GAAP core operating efficiency ratio – fully tax equivalent (FTE)” metrics, are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” 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 assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis. 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. CrossFirst does not provide a reconciliation of forward-looking non-GAAP financial measures to its comparable GAAP financial measures because it could not do so without unreasonable effort due to the unavailability of the information needed to calculate reconciling items and the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP financial measures in future periods. When planning, forecasting and analyzing future periods, CrossFirst does so primarily on a non-GAAP basis without preparing a GAAP analysis as that would require estimates for various cash and non-cash reconciling items (including items such as expected credit losses, acquisition- and disposition-related expenses, and restructuring costs) that would be difficult to predict with reasonable accuracy. For example, future expectations for credit losses depend on a variety of factors including general economic conditions that make estimation on a GAAP basis impractical. It is also difficult to anticipate the need for or magnitude of presently unforeseen one-time restructuring expenses. As a result, CrossFirst does not believe that a GAAP reconciliation to forward-looking non-GAAP financial measures would provide meaningful supplemental information about CrossFirst’s forward-looking measures. 3
Our Road to Success CROSSFIRST BANKSAHRES, INC. ONE TEAM Elevating our Strong Corporate Culture by Living our CrossFirst Values Attracting and Retaining High Performing Talent Invest in well-being of our Employees Total Assets $5.8 billion ONE BANK Targeting Businesses and Professionals Branch-Light – Technology Focused Delivering Extraordinary Service and Customer Experience Enhancing Products and Services Gross Loans $4.7 billion SHARED VISION Performance & Profitability Seizing Growth Opportunities Strong Credit Quality Managing Enterprise Risk Contributing to our Communities Total Deposits $5.0 billion 4
Our Growth CROSSFIRST BANKSAHRES, INC. Total Assets Compound Annual Growth Rates Since 2012 Total Assets 26.3% $565 $847 $1,120 $1,574 $2,133 $2,961 $4,107 $4,931 $5,659 $5,621 $5,849 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q3 2022 2012 Expanded into Wichita and Oklahoma City markets 2013 Expanded into Tulsa market through acquisition of Tulsa National Bancshares, Inc. (~$160mm in Total Assets) 2016 Expanded into Dallas market 2019 CrossFirst Bankshares, Inc. Initial Public Offering at $14.50; Nasdaq listed: CFB 2021 Expanded into Phoenix market Note: Dollars in chart are in millions. 5
DRIVEN BY OUR EXTRAORDINARY CULTURE CROSSFIRST BANKSHARES, INC. FOCUSING ON OUR CORE VALUES At CrossFirst Bank, extraordinary service is the unifying purpose at the very heart of our organization. To deliver on our purpose, each of our employees operate under four values that define our approach to banking: CHARACTER Who You Are COMPETENCE What You Can Do COMMITMENT What You Want To Do CONNECTION What Others See In You INVESTING IN OUR PEOPLE & CLIENTS We prioritize and invest in creating opportunities to help employees grow and build their careers: A culture and leadership-driven onboarding program for new hires A development program designed for emerging leaders that explores core leadership concepts and foundational concepts of the banking industry As a GALLUP® Strengths-Based organization, provide every employee access to their unique CliftonStrengths®. POSITIONING FOR SUCCESS We strive to build an equitable and inclusive environment with diverse teams. We strive to hire and retain diverse, top-tier talent: 2021 New Hires were 21% ethnically diverse Overall company is 59% female new hires GALLUP® Q12 Survey 68% engaged employees; with more than 94% of employees responding, we received our highest scores ever for employee engagement 6
EXPANDING OUR FOOTPRINT CROSSFIRST BANKSHARES, INC. AREAS OF FOCUS Continue to execute our organic growth strategy in new and existing markets Focus new expansion in target markets where we currently have client business Evaluate expansion strategies in key target markets: De Novo Expansion: Hire experienced talent to expand in key growth markets Strategic Acquisition*: Provides operational scale and synergies Adds new lines of business Adds fee income opportunities CURRENT AND POTENTIAL TARGET MARKETS Austin, Texas Houston, Texas San Antonio, Texas Nashville, Tennessee Omaha, Nebraska Legend: Current CFB Location Planned CFB Location* Target CFB Locations * Anticipated benefits as transaction closing is subject to regulatory approval. 7
THIRD Quarter 2022 Highlights CROSSFIRST BANKSAHRES, INC. Financial Performance Net Income $17.3 Diluted EPS $0.35 ROE 11.18% ROA 1.19% Net Income Net interest income increased 6% on strong loan growth and increased yield Non-interest expenses declined, partially offset by continued production hiring Fully tax equivalent NIM increased 4bps to 3.56% during Q3 2022 and has expanded 33bps from Q3 2021(1) Balance Sheet Loan portfolio incr eased 3% from Q2 2022; the portfolio increased 11% from Q3 2021 Total deposits increased 5% from the prior quarter and 12% from Q3 2021; DDA as a percentage of total deposits was 22% in Q3 2022 Credit Quality Classified loans / total capital + combin ed ACL ratio(2) of 11% has declined from 17% at Q3 2021 NCOs / average loans of 0.16% for the quarter and 0.11% on a trailing-twelve-month basis NPAs / assets decreased 23bps during the quarter to 0.31% and have declined 61bps from Q3 2021 (1) For all quarters presented, investment yield accrual calculation changed to 30/360 from actual/actual and excludes unrealized gains and losses in the investment portfolio and earning assets. (2) Includes the accrual for off-balance sheet credit risk from unfunded commitment s (“RUC”) that resulted from CECL adoption on January 1, 2022. 8
Net Interest Margin CROSSFIRST BANKSAHRES, INC. Yield on Loans & Cost of Deposits 4.00% 0.38% 4.17% 0.33% 4.00% 0.31% 4.28% 0.42% 5.08% 1.20% Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 Yield on Loans Cost of Total Deposits Net Interest Margin - Fully Tax Equivalent (FTE)* 2.30% 3.00% 3.29% 5.20% 3.56% Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 Fully tax-equivalent net interest margin increased 4bps from Q2 2022, primarily due to higher loan yields, loan growth, and accrual improvements, offset by an increase in funding costs Cost of deposits increased 78ps from Q2 2022 due to market rate increases Loan to deposit ratio decreased to 94% from 95% in Q2 2022 Current funding structure allows for significant additional capacity for borrowing or wholesale funding if necessary * For all quarters presented, investment yield accrual calculation changed to 30/360 from actual/actual and excludes unrealized gains and losses in the investment portfolio and earning assets 9
Net Interest Income Sensitivity CROSSFIRST BANKSAHRES, INC. Net Interest Income Impact From Rate Changes (1.93%) (0.92%) 0.20% 0.95% 4.06% 1.93% 6.11% 2.92% 8.19% 3.92% -100 pbs +100 bps +200 bps +300 bps +400 bps Rate Shock* Rate Ramp* Anticipated asset sensitivity with rate increases driving potential expansion of net interest income Loans: Rate Reset and Cash Flow Profile 60% 9% 9% 19% 3% 3-Jan 12-Apr 2-Jan 5-Feb >5 years Months Months Years Years Roughly 69% of Company’s earning assets reprice or mature over the next 12 months, with 53% in month one Note: Data as of September 30, 2022 * 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) 10
Asset Quality Performance CROSSFIRST BANKSHARES, INC. Classified Loans / (Total Capital +ACL + RUC*) $124.1 $78.7 $73.3 $81.5 $72.1 17.3% 10.8% 10.7% 12.0% 11.2% Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 Classified loans decreased 12% 10% of classifieds in Q3 2022 relate to energy, down from 15% in Q2 2022 Nonperforming Assets / Assets 0.92% 0.58% 0.64% 0.54% 0.31% Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 NPAs decreased due to continued improvements and successful workouts with borrowers 30% of the non-performing asset balance in Q3 2022 relates to energy credits Note: Dollar amounts are in millions. * Includes the accrual for off-balance sheet credit risk from unfunded commitments (“RUC”) that resulted from CECL adoption on January 1, 2022. 11
Asset Quality Performance CROSSFIRST BANKSAHRES, INC. Net Charge-Offs / Average Loans(1) 0.13% 0.07% 0.10% 0.10% 0.16% Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 Q3 2022 included $1.9 million of net charge-offs which consisted of loans in both energy and commercial and industrial credits Allowance for Credit Losses + RUC / Total Loans 1.51% 1.37% 1.38% 1.35% 1.34% $64.2 $58.4 $55.2 $4.9 $55.8 $5.3 $55.9 $6.7 Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 AcL RUC AcL + RUC / Total Loans ACL + RUC / Total Loans decreased slightly to 1.34% at end of Q3 2022 primarily due to a change in portfolio mix Allowance for credit losses to non-accruing loans at the end of Q3 2022 was 324% Note: Dollar amounts are in millions Ratio is annualized for interim periods. 12
2022 Guidance CROSSFIRST BANKSHARES, INC. Business Driver Annual Outlook Loans Expect 8-10% core loan growth Deposits Expect continued deposit growth to fund lending growth with a continued focus on improving the DDA mix Net Interest Margin (NIM) Expect NIM to be in a range of 3.45 to 3.55%, assuming a Fed Funds rate of 4.50 to 4.75% at year-end Combined ACL / Loans Anticipated to remain in the 1.30% to 1.45% range, based on current economic conditions Effective Tax Rate Expect to remain in the 20-22% range Note: Guidance excludes any impact from the anticipated closing of the Central acquisition. 13
CROSSFIRST BANKSAHRES, INC. Supplemental information 14
Stock Repurchase Activity CROSSFIRST BANKSAHRES, INC. 51,003 50,450 49,728 4,953 48,788 0 566 1058 238 794 Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 # of Shares Purchased # Shares Outstanding Repurchased 1.6% of outstanding shares in Q3 2022 Drives improvement in ROE and EPS Little tangible book value dilution and a short earnback period Note: shares in thousands. 15
capital Ratios CROSSFIRST BANKSAHRES, INC. Capital Ratios 12.6% 12.6% 13.9% 12.5% 12.5% 13.6% 11.9% 11.9% 12.9% 11.5% 11.5% 12.6% 11.0% 11.1% 12.1% Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 Common Euqity Tear 1 Tier 1 Risk Based Total Risk-Baed Capital Maintaining strong capital levels to support future growth Remain well capitalized as we return capital to shareholders through share repurchases Execution of our profitable growth strategy supports capital ratios Capital ratios have decreased due to share repurchase activity and loan growth 16
Diverse loan portfolio CROSSFIRST BANKSAHRES, INC. Loan Mix by Type ($4.7bn) Owner Occupied Real Estate 8% Energy 4% CRE 43% Residential Real Estate 8% Other 1% C&I 36% Note: Gross loans, (net of unearned income) data as of September 30, 2022. 17
Diverse loan portfolio CROSSFIRST BANKSAHRES, INC. CRE Loan Portfolio by Segment ($2.0bn) Retail 15% Office 15% Industrial 13% 1-4 Family Res Construction 8% Hotel 9% Other 25% Multi -Family 15% C&I Loan Breakdown by Type ($1.7bn) Financial Management 4% Aircraft & Transportation 6% Merchant Wholesalers 3% Other Industries 49% Manufacturing 11% Business Loans to Individuals 6% Health Care 4% Engineering & Contracting 11% Restaurants 6% Note: Data as of September 30, 2022. 18
Combined Allowance for Credit Losses CROSSFIRST BANKSHARES, INC. ACL and Reserve for Unfunded Commitments $61.1 ($1.9) ($0.2) $3.6 $62.6 Q2 QTD Individual Growth and Q3 2022 Net Charge-Offs Analysis Qualitative Factors 2022 End #nd ALC + RUC*Reserve Note: As of end of period; dollars in millions. * Includes the accrual for off-balance sheet credit risk from unfunded commitments (“RUC”) that resulted from CECL adoption on January 1, 2022. 19
expense management CROSSFIRST BANKSHARES, INC. $24.0 $26.7 $27.7 $29.2 $28.5 $4.5 $5.9 $5.2 $7.1 $5.4 $1.7 $1.9 $2.1 $2.4 $2. 1 $2.4 $2.4 $2.5 $2.6 $2.7 $15.4 $16.5 $17.9 $17.1 $18.3 Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 Salaries & Benefits Occupanc y Data Processing, Software & Comm. Other Investments in talent and technology continue to account for the increase in expenses year over year Other expense in Q2 2022 included $1.1 million of employee separation costs Salaries and benefits were higher due to the increased hiring in new markets and business lines and increased incentive compensation due to performance Note: Dollars are in millions and amounts shown are as of the end of the period unless otherwise specified. 20
Improving Core Funding Base CROSSFIRST BANKSAHRES, INC. Total Deposits and % DDA $4,437 $4,684 $4,622 $4,744 $4,988 $3,476 $3,521 $3,512 $3,581 $3,874 $961 $1,163 $1,110 $1,163 $1,114 Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 DDA Other Deposits Cost of Deposits 0.38% 0.33% 0.31% 0.42% 1.20% Total demand deposits increased 16% since Q3 2021 Cost of deposits increased 78bps this quarter, due to market rate increases Non-interest-bearing deposits were 22% of total deposits this quarter Note: Dollars are in millions and amounts shown are as of the end of the period. 21
Securities portfolio CROSSFIRST BANKSHARES, INC. Investment Portfolio Breakout as of September 30, 2022 Municipal - Taxable, 1.0% Municipal - Tax-Exempt, 73.5% CMO (Fixed), 1.8% Other, 0.8% MBS (Fixed), 22.9% Total: ~$657 million At the end of Q3 2022, the portfolio’s duration was approximately 5.5 years The fully taxable equivalent yield for Q3 2022 remained consistent at 3.07% The securities portfolio has unrealized losses of approximately $108 million as of September 30, 2022 During Q3 2022, $8 million of securities were purchased at an average tax-equivalent yield of 5.19% and there were $6 million in MBS paydowns Securities Yield – Fully Tax Equivalent (2) 3.04% 3.02% 3.00% 3.07% 3.07% 2.58% 2.54% 2.61% 2.57% 1.84% Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 Securities Yield - Cost of Funds Spread Based on approximate fair value. A tax rate of 21% is used to calculate the fully tax equivalent yield 22
Quarterly selected financials (unaudited) CROSSFIRST BANKSAHRES, INC. (Dollar; in thousands except perchare data: CrossFIrst Bankshares, Inc. Quarterly Financials For the Three Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Income Statement Data: Interest income Interest expense s 65,550 15.855 s 52840 6131 s 47,760 4,645 s 49202 5757 s 475n 5510 Net interest income 49.69 5 46.709 43,115 43,445 41,801 Provision for credit losses 3354 2.155 (625) (5.000) (10.000) Non-interest income 3780 4201 4,942 4,796 0105) Non-interest expense 28.451 29203 27666 26.715 24.036 Net income before taxes 21690 19372 21016 26.526 26.660 Income tax expense 4,410 4,027 4.188 5725 5660 Net income 17280 15545 16,828 20.801 21.000 Non-GAAP core operating income'1 s 17344 s 16374 s 16,828 s 20.801 s 25898 Balance Sheet Data: Cash and cash equivalents s 309135 s 277,678 s 276.927 s 482727 s 316,722 Securities 656.527 695647 722778 745.969 708.106 ) Gross loans (net of unearned income) 4,677,646 4,528254 4349568 4256215 4233,117 Allowance for credit losses1 55.864 55.817 55251 58375 64152 Goodwill and intangibles 71 91 no 130 149 Total assets 5.848.977 5708311 5518,121 5621,457 5401,151 Non-interest bearing deposits 1115.934 1.163.462 1,110284 1,163224 960.999 Total deposits 4987515 4,744,420 4,621680 4683597 4.436.597 Borrowings and repurchase agreements 205349 296.606 226.600 236.600 276.600 Trust preferred securities net of fair value adjustments 1048 1035 1022 1.009 997 Stockholders Equity 580.547 608.016 623.199 667573 652407 Tangible common stockholders'equity11 s 580.476 s 607,924 s 623.089 s 667,443 s 652257 Share and Per Share Data: Basic earnings per com mon share s 035 s 031 s 033 s 0.41 s 0.41 Diluted earnings per common share 035 031 033 0.40 0.41 Book value per share 1190 1227 1253 1323 1279 Tangible
book value per share s 1190 s 1227 s 1253 s 1523 s 1279 Basic weighted average common shares outstanding 49266.811 49.758263 50251297 50893.493 50990.113 Diluted weighted average common shares outstanding 49,721,493 50203.725 50.910,490 51660723 51605.721 Shares outstanding at end of period 48787696 _ 49.555949 49.728253 50450045 51.002698 Represents a non-GAAP financial measure. See Non-GAAP Reconciliation slides at the end of this presentation for additional detail. Impleme nted CECL on January 1, 2022, all prior quarters presented represent the allowance for loan losses. 23
Quarterly selected financials (unaudited) CROSSFIRST BANKSAHRES, INC. 9/30/22 Selected-RaUQs; Return or average assets1: 1-19% Non-GAAP core operating return on average assetS1);: 119 Return on average common equity 11.18 Yield on earning assets 462 Yield on earning assets - tax equivalent^ 4.62 Yield on securities 266 Yield on securities - tax equivale nt’3 3.07 Yield on bans 508 Cost of funds 125 Cos tof interest-bearing liabilities 159 Cost of interest-bearing deposits 156 Cost of de posits 120 Cost of other borrowings 2.13 Net interest margin - tax equivalent3 3.56 Non-interest expense to average assets 1.96 Efficiency ratio ’1 5520 Non-GAAR core operating efficiency ratio {FTE)ow 5229 Non-iinterest bearing de posits to total de posits 2255 Loans to deposits 9579 % Credit Quality Ratios; Allowance for credit losses to total loans 1.19 % Allowance for credit losses * RUC to total loartí51 154 Non performing assets to total assets 051 Nonperforming bans to total loans 057 Allowance for credit losses to nonperforming loans 523.89 Net charge-offs (recoveries) to average loans11 0.16 % Capital Patios: Total stockholders' equity to total assets 9.92 % Common equity tier 1 capital ratio 11.04 Tier 1 risk-based capital ratio Ï105 Total risk-based capital ratio 1209 Tier 1 leverage ratio T1.45 % CrossFIrst Bankshares, Inc. Quarterly Financials For the Three Months Ended 6/30/22 3/31/22 12/31/21 9/30/21 1.12 % 123 % 150 % 154 % 120 123 150 1.90 10.15 10.44 1257 12.92 592 559 365 3.56 3.98 364 3.72 3.64 266 259 2.49 246 507 300 302 304 428 400 4.17 4.00 050 059 0.48 0.46 0.66 051 0.61 057 0.56 0.41 0.43 0.47 0.42 051 033 058 166 195 303 1.82 552 529 330 323 2.n 202 193 1.76 5756 5757 5538 59.06 5508 5666 5452 50.45 2452 24.02 24.84 21.66 9544 % 94.11 % 9087 % 95.41 % 125 % 127 % 157 % 151 % 155 158 - - 054 064 058 0.92 0.66 0.79 0.74 115 186.92 15960
18519 131.76 0.10 % 0.10 % 007 % 013 % 10.65 % 1129 % 11.88 % 1208 % 1151 1188 12.46 12.61 1155 1190 12.48 12.63 1260 1292 1361 13.88 11.77 % 1161 % 11.84 % 1177 % (1) Interim 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 tax-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 for non-core or non-recurring items (5) Includes the accrual for off-balance sheet credit risk from unfunded commitments (“RUC”) that resulted from CECL adoption on January 1, 2022. 24
Non-gaap reconciliations CROSSFIRST BANKSAHRES, INC. For the Three Months Ended (Dollars in thousand!) 9/30/22 6/30/22 3/3*22 12/31/21 9/30/21 Net income s 17.2» s 15.545 s «828 s 20»1 s 210» Add Acquisition costs 81 239 less:Taxeffect"’ 17 M Acquisition costs. ne 1 o ( 1 a« 64 B9 Add Em Uo.tc separation 1063 - - • LessiTaiefect"1 223 Em doyee separalion.nf* ol la« 840 Add Lbirmiral loss on ojiitysocnity • • 62» Less: Taxefecl"1 1302 Lbirmirod losson mutysccLnty.netofla* 4898 Non GAAP core operating income non-GAAP CoreQwiatna Return on A vana* A »9tt: s 17.3« s «.574 s «828 s 20»1 s 26898 Nel Income s 17.2» s «545 s «828 s 20»1 s 210» Non GAAP coreoperat'ngincome Avnagcassebs s 17.3« 5.764347 s «574 5.545657 s «828 6563739 s 20»1 5.490482 s 26898 6406984 GAAP return on average assets 119 % 112 9i 123 % 150 % 154 9b Non GAAP co re opnabng return onaacrageassets IS 9i 120 9i 123 % 150 9i 190 9» Non-GAAP core Qreiatina Ernenne» Ratio: Non Irenes! rapense (rumeraor) s 28.451 s 29203 s 278» s 26.7« s 24036 Nelireeiea income 49.695 46709 4216 42445 41801 Taxcgjivalere interns! income1'' 820 808 775 762 748 Non Irenes! ficome a7» 4201 4342 4796 <4*35» Add.AcgUsitian costs 81 239 Add: Em^ta yec separation • 1063 - - • Add. Jrrmliaid loss o n ajuty secuiily 62» Non GAAP opnabngre»nje (deromirntor) s 54376 s 53020 s 48832 s 49003 s 47.6« GAAP DfidmcyRalo 5320 % 5736 % 57.57 % 5638 % 5906 % Non GAAP core opnabng eiidency ratio (FTE) 5232 % 5508 % 56.» % 5452 % »45 96 Represents the tax impact of the adjustments at a tax rate of 21.0%. Tax exempt income (tax-free municipal securities) is calculated on a tax equivalent basis. The incremental tax rate used is 21.0%. 25
NON-GAAP RECONCILIATIONS CROSSFIRST BANKSHARES, INC. As of or for the Year Ended December 31, Nine Months Ended September 30, 2021 2020 2019 2018 2022 2021 Non-GAAP core Operating income: Net income Add: Acquisition costs Less Tax effect" s 69.413 s 12601 S 28.473 S 19.590 s 49.655 320 67 s 48.612 Acquisition costs net of tax - - - - 255 - Add: Employee separation - - - - 1.063 - Less Tax effect" - - - - 223 - Employee separation, net of tax - - - - 840 - Add: Unrealized loss on equity security 6200 - - - - 6200 Less Tax effect*1 1302 - - - - 1.302 Unrealized loss on equity security, net of tax 4.898 - - - - 4.898 Add: restructuring charges - - - 4.735 - - Less Tax effect1 - - - 1381 - - Restructuring charges net of tax - - - 3352 - - Add: fixed asset impairments - - 424 171 - - Less Tax effect5* - - 109 44 - - Fixed asset impairments net of tax - - 315 127 - - Add: Goodwill impairments* - 7.397 - - - - Add: State tax credit 3 - - (1261) (3329) - - Add: Accelerated employee benefits 719 - - - - 719 Less Tax effect ~* 210 - - - - 210 Accelerated employee benefits net of tax 509 - - - - 509 Less BOU settlement benefits5* 1.841 - - - - 1841 Non-GAAP core operating income l 72979 * '9993 5 27.A27 5 19.940 50.7-6 V 52178 Non-GAAP Core Operating Return on Average. Assets: Net income s 69.413 s 12601 S 28.473 S 19.590 s 49.655 s 48.612 Non-GAAP core operating income 72979 19998 27.427 19.940 50.746 52178 Average assets s 5.591.471 s 5.358.479 S 4. ¿99.764 S 3.494.655 s 5625.317 s 5.625.304 GAAP Return on average assets 124 % 024 % 0.63 % 0.56 % 1.18 % 1.16 % Non-GAAP core operating return on average assets 121 % 0.37 % 0.61 % 0.57 % 121 % 124 % Represents the tax impact of the adjustments above at a tax rate of 25.73% from 2018 through 2020 and at 21% for 2021 and 2022, plus a permanent tax benefit associated with stock-based grants. Represents
the tax impact of the adjustments above at a tax rate of 25.73% for fiscal years 2018 and after. No tax effect associated with the 2017 Tax Act adjustment or state tax credit or the goodwill impairment. 26
NON-GAAP RECONCILIATIONS CROSSFIRST BANKSHARES, INC. As of or for the Year Ended Nine Months Ended December 31,September 30, 2021 2020 —I 2019 2018 2022 — X 2021 Non-CAAP Core Operating Efficiency Ratio: Non-interest expense S 99382 S 99,968 s 87,640 S 85,755 S 85,319 S 72,667 Less: Accelerated employee benefits 719 - - - - 719 Less: goodwill impairment - 7,397 - - - - Less: restructuring charges - - - 4,733 - - Non-CAAP non-interest expense (numerator) s 98,663 s 92371 s 87,640 $ 81,022 s 85,319 s 71,948 Net interest income 168,691 160,249 141,444 110,368 139,519 125,246 Tax equivalent interest income1' 2,948 2,732 2,522 3,099 2,403 2,186 Non-interest income 13,660 11,733 8,707 6,083 12,922 8,864 Add: Acquisition costs - - - - 320 - Add: Employee separation - - - - 1,063 - Add: Unrealized loss on equity security 6,200 - - - - 6,200 Add: fixed asset impairments - - 424 171 - - Less: BOU settlement benefits21 1,841 - - - - 1,841 Non-CAAP Operating revenue (denominator) S 189,658 s 174,714 s 153,097 $ 119,721 s 156227 s 140,655 CAAP Efficien cy Ratio 54.50 % 58.13 % 5837 % 73.64 % 55.97 % 54.18 % Non-CAAP Core Operating Efficiency Ratio (FTE) 52.02 % 52.98 % 5725 % 67.68 % 54.61 % 51.15 % Tax exempt income (tax-free municipal securities) is calculated on a tax equivalent basis. The incremental tax rate used is 21.0%. No tax effect associated with the 2017 Tax Act adjustment or state tax credit or the goodwill impairment. 27
Non-gaap reconciliations CROSSFIRST BANKSAHRES, INC. 9/30/22 (Dollars in thousands, except per share data) Stockholders equity Less: Goodwill and other intangible assets s 580.547 71 Tangible Stockholders Equity 580.476 Share outstanding at end of period 48.787.69 6 Book value per share s 1190 Tangible book value per sha e $ 1190 For the Three Months Ended 6/30/22 3/3V22 s 608.016 91 s 623.199 It) s 607 925 $ 623.089 49.535.949 49.728253 s 2.27 s 12.53 s 2.27 5 12.53 12/31/21 9/30/21 s 667.573 CO s 652.407 149 s 667.443 s 652 2 58 50.450.045 51.002.698 s G23 s 12.79 s G23 s 12.79 28