UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  _______  to _______

Commission file number 001-39028

CROSSFIRST BANKSHARES, INC.

(Exact Name of Registrant as Specified in its Charter)

Kansas			26-3212879
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
11440 Tomahawk Creek Parkway
Leawood	,	KS	66211
(Address of principal executive offices)			(Zip Code)

(913) 901-4516

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CFB	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☒  No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒  No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		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.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☒

As of July 26, 2024, the registrant had 49,286,587 shares of common stock, par value $0.01, outstanding.

CROSSFIRST BANKSHARES, INC.

Form 10-Q for the Quarter Ended June 30, 2024

Index

Cautionary Note Regarding Forward-Looking Information	3
Part I. Financial Information
Item 1. Consolidated Financial Statements
Consolidated Statements of Financial Condition – Unaudited	4
Consolidated Statements of Operations – Unaudited	5
Consolidated Statements of Comprehensive Income – Unaudited	6
Consolidated Statements of Stockholders’ Equity – Unaudited	7
Consolidated Statements of Cash Flows – Unaudited	8
Notes to Consolidated Financial Statements – Unaudited	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3. Quantitative and Qualitative Disclosures about Market Risk	57
Item 4. Controls and Procedures	59
Part II. Other Information
Item 1. Legal Proceedings	59
Item 1A. Risk Factors	59
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 5. Other Information	60
Item 6. Exhibit Index	61
Signature	62

2

Cautionary Note Regarding Forward-Looking Information

All statements contained in this quarterly report on Form 10-Q that do not directly and exclusively relate to historical facts constitute forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “could,” “predict,” “potential,” “believe,” “expect,” “will,” “anticipate,” “estimate,” “intend,” “projection,” “would,” “annualized,” “position,” “future” and “strategy,” or the negative of these words or other comparable words or phrases of a future or forward-looking nature. For example, our forward-looking statements include, without limitation, statements regarding our business plans, expectations, or opportunities for growth; our expense control initiatives and the results expected to be realized from those initiatives; our anticipated financial results, expenses, cash requirements and sources of liquidity; our capital allocation strategies and plans; and our anticipated future financial performance.

Unless we state otherwise or the context otherwise requires, references in this Form 10-Q to “we,” “our,” “us,” and the “Company” refer to CrossFirst Bankshares, Inc., and its consolidated subsidiaries. References in this Form 10-Q to “CrossFirst Bank” and the “Bank” refer to CrossFirst Bank, our wholly owned consolidated bank subsidiary.

These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs, certain assumptions made by management, and financial trends that may affect our financial condition, results of operations, business strategy or financial needs, many of which, by their nature, are inherently uncertain and beyond our control. Our actual results could differ materially from those anticipated in such forward-looking statements. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors, including, without limitation: uncertain or unfavorable business or economic conditions and any regulatory responses thereto, including uncertainty and volatility in the financial markets, possible slowing or recessionary economic conditions and continuing or increasing inflation; geographic concentration of our markets; changes in market interest rates that affect the pricing of our products and our net interest income; our ability to effectively execute our growth strategy and manage our growth, including identifying, consummating and integrating suitable mergers, acquisitions or other business combinations, entering new lines of business or offering new or enhanced services or products; fluctuations in the fair value of our investments; our ability to successfully manage our credit risk, particularly in our commercial real estate, energy and commercial-based loan portfolios, and the sufficiency of our allowance for credit losses; declines in the values of the real estate and other collateral securing loans in our portfolio; an increase in non-performing assets; borrower and depositor concentration risks; risks associated with originating Small Business Administration loans; our dependence on our management team, including our ability to attract, hire and retain key employees and their client and community relationships; our ability to raise and maintain sufficient liquidity and capital; competition from banks, credit unions, FinTech companies and other financial services providers; the effectiveness of our risk management framework; accounting estimates; our ability to maintain effective internal control over financial reporting; our ability to keep pace with technological changes; system failures, service denials, cyber incidents or other failures, disruptions or security breaches; employee error, employee or client misconduct, fraud committed against the Company or our clients, or incomplete or inaccurate information about clients and counterparties; disruptions to our business caused by our third-party service providers; our ability to maintain our reputation; environmental liability or failure to comply with regulatory requirements affecting foreclosed properties; costs and effects of litigation, investigations or similar matters to which we may be subject; risk exposure from transactions with financial counterparties; severe weather, natural disasters, pandemics or other health crises, acts of war or terrorism, climate change and responses thereto, or other external events; compliance with (and changes in) laws, rules, regulations, interpretations or policies relating to or affecting financial institutions, including stringent capital requirements, higher FDIC insurance premiums and assessments, consumer protection laws and privacy laws and accounting, tax, trade, monetary and fiscal matters, including the policies of the Federal Reserve and as a result of government initiatives; systemic risks across the banking industry associated with the soundness of other financial institutions; volatility in our stock price and other risks associated with our common stock; changes in our dividend or share repurchase policies and practices; or other external events. Additional discussion of these and other risk factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Form 10-K”), filed with the Securities and Exchange Commission (“SEC”) on February 29, 2024, and in our other filings with the SEC.

These forward-looking statements are made as of the date hereof, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in our business, results of operations or financial condition over time, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

3

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Financial Condition - Unaudited

	June 30, 2024		December 31, 2023
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	250,364	$	255,229
Available-for-sale securities - taxable		461,018		413,217
Available-for-sale securities - tax-exempt		341,331		353,436
Loans, net of unearned fees		6,344,407		6,127,690
Allowance for credit losses on loans		76,218		73,462
Loans, net of the allowance for credit losses on loans		6,268,189		6,054,228
Premises and equipment, net		69,898		70,869
Restricted equity securities		3,768		3,950
Interest receivable		39,497		37,294
Foreclosed assets held for sale		4,818		—
Goodwill and other intangible assets, net		29,499		31,335
Bank-owned life insurance		71,766		70,810
Other		98,403		90,312
Total assets	$	7,638,551	$	7,380,680
Liabilities and stockholders’ equity
Deposits
Non-interest-bearing	$	957,584	$	990,458
Savings, NOW and money market		3,836,070		3,669,726
Time		1,939,972		1,831,092
Total deposits		6,733,626		6,491,276
Federal Home Loan Bank advances		76,256		77,889
Other borrowings		8,875		8,950
Interest payable and other liabilities		91,916		94,422
Total liabilities		6,910,673		6,672,537
Stockholders’ equity
Preferred stock, $0.01 par value: Authorized - 5,000,000 shares; issued - 7,750 at June 30, 2024 and December 31, 2023		—		—
Common stock, $0.01 par value: Authorized - 200,000,000 shares; issued - 53,590,173 and 53,326,641 shares at June 30, 2024 and December 31, 2023, respectively		536		533
Treasury stock, at cost: 4,340,033 and 3,990,753 shares held at June 30, 2024 and December 31, 2023, respectively		(62,761)		(58,251)
Additional paid-in capital		545,716		543,556
Retained earnings		308,886		272,351
Accumulated other comprehensive loss		(64,499)		(50,046)
Total stockholders’ equity		727,878		708,143
Total liabilities and stockholders’ equity	$	7,638,551	$	7,380,680

See Notes to Consolidated Financial Statements - Unaudited

4

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Operations - Unaudited

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(Dollars in thousands, except per share data)
Interest Income
Loans, including fees	$	113,346	$	98,982	$	223,445	$	188,600
Available-for-sale securities - taxable		5,052		2,622		9,580		4,471
Available-for-sale securities - tax-exempt		2,554		3,571		5,107		7,365
Deposits with financial institutions		1,985		1,609		3,966		3,623
Dividends on bank stocks		161		364		239		626
Total interest income		123,098		107,148		242,337		204,685
Interest Expense
Deposits		63,700		48,663		125,811		85,388
Fed funds purchased and repurchase agreements		—		—		—		46
Federal Home Loan Bank Advances		1,442		3,734		1,913		6,125
Other borrowings		64		212		127		366
Total interest expense		65,206		52,609		127,851		91,925
Net Interest Income		57,892		54,539		114,486		112,760
Provision for Credit Losses		2,383		2,640		4,038		7,061
Net Interest Income after Provision for Credit Losses		55,509		51,899		110,448		105,699
Non-Interest Income
Service charges and fees on client accounts		2,333		2,110		4,437		3,939
ATM and credit card interchange income		1,568		1,213		3,055		2,477
Gain on sale of loans		440		1,205		977		1,392
Income from bank-owned life insurance		501		418		957		829
Swap fees and credit valuation adjustments, net		88		84		246		174
Other non-interest income		771		749		1,618		1,389
Total non-interest income		5,701		5,779		11,290		10,200
Non-Interest Expense
Salaries and employee benefits		23,162		24,061		46,747		46,683
Occupancy		3,181		3,054		6,387		6,028
Professional fees		1,083		970		2,055		3,588
Deposit insurance premiums		1,851		1,881		3,757		3,412
Data processing		1,719		1,057		2,689		2,299
Advertising		491		649		1,049		1,401
Software and communication		1,833		1,655		3,657		3,306
Foreclosed assets, net		24		(21)		253		128
Core deposit intangible amortization		906		802		1,837		1,624
Other non-interest expense		3,475		3,304		6,799		7,035
Total non-interest expense		37,725		37,412		75,230		75,504
Net Income Before Taxes		23,485		20,266		46,508		40,395
Income tax expense		4,863		4,219		9,663		8,240
Net Income	$	18,622	$	16,047	$	36,845	$	32,155
Basic Earnings Per Common Share	$	0.37	$	0.33	$	0.74	$	0.66
Diluted Earnings Per Common Share	$	0.37	$	0.33	$	0.73	$	0.65

See Notes to Consolidated Financial Statements - Unaudited

5

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Comprehensive Income - Unaudited

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(Dollars in thousands)
Net Income	$	18,622	$	16,047	$	36,845	$	32,155
Other Comprehensive (Loss) Income
Unrealized (loss) gain on available-for-sale securities		(5,300)		(10,430)		(16,170)		4,521
Less: income tax (benefit) expense		(1,223)		(2,482)		(3,419)		1,175
Unrealized (loss) gain on available-for-sale securities, net of income tax		(4,077)		(7,948)		(12,751)		3,346
Reclassification adjustment for realized (loss) gain included in income		(2)		—		—		63
Less: income tax expense		—		—		—		15
Less: reclassification adjustment for realized (loss) gain included in income, net of income tax		(2)		—		—		48
Unrealized loss on cash flow hedges		(1,072)		(3,632)		(4,277)		(2,092)
Less: income tax benefit		(255)		(865)		(999)		(496)
Unrealized loss on cash flow hedges, net of income tax		(817)		(2,767)		(3,278)		(1,596)
Reclassification adjustment for (loss) gain on cash flow hedges		(1,131)		9		(2,059)		9
Less: income tax (benefit) expense		(269)		2		(483)		2
Less: reclassification adjustment for (loss) gain on cash flow hedges, net of income tax		(862)		7		(1,576)		7
Other comprehensive (loss) income		(4,030)		(10,722)		(14,453)		1,695
Comprehensive Income	$	14,592	$	5,325	$	22,392	$	33,850

See Notes to Consolidated Financial Statements - Unaudited

6

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Stockholders’ Equity - Unaudited

													Accumulated
									Additional				Other
	Preferred Stock			Common Stock			Treasury		Paid-in		Retained		Comprehensive
	Shares	Amount		Shares	Amount		Stock		Capital		Earnings		Loss			Total
	(Dollars in thousands)
Balance at March 31, 2023	7,750	$	—	48,600,618	$	532	$	(64,127)	$	539,023	$	222,203	$	(52,140)	$	645,491
Net income	—		—	—		—		—		—		16,047		—		16,047
Other comprehensive loss - available-for-sale securities	—		—	—		—		—		—		—		(7,948)		(7,948)
Other comprehensive loss - cash flow hedges	—		—	—		—		—		—		—		(2,774)		(2,774)
Preferred dividends $13.33 per share	—		—	—		—		—		—		(103)		—		(103)
Issuance of shares from equity-based awards	—		—	52,869		—		—		(77)		—		—		(77)
Warrants exercised, cash settled	—		—	—		—		—		(418)		—		—		(418)
Stock-based compensation	—		—	—		—		—		1,265		—		—		1,265
Balance at June 30, 2023	7,750	$	—	48,653,487	$	532	$	(64,127)	$	539,793	$	238,147	$	(62,862)	$	651,483

													Accumulated
									Additional				Other
	Preferred Stock			Common Stock			Treasury		Paid-in		Retained		Comprehensive
	Shares	Amount		Shares	Amount		Stock		Capital		Earnings		Loss		Total
	(Dollars in thousands)
Balance March 31, 2024	7,750	$	—	49,400,466	$	535	$	(59,720)	$	544,206	$	290,419	$	(60,469)	$	714,971
Net income	—		—	—		—		—		—		18,622		—		18,622
Other comprehensive loss - available-for-sale securities	—		—	—		—		—		—		—		(4,075)		(4,075)
Other comprehensive gain - cash flow hedges	—		—	—		—		—		—		—		45		45
Preferred dividends $20.00 per share	—		—	—		—		—		—		(155)		—		(155)
Issuance of shares from equity-based awards	—		—	86,782		1		—		(30)		—		—		(29)
Open market common shares repurchases	—		—	(237,108)		—		(3,041)		—		—		—		(3,041)
Stock-based compensation	—		—	—		—		—		1,540		—		—		1,540
Balance June 30, 2024	7,750	$	—	49,250,140	$	536	$	(62,761)	$	545,716	$	308,886	$	(64,499)	$	727,878

													Accumulated
									Additional				Other
	Preferred Stock			Common Stock			Treasury		Paid-in		Retained		Comprehensive
	Shares	Amount		Shares	Amount		Stock		Capital		Earnings		Loss			Total
	(Dollars in thousands)
Balance at December 31, 2022	—	$	—	48,448,215	$	530	$	(64,127)	$	530,658	$	206,095	$	(64,557)	$	608,599
Net income	—		—	—		—		—		—		32,155		—		32,155
Other comprehensive gain - available-for-sale securities	—		—	—		—		—		—		—		3,298		3,298
Other comprehensive loss - cash flow hedges	—		—	—		—		—		—		—		(1,603)		(1,603)
Issuance of preferred shares	7,750		—	—		—		—		7,750		—		—		7,750
Preferred dividends $13.33 per share	—		—	—		—		—		—		(103)		—		(103)
Issuance of shares from equity-based awards	—		—	205,272		2		—		(700)		—		—		(698)
Warrants exercised, cash settled	—		—	—		—		—		(418)		—		—		(418)
Stock-based compensation	—		—	—		—		—		2,503		—		—		2,503
Balance at June 30, 2023	7,750	$	—	48,653,487	$	532	$	(64,127)	$	539,793	$	238,147	$	(62,862)	$	651,483

													Accumulated
									Additional				Other
	Preferred Stock			Common Stock			Treasury		Paid-in		Retained		Comprehensive
	Shares	Amount		Shares	Amount		Stock		Capital		Earnings		Loss			Total
	(Dollars in thousands)
Balance at December 31, 2023	7,750	$	—	49,335,888	$	533	$	(58,251)	$	543,556	$	272,351	$	(50,046)	$	708,143
Net income	—		—	—		—		—		—		36,845		—		36,845
Other comprehensive loss - available-for-sale securities	—		—	—		—