EX-99.2 4 ex992.htm EX-99.2 ex992
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Exhibit 99.2
CROSSFIRST BANKSHARES, INC. NASDAQ: CFB Second Quarter
 
2023 Earnings Presentation July 17, 2023
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LEGAL DISCLAIMER CROSSFIRST BANKSAHRES INC. FORWARD
 
-LOOKING STATEMENTS. The financial results
 
in this presentation reflect preliminary, unaudited results,
 
which are not final until the Company’s Quarterly Report on
 
Form 10-Q is filed. This presentation and oral statements made
 
relating to this presentation contain forward-looking statements. These
 
forward-
 
looking statements reflect our current views and include, but are not limited
 
to, statements regarding our business plans, expansion targets and
 
opportunities, the expected completion and timing of our acquisition
 
of Canyon Bancorporation, Inc. and its wholly owned subsidiary,
 
Canyon Community Bank, National Association (collectively,
 
"Canyon"), and future financial performance. These statements are
 
often, but not always, made through the use of words or phrases
 
such as “positioning,” “growth,” “approximately,” “believe,
 
 
“plan,” “future,” “opportunity,” “anticipate,” “target,” “expectations,”
 
“expect,” “will,” “strategy,” “goal, “focused,” “foresee
 
 
or the negative version of those words or other comparable words or phrases
 
of a future or forward-looking nature. These forward-looking statements
 
are not historical facts, and are based on current expectations,
 
estimates and projections about our industry, management’s
 
beliefs and certain assumptions made by management, many of which,
 
by their nature, are inherently uncertain
 
and beyond our control. Accordingly, we caution you that any
 
such forward-looking statements are not a guarantee
 
of future performance and are subject to risks, assumptions, estimates and
 
uncertainties that are difficult to predict. Although we believe
 
that the expectations reflected in these forward-looking statements
 
are reasonable as of the date made, actual results may prove to be
 
materially different from the results expressed or implied by the forward
 
-looking statements. There are or will be
important factors that could cause our actual results to differ materially
 
from those indicated in these forward-looking statements,
 
including, but not limited to, the following: a decline in general
 
business and economic conditions and any regulatory responses thereto,
 
including uncertainty and volatility in the financial markets; interest
 
rate fluctuations; our ability to effectively execute our growth strategy
 
and manage our growth, including identifying and consummating suitable
 
mergers and acquisitions, entering new lines of business or offering
 
new or enhanced services or products; the transition away from
 
the London Interbank Offered Rate (LIBOR); fluctuations in fair
 
value of our investments due to factors outside of our control; our
 
ability to successfully manage credit risk and the sufficiency
 
of our allowance; geographic concentration of our markets; economic
 
impact on our commercial
 
real estate and commercial-based loan portfolios, including declines
 
in commercial and residential real estate values; an increase
 
in non-performing assets; our ability to attract, hire and retain key personnel;
 
maintaining and increasing customer deposits, funding availability,
 
liquidity and our ability to raise and maintain sufficient capital;
 
competition from banks, credit unions and other financial services
 
providers; the effectiveness of our risk management framework;
 
accounting estimates; our ability to maintain effective internal control
 
over financial reporting; our ability to keep pace with technological
 
changes; cyber incidents or other failures, disruptions or security
 
breaches; employee error, fraud committed against the Company
 
or our clients, or incomplete or inaccurate information about clients
 
and counterparties; mortgage markets; our ability to maintain
 
our reputation;
 
costs and effects of litigation; environmental liability; risk exposure
 
from transactions with financial counterparties; severe weather,
 
natural
disasters, acts of war or terrorism or other external events; and changes
 
in laws, rules, regulations, interpretations or policies relating
 
to financial institutions. These and other factors that could cause
 
results to differ materially from those described in the forward
 
-looking statements, as well as a discussion of the risks and uncertainties
 
that may affect our business, can be found in our Annual
 
Report on Form 10-K, our Quarterly Reports on Form 10-Q and in
 
other filings we make with the Securities and Exchange Commission.
 
These forward-looking statements are made as of the date hereof,
 
and we disclaim any obligation to update any forward-looking statement
 
or to publicly announce the results of any revisions to any of the
 
forward-looking statements included herein, except as required by
 
law. MARKET AND INDUSTRY DATA. This presentation
 
references certain market, industry and demographic data,
 
forecasts and other statistical information. We have obtained
 
this data, forecasts and information from various independent,
 
third party industry sources and publications. Nothing in the
 
data, forecasts or information used or derived from third party
 
sources should be construed as advice. Some data and other
 
information are also based on our good faith estimates, which are derived
 
from our review of industry publications and surveys and independent
 
sources. We believe that these sources and estimates are
 
reliable but have not independently verified them. Statements as to our
 
market position are based on market data currently available
 
to us. Although we are not aware of any misstatements regarding the economic,
 
employment, industry and other market data presented herein,
 
these estimates involve inherent risks and uncertainties and are
 
based on assumptions that are subject to change. * CrossFirst acquired
 
Farmers & Stockmens Bank (referred to herein as “Central”)
 
on November 22, 2022. 2
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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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SECOND QUARTER 2023 HIGHLIGHTS CROSSFIRST BANKSAHRES
 
INC. Net Income $16.0 Diluted EPS ROE*1* ROAA*1* Million
 
$033 9.94% 0.93% Financial Performance Adjusted*2* Adjusted*2*
 
Adjusted*1»2* Adjusted*1**2* Net Income Diluted EPS ROE
 
ROAA $173 Million $035 10.74% 1.00% Profitability Received
 
regulatory approval for previously announced acquisition of
 
Canyon Bancorporation, Inc., which is expected to add low-cost liquidity
 
and deepen our Arizona franchise Fully tax equivalent NIM(3)
 
narrowed 38 basis points to 3.27%, as continued pricing pressure
 
on deposits & deposit mix changes outweighed the increases
 
from loans Identified meaningful non-interest expense savings for the
 
remainder of 2023, advancing our efficiency improvement goal
 
Balance Sheet Loans grew $149 million, or 2.6% for the quarter
 
and 7.9% year-to-date Non-interest-bearing deposits stabilized, decreasing
 
4% from Q1 2023 Book value per share grew to $13.39, while tangible
 
book value per common share(2) grew to $12.67 Credit Quality
 
Credit metrics remain strong with annualized NCOs / average
 
loans of 0.04% and NPAs / assets of 0.19%, which is a decline of
 
35 basis points from June 30, 2022 Provisioned $2.6 million during
 
the quarter, largely to support loan growth (1) Ratios are annualized
 
(2) Represents a non-GAAP financial measure, see non-GAAP reconciliation
 
slides at the end of this presentation for more details (3) The
 
incremental Federal income tax rate used in calculating tax exempt
 
income on a tax equivalent basis is 21.0% 4
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DIVERSE LOAN PORTFOLIO CROSSFIRST BANKSAHRES INC.
 
Loan Mix by Type ($5.8bn) Commercial 36% Energy 4%
 
CRE - Owner-Occupied 9% CRE - Non-Owner-Occupied 42% Residential
 
Real Estate 8% Consumer 1% Note: Gross loans, (net of unearned
 
income) data as of June 30, 2023. 5
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DIVERSE LOAN PORTFOLIO CROSSFIRST BANKSAHRES INC.
 
CRE – Non-Owner-Occupied Loan Portfolio by Segment Retail 16%
 
Office 13% Industrial 17% 1-4 Family Res Construction 7%
 
Hotel 9% Other 25% Multi-Family 13% Commercial Loan Breakdown
 
by Type Financial Management 6% Aircraft
 
& Transportation 6% Merchant Wholesalers 3% Other Industries 36%
 
Manufacturing 11% Real Estate Activity 6% Business Loans to
 
Individuals 5% Credit Related Activities 7% Health Care 6% Engineering
 
& Contracting 7% Restaurants 7% Note: Data as of June 30, 2023.
 
6
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ASSET QUALITY PERFORMANCE CROSSFIRST BANKSAHRES
 
INC. Classified Loans / Capital + ACL + RUC(1) $81.5 $72.1
 
$67.7 $67.0 $69.5 12.0% 11.2% 10.0% 9.3% 9.6% Q2 2022 Q3
 
2022 Q4 2022 Q1 2023 Q2 2023 Classified Assets Classified/Total
 
Capital + ACL + RUC Classified Loans and the ratio of Classified Loans
 
to Total Capital + ACL + RUC increased slightly but remain consistent
 
with prior quarters Non-performing Assets / Total Assets
 
0.54% 0.31% 0.20% 0.16% 0.19% Q2 2022 Q3 2022 Q4 2022
 
Q1 2023 Q2 2023 NPAs increased primarily due to an increase
 
in non-accrual loans, partially offset by the sale of one OREO property
 
Note: Dollar amounts are in millions (1) RUC includes the accrual
 
for off-balance sheet credit risk for unfunded commitments. 7
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ASSET QUALITY PERFORMANCE CROSSFIRST BANKSAHRES
 
INC. Net Charge-offs (Recoveries) / Average
 
Loans(1) 0.10% 0.16% -0.02% 0.12% 0.04% Q2 2022 Q3 2022 Q4 2022 Q1
 
2023 Q2 2023 Net charge-offs were $0.6 million for Q2 2023, compared
 
to $1.6 million in Q1 2023 and $1.1 million in Q2 2022 Net charge-offs
 
were 0.07% annualized on a trailing 12-month basis Allowance for
 
Credit Losses + RUC(2) / Total Loans 1.35% 1.34% 1.31% 1.30%
 
1.30% $5.3 $6.7 $8.7 $8.1 $7.7 $55.8 $55.9 $61.8 $65.1 $67.6
 
Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 ACL RUC ACL
 
+ RUC/Total Loans ACL + RUC / Total Loans of 1.30%
 
was consistent with linked quarter and lower than the same period
 
a year ago, primarily due to lower specific reserves on non-performing
 
loans Allowance for credit losses to non-performing loans at the
 
end of Q2 2023 was 508% Note: Dollar amounts are in millions
 
(1) Ratio is annualized for interim periods. (2) RUC includes the accrual
 
for off-balance sheet credit risk for unfunded commitments. 8
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DEPOSIT TRENDS CROSSFIRST BANKSAHRES INC. Total
 
Deposits and % DDA $4,744 $4,988 $5,651 $5,837 $6,100
 
$3,581 $3,874 $4,251 $4,867 $5,172 $1,163 $1,114 $1,400 $970 $928
 
Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 DDA Interest-bearing
 
Deposits Cost of Deposits 0.42% 1.20% 2.03% 2.57% 3.33%
 
Total deposits increased 4.5% due to an increase in wholesale
 
funding sources at quarter-end Approximately one-third of the time
 
deposit increase was from new client money & shifts from other
 
deposit categories with the balance representing an increase
 
in wholesale funding Non-interest-bearing deposits stabilized, decreasing
 
4% from Q1 2023 Cost of deposits increased 76bps this quarter,
 
due to market rate increases and deposit mix changes Non-interest
 
-bearing deposits were 15% of total deposits this quarter Top 25
 
deposit relationships represent 20% of total deposits Note: Dollars
 
are in millions and amounts shown are as of the end of the period. 9
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NET INTEREST MARGIN CROSSFIRST BANKSAHRES INC. Yield
 
on Loans & Cost of Deposits 4.28% 0.42% 5.08% 1.20% 5.93%
 
2.03% 6.56% 2.57% 6.87% 3.33% Q2 2022 Q3 2022 Q4 2022
 
Q1 2023 Q2 2023 Yield on Loans Cost of Total Deposits
 
Net Interest Margin – Fully Tax Equivalent (FTE)(1)
 
3.52% 3.56% 3.61% 3.65% 3.27% Q2 2022 Q3 2022 Q4 2022 Q1 2023
 
Q2 2023 Fully tax-equivalent NIM decreased 38bps from Q1 2023
 
Loan yields increased 31bps in the quarter due to repricing of existing
 
loans and organic growth Cost of deposits increased 76bps from
 
Q1 2023 due to deposit pricing pressure and the decrease in non-interest-bearing
 
deposits experienced late in Q1 2023 that impacted Q2 2023
 
average balances Loan to deposit ratio decreased to 95% from 97%
 
in Q1 2023 (1) Ratio is annualized for interim periods; the incremental
 
Federal income tax rate used in calculating tax exempt income on a tax
 
equivalent basis is 21.0% 10
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NET INTEREST INCOME SENSITIVITY CROSSFIRST BANKSAHRES
 
INC. Net Interest Income Impact From Rate Changes (4.51)% (0.73)%
 
(2.52)% (0.42)% (1.40)% (0.36)% 0.93% (0.14)% 2.19% 0.01%
 
3.50% 0.17% -300 bps -200 bps -100 bps 100 bps 200 bps 300 bps
 
Rate Shock Rate Ramp Loans: Rate Reset and Cash Flow Profile
 
59% 10% 9% 19% 3% 1-3 4-12 1-2 2-5 >5 Years Months Months
 
Years Years Roughly 69% of Company’s earning
 
assets reprice or mature over the next 12 months, with 47%
 
in month one Note: Data as of June 30, 2023 * Rate Shock analysis:
 
measures instantaneous parallel shifts in market rates Rate Ramp analysis:
 
rate changes occur gradually over 12 months time Balance
 
sheet size and mix held constant from month end position and includes
 
average YTD loan fees (excluding PPP fees) 11
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Expense Management CROSSFIRST BANKSAHRES INC. $29.2 $28.5
 
$36.4 $38.1 $37.4 $7.1 $5.4 $8.3 $9.6 $7.5 $2.4 $2.1 $3.3 $2.9
 
$2.7 $2.6 $2.7 $2.8 $3.0 $3.1 $17.1 $18.3 $22.0 $22.6 $24.1 Q2
 
2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Salaries & Benefits
 
Occupancy Data Processing, Software & Comm Other Q2 2023
 
expenses included $0.3 million of acquisition-related expenses,
 
mostly professional fees, and $1.3 million of employee separation
 
costs, compared to $1.5 million of acquisition-related expenses
 
in Q1 2023 Reduced discretionary spending contributed to the decreases
 
in other expenses compared to Q1 2023 Salaries & benefits were
 
higher year over year due the addition of employees as part of
 
the Colorado and New Mexico acquisition and merit increases Identified
 
meaningful non-interest expense savings for the remainder of
 
2023, advancing our efficiency improvement goal Note: Dollars
 
are in millions and amounts shown are as of the end of the period unless
 
otherwise specified. 12
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AMPLE LIQUIDITY AND FLEXIBILITY CROSSFIRST BANKSAHRES
 
INC. Cash and Cash Equivalents L. A Available-for-Sale
 
Securities* Available Brokered Deposits & Wholesale Funding
 
Available Credit Lines, FHLB, and FPB $342M i $744M $372M
 
*■ $1,121 B On-Balance Sheet Liquidity Off-Balance
 
Sheet Liquidity $1.08B + $1.493B Total Liquidity $2.579B 36% of
 
Total Assets *Available-for-Sale Securities $744M =
 
Market Value Net Gain $169M + Pledgeable $282M + Remaining
 
$293M Note: Data as of June 30, 2023 13
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SECURITIES PORTFOLIO CROSSFIRST BANKSAHRES INC.
 
MBS (Fixed), 22% Municipal - Taxable, 1% Municipal - Tax
 
-Exempt, 61% CMO (Fixed), 1% SBA (Fixed), 14% Other,
 
1% Fair Value at June 30, 2023 $744 million At the end
 
of Q2 2023, the portfolio’s duration was approximately 5.3 years
 
The fully tax equivalent yield for Q2 2023 increased 13bps to 3.44% The
 
securities portfolio had net unrealized losses of approximately $78
 
million as of June 30, 2023 During Q2 2023, $27 million of securities
 
were purchased at an average tax-equivalent yield of 4.72%, and we
 
had $5 million in MBS paydowns 14
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2023 GUIDANCE CROSSFIRST BANKSAHRES INC. Business Driver
 
Q1 2023 Q2 2023 Loans 8-10% core loan growth Unchanged Net
 
Interest Margin (NIM) 3.40% to 3.55% 3.20% to 3.35% Non-inter
 
est Expense(1) $35-$36 million per quarter $34-$35 million per quarter
 
Combined ACL / Loans 1.30% to 1.45% Unchanged Effective
 
Tax Rate 20-22% Unchanged (1) Excluding the impact of acquisition
 
-related costs. 15
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NON-GAAP RECONCILIATIONS CROSSFIRST BANKSAHRES
 
INC. Adjusted net income: Net income S 16,047 $ 16,108 Add: Acquisition
 
costs 338 1,477 Add: Acquisition - Day 1 CECL provision -
 
- Add: Employee separation 1,300 - Less: Tax effect111
 
(344) (310) Adjusted net income Preferred stock dividends Diluted
 
weighted average common shares outstanding Diluted earnings
 
per common share Adjusted diluted earnings per common share
 
s s Quarter Ended Six Months Ended (Dollars in thousands, except
 
per share data) $ 11,946 S 17,280 S 15,545 S 32,155 S 32,373
 
3,570 81 239 1,815 239 4,400 - - - - - - 1,063 1300 1,063 (2,045)
 
(17) (273) (654) (273) % $ $ $ $ Adjusted return on average
 
assets: Net income Adjusted net income Average assets Return on
 
average assets Adjusted return on average assets Quarter
 
Ended Six Months Ended (Dollars in thousands) S 16,047 $ 16,108
 
S 11,946 $ 17,280 S 15,545 S 32,155 S 32,373 17341 17275 17,871
 
17,344 16,574 34,616 33,402 $ 6,929,972 $ 6,712,801 S 6,159,783
 
S 5,764,347 S 5545,657 S 6,821,987 S 5,554,648 1.00 % 1.04 %
 
1.15 % 1.19 % 120 % 102 % 1.21 % Quarter Ended Six Months Ended
 
(Dollars in thousands) Adjusted return on average equity: Net income
 
$ 16,047 $ 16,108 $ 11,946 $ 17,280 $ 15,545 $ 32,155 S
 
32,373 Adjusted net income 17341 17275 17,871 17,344 16,574
 
34,616 33,402 Average equity $ 647,491 S 620,210 $ 589,587
 
$ 613206 S 614,541 S 633,926 S 634,036 Return on average
 
equity Adjusted return on average equity Represents the tax impact of the adjustments
 
at a tax rate of 21.0%, plus permanent tax expense associated with
 
merger related transactions. 16
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NON-GAAP RECONCILIATIONS CROSSFIRST BANKSAHRES
 
INC. 6/30/2023 Tangible common stockholders’ equity: Total
 
stockholders' equity $ 651,483 Less:goodwill and other intangible
 
assets 27,457 Less: preferred stock 7,750 Tangible common
 
stockholders’ equity Tangible book value per common
 
share: Tangible common stockholders' equity $ 616,276 Common
 
shares outstanding at end of period 48,653,487 Book value per
 
common share Tangible book value per common share
 
Quarter Ended 3/31/2023 12/31/2023 9/30/2022 6/30/202T {Dollars in
 
thousands, except per s h ere doto/ $ 645,491 28,259 7,750
 
$ 609,482 48,600,618 $ 608,599 29,081 $ 579,518 48,448215 $ 580,547
 
71 $ 580,476 48,787,696 $ 608,016 91 $ 607,925 49,535,949
 
Six Months Ended Quarter Ended 6/30/2 023 3/31/2023 12/31/202 3
 
9/30/20 22 6/30/2022 6/30/2023 6/30/2023 (Dollars in thousands) Adjusted
 
Efficiency Ratio - Fully Tax Equivalent (FTE)1'1 Non-interest
 
expense Less: Acquisition costs Less: Core deposit intangible
 
amortization Less: Employee separation
 
$ 37,412 $ (338) (802) (1.300) 38,092 $ (1.477) (822) 36,423
 
$ (3570) (291) 28,451 $ (81) 29203 (239) (1.065) $ 75504 $
 
(1.815) 0.624) (1.300) 56,869 (239) 0.063) Adjusted Non-interest
 
expense (numerator) $ 34,972 $ 35,793 $ 32562 $ 28,370 $ 27,901
 
s 70,765 $ 55,567 Net interest income 54,539 58,221 54,015 49,695 46,709
 
112,760 89,824 Tax equivalent interest income(l)
 
750 797 818 820 808 1547 1,583 Non-interest income (loss) 5,779
 
4,421 4559 3,780 4201 10,200 9,143 Total tax-equivalent income
 
(denominator)
 
$ S Efficiency Ratio Adjusted Efficiency Ratio - Fully Tax Equivalent
 
(FTE)1'1 (1) Tax exempt income (tax-free municipal securities)
 
is calculated on a tax equivalent basis. The incremental rate
 
used is 21.0%. 17