EX-99.2 3 ex992.htm EX-99.2 ex992
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Exhibit 99.2
 
CROSSFIRST BANKSHARES, INC. NASDAQ: CFB First Quarter
 
2023 Earnings Presentation April 17, 2023
 
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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 relating to
 
this presentation 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, 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,” “growth,” “approximately,” “believe,”
 
“plan,” “future,” “opportunity,” “anticipate,” “target,”
 
“expectations,” “expect,” “will,” “strategy,” “goal, “focused,” “foresee”
 
or the negative version of those words or other comparable words or phrases of
 
a future or forward-looking nature. These forward-looking statements
 
are not historical facts, and are based on current expectations,
 
estimates and projections about our industry, management’s
 
beliefs and certain assumptions made by management, many of which,
 
by their nature, are inherently uncertain and beyond our control. Accordingly,
 
we caution you that any such forward-looking statements are
 
not 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: a decline in general business and economic conditions
 
and any regulatory responses thereto, including uncertainty and
 
volatility in the financial markets; interest rate fluctuations; our
 
ability to effectively execute our growth strategy and manage
 
our growth, including identifying and consummating suitable mergers
 
and acquisitions, entering new lines of business or offering new or
 
enhanced services or products; the transition away from the
 
London Interbank Offered Rate (LIBOR); fluctuations in fair
 
value of our investments due to factors outside of our control;
 
our ability to successfully manage credit risk and the sufficiency
 
of our allowance; geographic concentration of our markets; economic
 
impact on our commercial real estate and commercial-based
 
loan portfolios, including declines in commercial and residential real
 
estate values; an increase in non-performing assets; our ability to attract,
 
hire and retain key personnel; maintaining and increasing customer
 
deposits, funding availability, liquidity and our ability to raise
 
and maintain sufficient capital; competition from banks, credit unions
 
and other financial services providers; the effectiveness of our risk
 
management framework; accounting estimates; our ability to maintain effective
 
internal control over financial reporting; our ability to keep pace
 
with technological changes; cyber incidents or other failures, disruptions
 
or security breaches; employee error, fraud committed against
 
the Company or our clients, or incomplete or inaccurate information
 
about clients and counterparties; mortgage markets; our ability
 
to maintain our reputation; costs and effects of litigation; environmental
 
liability; risk exposure from transactions with financial counterparties;
 
severe weather, natural disasters, acts of war or terrorism
 
or other external events; and changes in laws, rules,
regulations, interpretations or policies relating to financial institutions.
 
These and other factors that could cause results to differ
 
materially from those described in the forward-looking statements, as
 
well as a discussion of the risks and uncertainties
 
that may affect our business, can be found in our Annual Report
 
on Form 10-K, our Quarterly Reports on Form 10-Q and in other filings
 
we make with the Securities and Exchange Commission. These
 
forward-looking statements are made as of the date hereof,
 
and we disclaim any obligation to update any forward-looking statement
 
or to publicly announce the results of any revisions to any of the
 
forward-looking statements included herein, except as required by
 
law. MARKET AND INDUSTRY DATA. This presentation
 
references certain market, industry and demographic data, forecasts
 
and other statistical information. We have obtained this data, forecasts
 
and information from various independent, third party industry
 
sources and publications. Nothing in the data, forecasts or information
 
used or derived from third party sources should be construed
 
as advice. Some data and other information are also based on our
 
good faith estimates, which are derived from our review of
 
industry publications and surveys and independent sources. We
 
believe that these sources and estimates are reliable but have not
 
independently verified them. Statements as to our market position
 
are based on market data currently available to us. Although we
 
are not aware of any misstatements regarding the economic, employment,
 
industry and other market data presented herein, these estimates
 
involve inherent
 
risks and uncertainties and are based on assumptions that are
 
subject to change. * CrossFirst acquired Farmers & Stockmens
 
Bank (referred to herein as “Central”) on November 22, 2022.
 
2
 
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About non-gaap financial measures CROSSFIRST BANKSAHRES, INC.
 
In addition to disclosing financial measures determined in accordance
 
with U.S. generally accepted accounting principles (GAAP), we disclose
 
non-GAAP financial measures, including “adjusted net income”,
 
“adjusted diluted earnings per common share”, “tangible common
 
stockholders’ equity”, “tangible book value per common share”,
 
“adjusted return on average assets (ROAA)”, “adjusted return on average
 
equity (ROE)” and “adjusted efficiency ratio – fully tax equivalent (FTE).”
 
We consider the use of select non-GAAP financial measures
 
and ratios to be useful for financial and operational decision making
 
and useful in evaluating period-to-period comparisons. We
 
believe that these non-GAAP financial measures provide meaningful
 
supplemental information regarding our performance by excluding certain
 
expenditures or gains that we believe are not indicative of our primary
 
business operating results. We believe that management and
 
investors benefit from referring to these non-GAAP financial measures
 
in assessing our performance and when planning, forecasting, analyzing
 
and comparing past, present and future periods. These non-GAAP
 
financial measures should not be considered a substitute for financial
 
information presented in accordance with GAAP and should
 
not be relied on alone as measures of our performance.
 
The non-GAAP financial measures we present may differ from non-GAAP
 
financial measures used by our peers or other companies.
 
We compensate for these limitations by providing the equivalent
 
GAAP measures whenever we present the non-GAAP financial
 
measures and by including a reconciliation of the impact of the components
 
adjusted for in the non-GAAP financial measure so that both
 
measures and the individual components may be considered
 
when analyzing our performance. A
reconciliation of non-GAAP financial measures to the comparable
 
GAAP financial measures is provided at the end of this presentation. 3
 
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First Quarter 2023 Highlights CROSSFIRST BANKSHARES, INC.
 
Financial Performance Net Income $16.1 Million\ Adjusted(2)
 
Net Income $17.3 Million Diluted EPS $0.33 Adjusted(2) Diluted
 
EPS $0.35 ROE(1) 10.53% Adjusted(1)(2) ROE 11.30% ROAA(1)
 
0.97% Adjusted(1)(2) ROAA 1.04% Profitability Net interest
 
income increased 8% from Q4 2022 and 35% from Q1 2022 due
 
to the higher rate environment, coupled with strong organic loan growth
 
and impacts from the acquisition of Central Fully tax equivalent
 
NIM increased
 
4bps to 3.65% during Q1 2023 and has expanded 36bps from Q1
 
2022(3) Balance Sheet Completed the Central bank core systems conversion
 
during the quarter Loan portfolio increased $275 million from Q4
 
2022 Deposits increased $186 million from Q4 2022 due to a $405
 
million increase in wholesale deposits Issued $7.8 million of Series
 
A Preferred Stock Credit Quality NPAs / assets decreased
 
$2.0 million, or 4bps during the quarter to 0.16% and have declined 48bps
 
from March 31, 2022 NCOs / average loans were 0.12%
 
annualized for the quarter and 0.09% for the trailing 12 months
 
Provisioned $4.4 million during the quarter, largely to support
 
loan growth (1) Ratios are annualized (2) Represents a non-GAAP financial
 
measure, see non-GAAP reconciliation slides at the end of this presentation
 
for more details (3) The incremental Federal income tax
 
rate used in calculating tax exempt income on a tax equivalent
 
basis is 21.0% 4
 
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Diverse loan portfolio CROSSFIRST BANKSAHRES, INC. Loan
 
Mix by Type ($5.6bn) C&I 36% Owner Occupied Real Estate
 
9% Energy 3% CRE 44% Residential Real Estate 7% Other
 
1% Note: Gross loans, (net of unearned income) data as of March
 
31, 2023. 5
 
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Diverse loan portfolio CROSSFIRST BANKSAHRES, INC. CRE
 
Loan Portfolio by Segment Retail 17% Office 14% Industrial 16%
 
1-4 Family Res Construction 7% Hotel 9% Other 24% Multi-Family
 
13% C&I Loan Breakdown by Type Financial Management
 
7% Aircraft & Transportation 5% Merchant Wholesalers 3%
 
Other Industries 41% Manufacturing 10% Real Estate Activity
 
7% Business Loans to Individuals 5% Health Care 6% Engineering
 
& Contracting 8% Restaurants 8% Note: Data as of March 31, 2023.
 
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Asset Quality Performance CROSSFIRST BANKSHARES, INC. Classified
 
Loans / Capital + ACL + RUC $73.3 $81.5 $72.1 $67.7 $67.0
 
10.7% 12.2% 11.2% 10.0% 9.3% Q1 2022 Q2 2022 Q3 2022
 
Q4 2022 Q1 2023 Classified Assets Classified / Total Capital
 
+ ACL + RUC Classified loans remained consistent with the prior
 
quarter while the ratio to Total Capital + ACL + RUC improved
 
to 9.3% Non-performing Assets / Total Assets 0.64% 0.54%
 
3.10% 0.20% 0.16% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023
 
NPAs decreased primarily due to one C&I loan charge
 
-off and paydowns on non-accrual loans Note: Dollar amounts are
 
in millions. 7
 
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Asset Quality Performance CROSSFIRST BANKSHARES, INC. Net
 
Charge-offs (Recoveries) / Average Loans(1) 0.10%
 
0.10% 0.16% -0.02% 0.12% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1
 
2023 Net charge-offs were $1.6 million for Q1 2023, compared
 
to net recoveries of $0.3 million in Q4 2022 and net charge
 
-offs of $1.1 million in Q1 2022 Net charge-offs were 0.09% annualized
 
on a trailing 12-month basis Allowance for Credit Losses / Total Loans
 
$4.9 $5.3 $6.7 $8.7 $8.1 $55.2 $55.8 $55.9 $61.8 $65.1 Q1 2022 Q2
 
2022 Q3 2022 Q4 2022 Q1 2023 ACL RUC ALC + RUC / Total
 
Loans ACL + RUC / Total Loans of 1.30% was consistent
 
with linked quarter and lower than the same period a year
 
ago, primarily due to reduced non-performing loans with specific
 
reserves Allowance for credit losses to non-performing loans at the end
 
of Q1 2023 was 629% Note: Dollar amounts are in millions (1)
 
Ratio is annualized for interim periods. 8
 
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DEPOSIT TRENDS CROSSFIRST BANKSHARES, INC. Total
 
Deposits and % DDA $4,622 $4,744 $4,988 $5,651 $5,837
 
$3,512 $3,581 $3,874 $4,251 $4,867 $1,110 $1,163 $1,114
 
$1,400 $970 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 DDA
 
Interest-bearing Deposits Average deposits for Q1 2023
 
increased $439 million, or 33.7% annualized compared to Q4 2022
 
Cost of deposits increased 54bps this quarter, due to market rate
 
increases and deposit mix changes Non-interest-bearing deposits were
 
17% of total deposits this quarter Top 25 deposit relationships represent
 
23% of total deposits Cost of Deposits 0.31% 0.42% 1.20% 2.03%
 
2.57% 9
 
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Net Interest Margin CROSSFIRST BANKSAHRES, INC. Yield
 
on Loans & Cost of Deposits 4.00% 0.31% 4.28% 0.42% 5.08%
 
1.20% 5.93% 2.03% 6.56% 2.57% Q1 2022 Q2 2022 Q3
 
2022 Q4 2022 Q1 2023 Yield on Loans Cost of Total Deposits
 
Net Interest Margin – Fully Tax Equivalent (FTE)(1) 3.29%
 
3.52% 3.56% 3.61% 3.65% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1
 
2023 Fully tax-equivalent NIM increased 4bps from Q4 2022,
 
due to the benefit of non-interest-bearing deposits Loan yields increased
 
63bps in the quarter due to repricing of existing loans and organic growth
 
Cost of deposits increased 54bps from Q4 2022 due to continued
 
pricing pressure and a mix shift into higher cost products Loan to
 
deposit ratio increased to 97% from 95% in Q4 2022 Ratio is annualized
 
for interim periods; the incremental Federal income tax rate used
 
in calculating tax exempt income on a tax equivalent basis is 21.0%
 
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Net Interest Income Sensitivity CROSSFIRST BANKSAHRES, INC. Net
 
Interest Income Impact From Rate Changes (5.27%) (0.58%) (1.69%)
 
0.05% (0.66%) 0.07% 0.64% (0.04%) 1.31% (0.09%) 2.01% (0.11%)
 
-300 bps -200 bps -100 bps 0 bps 100 bps 200 bps 300 bps Rate
 
Shock Rate Ramp Loans: Rate Reset and Cash Flow Profile 59% 10%
 
9% 19% 3% 1-3 4-12 1-2 2-5 >5 Years Months Months Years
 
Years Roughly 69% of Company’s earning assets reprice
 
or mature over the next 12 months, with 49% in month one Note: Data
 
as of March 31, 2023 * Rate Shock analysis: measures instantaneous
 
parallel shifts in market rates Rate Ramp analysis: rate changes occur
 
gradually over 12 months time Balance sheet size and mix held
 
constant from month end position and includes average YTD
 
loan fees (excluding PPP fees) 11
 
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EXPENSE MANAGEMENT CROSSFIRST BANKSAHRES, INC.
 
$27.7 $29.2 $28.5 $36.4 $38.1 $5.2 $7.1 $5.4 $8.3 $9.6 $2.1 $2.4 $2.1
 
$3.3 $2.9 $2.5 $2.6 $2.7 $2.8 $3.0 $17.9 $17.1 $18.3 $22.0 $22.6
 
Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Salaries & Benefits
 
Occupancy Data Processing, Software & Comm Other Q1 2023
 
expenses included seasonal resetting of compensation accruals
 
and merit increases as well as continued investments in new markets,
 
including Central, that have yet to reach full scale Expenses in Q1
 
2023 included $1.5 million of acquisition-related items compared
 
to $3.6 million in Q4 2022 Note: Dollars are in millions and amounts
 
shown are as of the end of the period unless otherwise specified.
 
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AMPLE LIQUIDITY AND FLEXIBILITY CROSSFIRST BANKSAHRES,
 
INC. Cash and Cash Available-for-Sale Equivalents Securities*
 
+ $263M $751M Available Credit Lines, FHLB, and FRB Available
 
Brokered Deposits & Wholesale Funding $968M + $297M On-Balance
 
Sheet Liquidity Off-Balance Sheet Liquidity $1.014B $1.265B Total
 
Liquidity $2.279B 33% of Total Assets - > Market Value
 
Net Gain + '' Pledgeable _L Remaining $222M s / $244M s / 1
 
$285M s •Ava i la ble-for-Sa le Securities $751M Note: Data
 
as of March 31, 2023 13
 
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SECURITIES PORTFOLIO CROSSFIRST BANKSAHRES, INC.
 
Municipal - Taxable, 1% Municipal - Tax-Exempt, 63%
 
CMO (Fixed), 1% SBA (Fixed), 11% Other, 2% MBS (Fixed),
 
22% Fair Value at March 31, 2023 $751 million At the end of
 
Q1 2023, the portfolio’s duration was approximately 5.2
 
years The fully tax equivalent yield for Q1 2023 increased 12bps to
 
3.31% The securities portfolio has net unrealized losses of approximately
 
$68 million as of March 31, 2023 During Q1 2023, $93 million of
 
securities were purchased at an average tax-equivalent yield of 5.00%
 
and there were $4 million in MBS paydowns 14
 
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DEPOSIT DIVERSITY & CHARACTERISTICS CROSSFIRST
 
BANKSAHRES, INC. Deposits by Customer Type Wholesael 13.3%
 
Business 69.7% Individual 17.0% Average Client Account
 
Balances'21 S in rhouzandz Deposits CDs Total Individual $ 56 $ 170
 
$ 70 Business 214 438 230 Total $ 132 259 $ 145 Customer Deposits
 
by State Kansas Oklahoma 36.1% 17.3% Other Illinois 5.6%
 
52% Texas Missouri 121% 9.3% California Arizona 35% 2.7%
 
Colorado 6.3% New Mexico 1.9% Business Accounts by Industry (by
 
NAICS Code) Trusts, Estates, & Agency Accts 153%
 
Banking Inst STrust Companies 5.6% Other Services 3.6% Investment
 
Pools & Funds 35% Other Financial Investment Activities 35%
 
Professional, Scientific, & Tech Svcs 33% Construction 3.1% Utilities
 
2.4% Securities & Oth Fin Activities 23% Non-residential Real Estate
 
22% Health Care & Social Assistance 22% Educational Services
 
2.1% Residential Real Estate 2.1% Manufacturing 1.7% Public Admin
 
1.6% Mgmt of Companies & Enterprises 1.4% Accommodation
 
& Food Svcs 1.4% Other Real Estate Leasing & Svcs 13% Estimated
 
Uninsured Deposit Analysis ($ in millions) Estimated Uninsured
 
Deposits' S 2,367 Less: Pass-thru Deposits 331 Estimated Uninsur
 
ed Deposits Excluding Pass-thru S 2,036 Total Deposits $ 5,837
 
Estimated Uninsured Deposits (Excluding Pass-thru) as % of Total
 
Deposits 35% Note: All deposit data as of March 31, 2023 ; Average
 
deposit data for the quarter-ended March 31, 2023 Estimated
 
amount of uninsured deposits as reported on the March 31, 2023
 
Call Report for CrossFirst Bank Excludes internal accounts, ICS,
 
CDARS, public funds and pass-thru insurance deposits 15
 
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2023 GUIDANCE CROSSFIRST BANKSAHRES, INC. Business
 
Driver Q4 2022 Q1 2023 Loans 8-10% core loan growth Unchanged
 
Net Interest Margin (NIM) 3.55% to 3.65% 3.40% to 3.55% Non-interest
 
Expense $37-$38 million range in Q1 $35-$36 million per
 
quarter Combined ACL / Loans 1.30% to 1.45% Unchanged Effective
 
Tax Rate 20-22% Unchanged 16
 
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NON-GAAP RECONCILIATIONS CROSSFIRST BANKSAHRES,
 
INC. 3/31/2023 Adjusted net income: Net income S 16,108 Add:Acquisition
 
costs 1,477 Add: Acquisition - Day 1 CECL provision -
 
Add: Employee separation - Less: Tax effect111 (310)
 
Adjusted net income Diluted weighted average common shares
 
outstanding Diluted earnings per common share Adjusted diluted
 
earnings per common share Quarter Ended (Dollars in thousands,
 
except per share data) S 11,946 S 17,280 S 15,545 S 16,828
 
3,570 81 239 - 4,400 - - - - - 1,063 - (2,045) (7) (273) - $ % $ $ 3/31/2023
 
12/31/2022 Quarter Ended 9/30/2022 6/30/2022 3/31/2022
 
Adjusted return on average assets: Net income Adjusted net
 
income Average assets Return on average assets Adjusted return
 
on average assets (Dollars in thousands) $ 16,108 S 11,946
 
$ 17,280 S 15,545 S 16,828 17275 17,871 17,344 16,574 16,828 $
 
6,712,801 $ 6,159,783 S 5,764347 S 5,545,657 S 5,563,738 Quarter
 
Ended (Dollars in thousands) Adjusted return on average
 
equity: Net income S 16,108 $ 11,946 $ 17,280
 
$ 15,545 S 16,828 Adjusted net income 17275 17,871 17,344
 
16,574 16,828 Average equity $ 620,210 $ 589,587 $ 613206
 
$ 614541 S 653,747 Return on average equity Adjusted return
 
on average equity Represents the tax impact of the adjustments at a
 
tax rate of 21.0%, plus permanent tax expense associated with
 
merger related transactions and permanent tax benefit associated
 
with stock-based grants 17
 
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NON-GAAP Reconciliations CROSSFIRST BANKSHARES, INC. 3/31/2023
 
Tangible common stockholders' equity: Total stockholders'
 
equity Less: goodwill and other intangible assets Less: preferred
 
stock Tangible common stockholders' equity Tangible book value per
 
common share: Tangible common stockholders' equity Common
 
shares outstanding at end of period Book value per common
 
share Tangible book value per common share $ 645,491 28,259
 
7,750 $ 609,482 48,600,618 Quarter Ended 12/31/2022 9/30/2022
 
6/30/2022 (Dollars in thousands, except per share data) $ 608,599
 
$ 580,547 $ 608,016 $ 623,199 29,081 71 91 110 $ 579,518
 
$ 580,476 $ 607,925 $ 623,089 48,448,215 48,787,696 49,535,949
 
49,728,253 $ $ $ $ 3/31/2023 Adjusted Efficiency Ratio -
 
Fully Tax Equivalent (FTE)(1> Non-interest expense $ 38,092
 
$ Less: Acquisition costs (1,477) Less: Core deposit intangible amortization
 
(822) Less: Employee separation - Adjusted Non-interest expense (numerator)
 
$ 35,793 $ Net interest income 58,221 Tax equivalent interest
 
income(l) 797 Non-interest income (loss) 4,421 Total tax-equivalent
 
income (denominator) $ 63,439 $ Efficiency Ratio 60.81 % Adjusted
 
Efficiency Ratio - Fully Tax Equivalent (FTE)*'1 56.42 % 12/31/2022
 
Quarter Ended 9/30/2022 6/30/2022 3/31/2022 (Dollars in
 
thousands) 36,423 $ 28,451 $ 29,203 $ 27,666 (3,570) (81) (239)
 
- (291) - - - - - (1,063) - 32,562 $ 28,370 $ 27,901 $ 27,666
 
54,015 49,695 46,709 43,115 818 820 808 775 4,359 3,780 4,201 4,942
 
59,192 $ 54,295 $ 51,718 $ 48,832 62.40 % 53.20 % 57.36 % 57.57
 
% 55.01 % 52.25 % 53.95 % 56.66 % (1) Tax exempt income
 
(tax-free municipal securities) is calculated on a tax equivalent
 
basis. The incremental rate used is 21.0%. 18