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 September 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 October 25, 2024, the registrant had 49,300,685 shares of common stock, par value $0.01, outstanding.

CROSSFIRST BANKSHARES, INC.

Form 10-Q for the Quarter Ended September 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	5
Consolidated Statements of Operations – Unaudited	6
Consolidated Statements of Comprehensive Income (Loss) – Unaudited	7
Consolidated Statements of Stockholders’ Equity – Unaudited	8
Consolidated Statements of Cash Flows – Unaudited	9
Notes to Consolidated Financial Statements – Unaudited	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
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	65
Item 5. Other Information	65
Item 6. Exhibit Index	67
Signature	68

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; the proposed merger of CrossFirst Bankshares, Inc., into First Busey Corporation (“Busey”), 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,” “CrossFirst,” 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: the possibility that the proposed transaction with Busey will not close when expected or at all because required regulatory, stockholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated (and the risk that required regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction); the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all and to successfully integrate CrossFirst’s operations and those of Busey; effects of the announcement, pendency or completion of the proposed transaction on the ability of CrossFirst to retain clients and retain and hire key personnel and maintain relationships with our suppliers, and on our operating results and business generally; 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 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.

3

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.

4

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Financial Condition - Unaudited

	September 30, 2024		December 31, 2023
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	236,937	$	255,229
Available-for-sale securities - taxable		454,077		413,217
Available-for-sale securities - tax-exempt		329,918		353,436
Loans, net of unearned fees		6,331,049		6,127,690
Allowance for credit losses on loans		77,757		73,462
Loans, net of the allowance for credit losses on loans		6,253,292		6,054,228
Premises and equipment, net		68,990		70,869
Restricted equity securities		3,715		3,950
Interest receivable		39,485		37,294
Foreclosed assets held for sale		5,248		—
Goodwill and other intangible assets, net		28,620		31,335
Bank-owned life insurance		72,290		70,810
Other		89,620		90,312
Total assets	$	7,582,192	$	7,380,680
Liabilities and stockholders’ equity
Deposits
Non-interest-bearing	$	900,794	$	990,458
Savings, NOW and money market		3,746,812		3,669,726
Time		1,986,670		1,831,092
Total deposits		6,634,276		6,491,276
Federal Home Loan Bank advances		76,221		77,889
Other borrowings		8,598		8,950
Interest payable and other liabilities		91,388		94,422
Total liabilities		6,810,483		6,672,537
Stockholders’ equity
Preferred stock, $0.01 par value: Authorized - 5,000,000 shares; issued - 7,750 shares at September 30, 2024 and December 31, 2023		—		—
Common stock, $0.01 par value: Authorized - 200,000,000 shares; issued - 53,638,827 and 53,326,641 shares at September 30, 2024 and December 31, 2023, respectively		536		533
Treasury stock, at cost: 4,340,033 and 3,990,753 shares held at September 30, 2024 and December 31, 2023, respectively		(62,753)		(58,251)
Additional paid-in capital		547,138		543,556
Retained earnings		328,380		272,351
Accumulated other comprehensive loss		(41,592)		(50,046)
Total stockholders’ equity		771,709		708,143
Total liabilities and stockholders’ equity	$	7,582,192	$	7,380,680

See Notes to Consolidated Financial Statements - Unaudited

5

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Operations - Unaudited

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(Dollars in thousands, except per share data)
Interest Income
Loans, including fees	$	118,566	$	103,631	$	342,011	$	292,231
Available-for-sale securities - taxable		5,172		3,089		14,752		7,560
Available-for-sale securities - tax-exempt		2,426		3,365		7,533		10,730
Deposits with financial institutions		2,375		2,444		6,341		6,067
Dividends on bank stocks		113		127		352		753
Total interest income		128,652		112,656		370,989		317,341
Interest Expense
Deposits		66,736		56,297		192,547		141,685
Fed funds purchased and repurchase agreements		—		5		—		51
Federal Home Loan Bank Advances		689		1,003		2,602		7,128
Other borrowings		64		224		191		590
Total interest expense		67,489		57,529		195,340		149,454
Net Interest Income		61,163		55,127		175,649		167,887
Provision for Credit Losses		3,533		3,329		7,571		10,390
Net Interest Income after Provision for Credit Losses		57,630		51,798		168,078		157,497
Non-Interest Income
Service charges and fees on client accounts		2,320		2,249		6,757		6,188
ATM and credit card interchange income		1,523		1,436		4,578		3,913
Gain on sale of loans		170		739		1,147		2,131
Income from bank-owned life insurance		523		437		1,480		1,266
Swap fees and credit valuation adjustments, net		194		57		440		231
Other non-interest income		1,235		1,063		2,853		2,452
Total non-interest income		5,965		5,981		17,255		16,181
Non-Interest Expense
Salaries and employee benefits		23,346		22,017		70,093		68,700
Occupancy		3,181		3,183		9,568		9,211
Professional fees		2,517		1,945		4,572		5,533
Deposit insurance premiums		1,845		1,947		5,602		5,359
Data processing		771		904		3,460		3,203
Advertising		723		593		1,772		1,994
Software and communication		1,633		1,898		5,290		5,204
Foreclosed assets, net		36		—		289		128
Core deposit intangible amortization		878		922		2,715		2,546
Other non-interest expense		3,679		2,945		10,478		9,980
Total non-interest expense		38,609		36,354		113,839		111,858
Net Income Before Taxes		24,986		21,425		71,494		61,820
Income tax expense		5,337		4,562		15,000		12,802
Net Income	$	19,649	$	16,863	$	56,494	$	49,018
Basic Earnings Per Common Share	$	0.39	$	0.34	$	1.13	$	1.00
Diluted Earnings Per Common Share	$	0.39	$	0.34	$	1.12	$	0.99

See Notes to Consolidated Financial Statements - Unaudited

6

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Comprehensive Income (Loss) - Unaudited

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(Dollars in thousands)
Net Income	$	19,649	$	16,863	$	56,494	$	49,018
Other Comprehensive Income (Loss)
Unrealized gain (loss) on available-for-sale securities		25,271		(41,604)		9,101		(37,083)
Less: income tax expense (benefit)		5,916		(9,902)		2,497		(8,727)
Unrealized gain (loss) on available-for-sale securities, net of income tax		19,355		(31,702)		6,604		(28,356)
Reclassification adjustment for realized gain (loss) included in income		59		(60)		59		3
Less: income tax expense (benefit)		14		(14)		14		1
Less: reclassification adjustment for realized gain (loss) included in income, net of income tax		45		(46)		45		2
Unrealized gain (loss) on cash flow hedges		3,606		(2,289)		(671)		(4,381)
Less: income tax expense (benefit)		849		(545)		(150)		(1,041)
Unrealized gain (loss) on cash flow hedges, net of income tax		2,757		(1,744)		(521)		(3,340)
Reclassification adjustment for (loss) gain on cash flow hedges		(1,093)		93		(3,152)		102
Less: income tax (benefit) expense		(253)		22		(736)		24
Less: reclassification adjustment for (loss) gain on cash flow hedges, net of income tax		(840)		71		(2,416)		78
Other comprehensive income (loss)		22,907		(33,471)		8,454		(31,776)
Comprehensive Income (Loss)	$	42,556	$	(16,608)	$	64,948	$	17,242

See Notes to Consolidated Financial Statements - Unaudited

7

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 June 30, 2023	7,750	$	—	48,653,487	$	532	$	(64,127)	$	539,793	$	238,147	$	(62,862)	$	651,483
Net income	—		—	—		—		—		—		16,863		—		16,863
Other comprehensive loss - available-for-sale securities	—		—	—		—		—		—		—		(31,656)		(31,656)
Other comprehensive loss - cash flow hedges	—		—	—		—		—		—		—		(1,815)		(1,815)
Preferred dividends $20.00 per share	—		—	—		—		—		—		(155)		—		(155)
Issuance of shares from equity-based awards	—		—	43,904		1		—		165		—		—		166
Acquisition - purchase accounting	—		—	597,645		—		5,932		1,025		—		—		6,957
Stock-based compensation	—		—	—		—		—		1,208		—		—		1,208
Balance at September 30, 2023	7,750	$	—	49,295,036	$	533	$	(58,195)	$	542,191	$	254,855	$	(96,333)	$	643,051

													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 June 30, 2024	7,750	$	—	49,250,140	$	536	$	(62,761)	$	545,716	$	308,886	$	(64,499)	$	727,878
Net income	—		—	—		—		—		—		19,649		—		19,649
Other comprehensive gain - available-for-sale securities	—		—	—		—		—		—		—		19,310		19,310
Other comprehensive gain - cash flow hedges	—		—	—		—		—		—		—		3,597		3,597
Preferred dividends $20.00 per share	—		—	—		—		—		—		(155)		—		(155)
Issuance of shares from equity-based awards	—		—	48,654		—		—		67		—		—		67
Open market common shares repurchases	—		—	—		—		8		—		—		—		8
Stock-based compensation	—		—	—		—		—		1,355		—		—		1,355
Balance at September 30, 2024	7,750	$	—	49,298,794	$	536	$	(62,753)	$	547,138	$	328,380	$	(41,592)	$	771,709

													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	—		—	—		—		—		—		49,018		—		49,018
Other comprehensive loss - available-for-sale securities	—		—	—		—		—		—		—		(28,358)		(28,358)
Other comprehensive loss - cash flow hedges	—		—	—		—		—		—		—		(3,418)		(3,418)
Issuance of preferred shares	7,750		—	—		—		—		7,750		—		—		7,750
Preferred dividends $33.33 per share	—		—	—		—		—		—		(258)		—		(258)
Issuance of shares from equity-based awards	—		—	249,176		3		—		(535)		—		—		(532)
Warrants exercised, cash settled	—		—	—		—		—		(418)		—		—		(418)
Acquisition - purchase accounting	—		—	597,645		—		5,932		1,025		—		—		6,957
Stock-based compensation	—		—	—		—		—		3,711		—		—		3,711
Balance at September 30, 2023	7,750	$	—	49,295,036	$	533	$	(58,195)	$	542,191	$	254,855	$	(96,333)	$	643,051

Accumulated