CrossFirst Bankshares, Inc. (Nasdaq: CFB), the bank holding company
for CrossFirst Bank, today reported operating results for the
second quarter of 2022, with second quarter net income of $15.5
million, or $0.31 per diluted share, and year-to-date net income of
$32.4 million, or $0.64 per diluted share.
"In addition to our announcement about our planned acquisition
of Central, we produced a very strong quarter of organic loan
growth. We also invested in talent to support our continued success
by filling key roles with both internal promotions and adding
high-caliber talent from the outside,” said CrossFirst’s CEO and
President, Mike Maddox. “We remain highly focused on credit
quality, and we are committed to managing through a challenging
economy while delivering for our clients and stockholders.”
2022 Second Quarter
Highlights: |
- Announced on June
13, 2022, an agreement under which CrossFirst Bank will acquire
Central Bancorp, Inc.’s bank subsidiary, Farmers & Stockmens
Bank (“Central”), in an all-cash transaction
- $5.7 billion of
assets with 6% operating revenue growth compared to the second
quarter of 2021
- $179 million or 4%
of total loan growth from the previous quarter and $290 million or
7% loan growth from the same quarter last year; excluding PPP
loans(2), loan growth was $195 million from the previous quarter or
5% and was $473 million or 12% from the same quarter last year
- Continued
improvement in credit quality during the second quarter of 2022 as
evidenced by the decrease in non-performing assets to total assets
ratio from 1.09% at June 30, 2021 to 0.54% at June 30, 2022
- Return on Average
Assets of 1.12% and a Return on Equity of 10.15% for the quarter
ended June 30, 2022
- Net Interest Margin
(Fully Tax-Equivalent)(1) of 3.52% for the quarter ended June 30,
2022, compared to 3.14% for the same quarter last year
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Quarter-to-Date |
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Year-to-Date |
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June 30, |
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June 30, |
|
(Dollars in millions except per share data) |
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Operating
revenue(3) |
$ |
50.9 |
|
$ |
48.2 |
|
|
$ |
99.0 |
|
$ |
93.4 |
|
Net
income |
$ |
15.5 |
|
$ |
15.6 |
|
|
$ |
32.4 |
|
$ |
27.6 |
|
Diluted earnings per
share |
$ |
0.31 |
|
$ |
0.30 |
|
|
$ |
0.64 |
|
$ |
0.53 |
|
Return on average assets |
|
1.12 |
% |
|
1.10 |
% |
|
|
1.18 |
% |
|
0.97 |
% |
Return on average common
equity |
|
10.15 |
% |
|
9.86 |
% |
|
|
10.30 |
% |
|
8.84 |
% |
Net interest margin(1) |
|
3.46 |
% |
|
3.08 |
% |
|
|
3.35 |
% |
|
3.02 |
% |
Net interest margin, fully
tax-equivalent(1)(4) |
|
3.52 |
% |
|
3.14 |
% |
|
|
3.41 |
% |
|
3.07 |
% |
Efficiency ratio |
|
57.36 |
% |
|
53.61 |
% |
|
|
57.46 |
% |
|
52.06 |
% |
Non-GAAP core operating
efficiency ratio, fully tax-equivalent(2)(4) |
|
55.08 |
% |
|
53.34 |
% |
|
|
55.83 |
% |
|
51.51 |
% |
(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) Represents a non-GAAP measure. See "Table 5.
Non-GAAP Financial Measures" for a reconciliation of these
measures.(3) Net interest income plus non-interest
income.(4) 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%.
Income from Operations
Net Interest Income
Interest income was $52.8 million for the second quarter of
2022, an increase of 9% from the second quarter of 2021 and an
increase of 11% from the previous quarter due to higher average
loans outstanding and higher interest rates. Average earning assets
totaled $5.4 billion for the second quarter of 2022, a decrease of
$92 million or 2% from the same quarter in 2021. This decline in
average earning assets was largely driven by a decrease of $210
million in average interest-bearing deposits in other banks, the
impact of which was outweighed by the increase of $29 million in
average loans and the associated loan yield increase.
Interest expense for the second quarter of 2022 was $6.1
million, slightly lower than the second quarter of 2021 and 32%
higher than the previous quarter. Average interest-bearing deposits
decreased to $3.4 billion in the second quarter of 2022, a 13%
decrease from the same prior year period. The cost of funds
increased from the previous quarter to 0.50%, compared to 0.39% for
the first quarter of 2022, driven by the higher interest rate
environment.
Net interest income totaled $46.7 million for the second quarter
of 2022, which was 8% higher than the first quarter of 2022, and
10% higher than the second quarter of 2021. Tax-equivalent net
interest margin increased to 3.52% in the current quarter from
3.29% in the previous quarter and 3.14% in the second quarter of
2021. 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 second quarter of 2022.
Non-Interest Income
Non-interest income decreased $1.6 million in the second quarter
of 2022 or 28% compared to the same quarter of 2021 and decreased
$0.7 million compared to the first quarter of 2022. The decrease in
non-interest income compared to the previous quarter was due to a
$1.1 million decrease in credit card fees and $0.1 million decrease
in swap fee income, partly offset by a $0.3 million increase in
letter of credit fees and $0.1 million increase in service charge
income. The decrease in non-interest income compared to the same
quarter of 2021, was primarily due to $1.8 million in income from
bank-owned life insurance proceeds received last year.
Non-Interest Expense
Non-interest expense for the second quarter of 2022 was $29.2
million, which increased 13% compared to the second quarter of 2021
and increased 6% from the first quarter of 2022. Salaries and
benefit costs were lower in the current quarter by $0.8 million
compared to the prior quarter. Furthermore, professional fees
increased $0.3 million and data processing expenses increased $0.3
million, partly offset by a slight decrease in software and
communication expenses. Compared to the same quarter in the prior
year, salaries and benefit costs were $1.4 million higher mainly
due to increased hiring for market expansion and increased
incentive expenses. Additionally, software and communication
expenses increased $0.2 million, and data processing expenses
increased $0.4 million, offset by a $0.7 million decrease in
foreclosed assets. The other non-interest expense increase for the
second quarter of 2022 was primarily due to increases in travel and
meeting expenses and employee separation expense of $1.1
million.
CrossFirst’s effective tax rate for the second quarter of 2022
was 21%, as compared to 17% for the second quarter of 2021 and 20%
in the first quarter of 2022. The 4% effective tax rate increase
compared to the same quarter in the prior year was primarily due to
the $1.8 million in income from bank-owned life insurance proceeds
received last year, which was not subject to tax. For both
comparable periods, the Company continued 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.
Balance Sheet Performance & Analysis
During the second quarter of 2022, total assets increased by
$190 million or 3% compared to March 31, 2022, and increased $397
million or 7% compared to June 30, 2021. Total assets increased on
a linked quarter basis primarily due to a $179 million increase in
loans. The year-over-year increase was due to increases in loans of
$310 million and cash and cash equivalents of $57 million.
Non-interest-bearing deposits increased $53 million compared to
March 31, 2022, and increased $345 million from June 30, 2021.
During the second quarter of 2022, available-for-sale investment
securities decreased $27 million to $696 million compared to
March 31, 2022 primarily due to unrealized losses from
interest rate increases. The securities yields increased 7 basis
points to a tax equivalent yield of 3.07% for the second quarter of
2022 compared to the prior quarter.
Loan Results
During the second quarter of 2022, the Company produced an
increase in average loans of $105 million compared to the first
quarter of 2022, and an increase of $29 million or 1% compared to
the second quarter of 2021. The linked quarter increase in average
loans was primarily a result of growth in the commercial and
commercial real estate portfolios. Net of PPP loans, average loans
grew 3% compared to the quarter ended March 31, 2022. Loan yields
increased 28 basis points to 4.28% during the second quarter of
2022 and increased 29 basis points compared to the same prior year
quarter.
|
|
2Q22 |
|
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|
1Q22 |
|
|
|
|
4Q21 |
|
|
|
|
3Q21 |
|
|
|
|
2Q21 |
|
|
QoQGrowth($) |
|
QoQGrowth(%)(1) |
|
YoYGrowth($) |
|
YoYGrowth(%)(1) |
|
(Dollars in millions) |
|
Average loans
(gross) |
|
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|
|
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|
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|
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|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
1,532 |
|
|
|
$ |
1,434 |
|
|
|
$ |
1,328 |
|
|
|
$ |
1,233 |
|
|
|
$ |
1,221 |
|
|
$ |
98 |
|
|
7 |
% |
|
$ |
311 |
|
25 |
% |
|
Energy |
|
241 |
|
|
|
|
274 |
|
|
|
|
290 |
|
|
|
|
311 |
|
|
|
|
341 |
|
|
|
(33) |
|
|
(12) |
|
|
|
(100) |
|
(29) |
|
|
Commercial real estate |
|
1,399 |
|
|
|
|
1,327 |
|
|
|
|
1,272 |
|
|
|
|
1,213 |
|
|
|
|
1,203 |
|
|
|
72 |
|
|
5 |
|
|
|
196 |
|
16 |
|
|
Construction and land development |
|
581 |
|
|
|
|
593 |
|
|
|
|
579 |
|
|
|
|
611 |
|
|
|
|
633 |
|
|
|
(12) |
|
|
(2) |
|
|
|
(52) |
|
(8) |
|
|
Residential and multifamily real estate |
|
609 |
|
|
|
|
604 |
|
|
|
|
612 |
|
|
|
|
659 |
|
|
|
|
659 |
|
|
|
5 |
|
|
1 |
|
|
|
(50) |
|
(8) |
|
|
Paycheck Protection Program |
|
20 |
|
|
|
|
42 |
|
|
|
|
84 |
|
|
|
|
147 |
|
|
|
|
296 |
|
|
|
(22) |
|
|
(52) |
|
|
|
(276) |
|
(93) |
|
|
Consumer |
|
56 |
|
|
|
|
59 |
|
|
|
|
56 |
|
|
|
|
57 |
|
|
|
|
56 |
|
|
|
(3) |
|
|
(5) |
|
|
|
- |
|
0 |
|
|
Total |
$ |
4,438 |
|
|
|
$ |
4,333 |
|
|
|
$ |
4,221 |
|
|
|
$ |
4,231 |
|
|
|
$ |
4,409 |
|
|
$ |
105 |
|
|
2 |
% |
|
$ |
29 |
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on average loans for the
period ending |
|
4.28 |
% |
|
|
|
4.00 |
% |
|
|
|
4.17 |
% |
|
|
|
4.00 |
% |
|
|
|
3.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 second quarter of 2022, the Company experienced a
decrease in average deposits of 2% compared to the previous
quarter, and a 4% decline in average deposits compared to the
second quarter of 2021. The deposit reduction for the quarter was
driven by decreases in transaction deposits and time deposits. As a
result of the increasing interest rate environment, the Company had
an increase of 11 basis points in the overall cost of deposits
during the second quarter of 2022, and the cost of interest-bearing
deposits has increased 6 basis points over the last twelve
months.
|
|
2Q22 |
|
|
|
1Q22 |
|
|
|
4Q21 |
|
|
|
3Q21 |
|
|
|
2Q21 |
|
|
QoQGrowth($) |
|
QoQGrowth(%)(1) |
|
YoYGrowth($) |
|
YoYGrowth(%)(1) |
|
(Dollars in millions) |
Average
deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing deposits |
$ |
1,150 |
|
|
$ |
1,157 |
|
|
$ |
1,058 |
|
|
$ |
910 |
|
|
$ |
802 |
|
|
$ |
(7) |
|
|
(1) |
% |
|
$ |
348 |
|
|
43 |
% |
Transaction deposits |
|
507 |
|
|
|
586 |
|
|
|
543 |
|
|
|
511 |
|
|
|
665 |
|
|
|
(79) |
|
|
(13) |
|
|
|
(158) |
|
|
(23) |
|
Savings and money market deposits |
|
2,334 |
|
|
|
2,303 |
|
|
|
2,272 |
|
|
|
2,276 |
|
|
|
2,385 |
|
|
|
31 |
|
|
1 |
|
|
|
(51) |
|
|
(2) |
|
Time deposits |
|
560 |
|
|
|
587 |
|
|
|
662 |
|
|
|
752 |
|
|
|
869 |
|
|
|
(27) |
|
|
(5) |
|
|
|
(309) |
|
|
(36) |
|
Total |
$ |
4,551 |
|
|
$ |
4,633 |
|
|
$ |
4,535 |
|
|
$ |
4,449 |
|
|
$ |
4,721 |
|
|
$ |
(82) |
|
|
(2) |
% |
|
$ |
(170) |
|
|
(4) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of deposits for the
period ending |
|
0.42 |
% |
|
|
0.31 |
% |
|
|
0.33 |
% |
|
|
0.38 |
% |
|
|
0.41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of interest-bearing
deposits for the period ending |
|
0.56 |
% |
|
|
0.41 |
% |
|
|
0.43 |
% |
|
|
0.47 |
% |
|
|
0.50 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(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 June 30, 2022, other borrowings totaled $298 million, as
compared to $228 million at March 31, 2022, and $284 million at
June 30, 2021.
Asset Quality Position
Non-performing assets decreased to $30.8 million due to a $5.4
million decrease in non-accrual loans. The decline is attributable
to decreases in non-accrual commercial and industrial and energy
loans. The non-performing assets to total assets ratio decreased
from 1.09% at June 30, 2021 to 0.54% at June 30, 2022. Classified
loans increased slightly during the second quarter due to some
grade changes in the commercial and industrial portfolio, but
remained in an acceptable range at 12.1% of total capital plus the
allowance for credit losses.
The allowance for credit losses was $56 million or 1.23% of
outstanding loans and 202% of non-accruing loans at June 30, 2022.
The combined allowance for credit losses and accrual for
off-balance sheet credit risk from unfunded commitments (“RUC”) was
$61 million or 1.35% of outstanding loans and 221% of non-accruing
loans at June 30, 2022.
The allowance for credit losses to total loans decreased to
1.23% at June 30, 2022 from 1.27% at March 31, 2022. The
improvements in credit metrics compared to June 30, 2021 were
primarily driven by upgrades in COVID-19 impacted segments and the
Energy portfolio. Net charge-offs were $1.1 million for the
second quarter of 2022 and were consistent with 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 (Dollars in millions) |
|
2Q22 |
|
|
|
1Q22 |
|
|
|
4Q21 |
|
|
|
3Q21 |
|
|
|
2Q21 |
|
Non-accrual loans |
$ |
27.7 |
|
|
$ |
33.1 |
|
|
$ |
31.4 |
|
|
$ |
48.1 |
|
|
$ |
54.7 |
|
Other real estate owned |
|
1.0 |
|
|
|
1.0 |
|
|
|
1.1 |
|
|
|
1.1 |
|
|
|
1.7 |
|
Non-performing assets |
|
30.8 |
|
|
|
35.6 |
|
|
|
32.7 |
|
|
|
49.8 |
|
|
|
58.1 |
|
Loans 90+ days past due and
still accruing |
|
2.2 |
|
|
|
1.5 |
|
|
|
0.1 |
|
|
|
0.5 |
|
|
|
1.8 |
|
Loans 30 - 89 days past
due |
|
16.6 |
|
|
|
15.9 |
|
|
|
3.5 |
|
|
|
37.6 |
|
|
|
18.8 |
|
Net charge-offs
(recoveries) |
|
1.1 |
|
|
|
1.1 |
|
|
|
0.8 |
|
|
|
1.3 |
|
|
|
2.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality
metrics (%) |
|
2Q22 |
|
|
|
1Q22 |
|
|
|
4Q21 |
|
|
|
3Q21 |
|
|
|
2Q21 |
|
Non-performing assets to total
assets |
|
0.54 |
% |
|
|
0.64 |
% |
|
|
0.58 |
% |
|
|
0.92 |
% |
|
|
1.09 |
% |
Allowance for credit loss to
total loans |
|
1.23 |
|
|
|
1.27 |
|
|
|
1.37 |
|
|
|
1.51 |
|
|
|
1.78 |
|
Allowance for credit loss +
RUC to total loans(1) |
|
1.35 |
|
|
|
1.38 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Allowance for credit loss to
non-performing loans |
|
187 |
|
|
|
160 |
|
|
|
185 |
|
|
|
132 |
|
|
|
134 |
|
Net charge-offs (recoveries)
to average loans(2) |
|
0.10 |
|
|
|
0.10 |
|
|
|
0.07 |
|
|
|
0.13 |
|
|
|
0.23 |
|
Provision to average
loans(2) |
|
0.19 |
|
|
|
(0.06) |
|
|
|
(0.47) |
|
|
|
(0.94) |
|
|
|
0.32 |
|
Classified Loans / (Total
Capital + ACL) |
|
12.1 |
|
|
|
10.8 |
|
|
|
10.8 |
|
|
|
17.3 |
|
|
|
24.0 |
|
Classified Loans / (Total
Capital + ACL + RUC)(1) |
|
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 June 30, 2022, stockholders' equity totaled $608
million, or $12.27 per share, compared to $668 million, or $13.23
per share, at December 31, 2021. During the second quarter of
2022, CrossFirst continued its share repurchase program by
purchasing 237,993 shares of common stock outstanding. In addition,
accumulated other comprehensive income (loss) declined by $71
million between December 31, 2021 and June 30, 2022; driven by a
$74 million decrease in the unrealized gain (loss) on
available-for-sale securities, net of tax.
The ratio of common equity Tier 1 capital to risk-weighted
assets was approximately 12% and the total capital to risk-weighted
assets was approximately 13% at June 30, 2022. The Company
remains well-capitalized.
Conference Call and Webcast
CrossFirst will host a conference call to review second quarter
2022 financial results on Tuesday, July 19, 2022, at 10 a.m. CT /
11 a.m. ET. The conference call and webcast may also include
discussion of Company developments, forward-looking statements and
other material information about business and financial matters. To
access the event by telephone, please dial (877) 270-2148 at least
fifteen minutes prior to the start of the call and request access
to the CrossFirst Bankshares, Inc. call. International callers
should dial +1 (412) 902-6510 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/px7sxoby. 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 4987463. 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, the acquisition of Central, 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
“anticipate,” “believes,” “can,” “could,” “may,” “predicts,”
“potential,” “should,” “will,” “estimate,” “planned,” “projects,”
“continuing,” “ongoing,” “expects,” “intends” 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.
TABLE 1. CONSOLIDATED BALANCE
SHEETS
|
June 30, 2022 |
|
December 31, 2021(2) |
|
(Unaudited) |
|
|
|
(Dollars in thousands) |
Assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
277,678 |
|
|
$ |
482,727 |
|
Available-for-sale securities - taxable |
|
186,154 |
|
|
|
192,146 |
|
Available-for-sale securities - tax-exempt |
|
509,493 |
|
|
|
553,823 |
|
Loans, net of unearned fees |
|
4,528,234 |
|
|
|
4,256,213 |
|
Allowance for credit losses on loans(1) |
|
55,817 |
|
|
|
58,375 |
|
Net loans |
|
4,472,417 |
|
|
|
4,197,838 |
|
Premises and equipment, net |
|
64,769 |
|
|
|
66,069 |
|
Restricted equity securities |
|
14,946 |
|
|
|
11,927 |
|
Interest receivable |
|
17,909 |
|
|
|
16,023 |
|
Foreclosed assets held for sale |
|
973 |
|
|
|
1,148 |
|
Bank-owned life insurance |
|
68,293 |
|
|
|
67,498 |
|
Other |
|
95,679 |
|
|
|
32,258 |
|
Total assets |
$ |
5,708,311 |
|
|
$ |
5,621,457 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
Deposits |
|
|
|
|
|
Non-interest-bearing |
$ |
1,163,462 |
|
|
$ |
1,163,224 |
|
Savings, NOW and money market |
|
2,847,887 |
|
|
|
2,895,986 |
|
Time |
|
733,071 |
|
|
|
624,387 |
|
Total deposits |
|
4,744,420 |
|
|
|
4,683,597 |
|
Federal Home Loan Bank advances |
|
296,600 |
|
|
|
236,600 |
|
Other borrowings |
|
1,041 |
|
|
|
1,009 |
|
Interest payable and other liabilities |
|
58,234 |
|
|
|
32,678 |
|
Total liabilities |
|
5,100,295 |
|
|
|
4,953,884 |
|
Stockholders’
equity |
|
|
|
|
|
Common stock, $0.01 par value: |
|
|
|
|
|
authorized - 200,000,000 shares, issued - 52,972,244 and 52,590,015
shares at June 30, 2022 and December 31, 2021, respectively |
|
529 |
|
|
|
526 |
|
Treasury stock, at cost: |
|
|
|
|
|
3,436,295 and 2,139,970 shares held at June 30, 2022 and December
31, 2021, respectively |
|
(48,501 |
) |
|
|
(28,347 |
) |
Additional paid-in capital |
|
528,548 |
|
|
|
526,806 |
|
Retained earnings |
|
176,869 |
|
|
|
147,099 |
|
Accumulated other comprehensive income (loss) |
|
(49,429 |
) |
|
|
21,489 |
|
Total stockholders’ equity |
|
608,016 |
|
|
|
667,573 |
|
Total liabilities and stockholders’ equity |
$ |
5,708,311 |
|
|
$ |
5,621,457 |
|
(1) As of December 31, 2021, this line represents the
allowance for loan and lease losses.(2) 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.
TABLE 2.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
(Dollars in thousands except per share data) |
Interest
Income |
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
47,327 |
|
|
$ |
43,846 |
|
|
$ |
90,055 |
|
|
$ |
87,604 |
|
Available-for-sale securities - taxable |
|
1,086 |
|
|
|
869 |
|
|
|
2,130 |
|
|
|
1,620 |
|
Available-for-sale securities - tax-exempt |
|
3,845 |
|
|
|
3,497 |
|
|
|
7,537 |
|
|
|
6,848 |
|
Deposits with financial institutions |
|
369 |
|
|
|
110 |
|
|
|
521 |
|
|
|
238 |
|
Dividends on bank stocks |
|
213 |
|
|
|
162 |
|
|
|
357 |
|
|
|
327 |
|
Total interest income |
|
52,840 |
|
|
|
48,484 |
|
|
|
100,600 |
|
|
|
96,637 |
|
Interest
Expense |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
4,732 |
|
|
|
4,850 |
|
|
|
8,243 |
|
|
|
10,578 |
|
Fed funds purchased and repurchase agreements |
|
74 |
|
|
|
2 |
|
|
|
74 |
|
|
|
3 |
|
Federal Home Loan Bank Advances |
|
1,294 |
|
|
|
1,280 |
|
|
|
2,403 |
|
|
|
2,563 |
|
Other borrowings |
|
31 |
|
|
|
24 |
|
|
|
56 |
|
|
|
48 |
|
Total interest expense |
|
6,131 |
|
|
|
6,156 |
|
|
|
10,776 |
|
|
|
13,192 |
|
Net Interest
Income |
|
46,709 |
|
|
|
42,328 |
|
|
|
89,824 |
|
|
|
83,445 |
|
Provision for Credit
Losses(1) |
|
2,135 |
|
|
|
3,500 |
|
|
|
1,510 |
|
|
|
11,000 |
|
Net Interest Income
after Provision for Credit Losses(1) |
|
44,574 |
|
|
|
38,828 |
|
|
|
88,314 |
|
|
|
72,445 |
|
Non-Interest
Income |
|
|
|
|
|
|
|
|
|
|
|
Service charges and fees on customer accounts |
|
1,546 |
|
|
|
1,177 |
|
|
|
2,954 |
|
|
|
2,134 |
|
Realized losses on available-for-sale securities |
|
(12 |
) |
|
|
(13 |
) |
|
|
(38 |
) |
|
|
(3 |
) |
Unrealized losses on equity securities, net |
|
(71 |
) |
|
|
6 |
|
|
|
(174 |
) |
|
|
(33 |
) |
Income from bank-owned life insurance |
|
407 |
|
|
|
2,245 |
|
|
|
795 |
|
|
|
2,661 |
|
Swap fees and credit valuation adjustments, net |
|
12 |
|
|
|
(30 |
) |
|
|
130 |
|
|
|
125 |
|
ATM and credit card interchange income |
|
1,521 |
|
|
|
1,506 |
|
|
|
4,185 |
|
|
|
3,834 |
|
Other non-interest income |
|
798 |
|
|
|
934 |
|
|
|
1,291 |
|
|
|
1,251 |
|
Total non-interest income |
|
4,201 |
|
|
|
5,825 |
|
|
|
9,143 |
|
|
|
9,969 |
|
Non-Interest
Expense |
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
17,095 |
|
|
|
15,660 |
|
|
|
35,036 |
|
|
|
29,213 |
|
Occupancy |
|
2,622 |
|
|
|
2,397 |
|
|
|
5,115 |
|
|
|
4,891 |
|
Professional fees |
|
1,068 |
|
|
|
1,138 |
|
|
|
1,873 |
|
|
|
1,920 |
|
Deposit insurance premiums |
|
713 |
|
|
|
917 |
|
|
|
1,450 |
|
|
|
2,068 |
|
Data processing |
|
1,160 |
|
|
|
720 |
|
|
|
1,972 |
|
|
|
1,436 |
|
Advertising |
|
757 |
|
|
|
435 |
|
|
|
1,449 |
|
|
|
738 |
|
Software and communication |
|
1,198 |
|
|
|
1,034 |
|
|
|
2,468 |
|
|
|
2,099 |
|
Foreclosed assets, net |
|
15 |
|
|
|
665 |
|
|
|
(38 |
) |
|
|
715 |
|
Other non-interest expense |
|
4,575 |
|
|
|
2,847 |
|
|
|
7,544 |
|
|
|
5,551 |
|
Total non-interest expense |
|
29,203 |
|
|
|
25,813 |
|
|
|
56,869 |
|
|
|
48,631 |
|
Net Income Before
Taxes |
|
19,572 |
|
|
|
18,840 |
|
|
|
40,588 |
|
|
|
33,783 |
|
Income tax expense |
|
4,027 |
|
|
|
3,263 |
|
|
|
8,215 |
|
|
|
6,171 |
|
Net
Income |
$ |
15,545 |
|
|
$ |
15,577 |
|
|
$ |
32,373 |
|
|
$ |
27,612 |
|
Basic Earnings Per
Share |
$ |
0.31 |
|
|
$ |
0.30 |
|
|
$ |
0.65 |
|
|
$ |
0.54 |
|
Diluted Earnings Per
Share |
$ |
0.31 |
|
|
$ |
0.30 |
|
|
$ |
0.64 |
|
|
$ |
0.53 |
|
(1) For the three and six-months ended June 30, 2021,
this line represents the provision for loan and lease losses.
TABLE 3. YEAR-TO-DATE ANALYSIS OF CHANGES
IN NET INTEREST
INCOME(UNAUDITED)
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
AverageBalance |
|
InterestIncome / Expense |
|
AverageYield /Rate(4) |
|
AverageBalance |
|
InterestIncome /Expense |
|
AverageYield /Rate(4) |
|
|
(Dollars in thousands) |
|
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities - taxable(1) |
$ |
220,783 |
|
|
$ |
2,487 |
|
2.26 |
% |
|
$ |
209,730 |
|
|
$ |
1,947 |
|
1.86 |
% |
Securities - tax-exempt(1)(2) |
|
543,873 |
|
|
|
9,120 |
|
3.35 |
|
|
|
464,208 |
|
|
|
8,286 |
|
3.57 |
|
Federal funds sold |
|
- |
|
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
- |
|
Interest-bearing deposits in other banks |
|
253,771 |
|
|
|
521 |
|
0.41 |
|
|
|
429,930 |
|
|
|
238 |
|
0.11 |
|
Gross loans, net of unearned income(3) |
|
4,385,664 |
|
|
|
90,055 |
|
4.14 |
|
|
|
4,457,792 |
|
|
|
87,604 |
|
3.96 |
|
Total interest-earning assets(1)(2) |
|
5,404,091 |
|
|
$ |
102,183 |
|
3.81 |
% |
|
|
5,561,660 |
|
|
$ |
98,075 |
|
3.55 |
% |
Allowance for credit losses |
|
(57,324 |
) |
|
|
|
|
|
|
|
|
(77,552 |
) |
|
|
|
|
|
|
Other non-interest-earning assets |
|
207,881 |
|
|
|
|
|
|
|
|
|
251,450 |
|
|
|
|
|
|
|
Total assets |
$ |
5,554,648 |
|
|
|
|
|
|
|
|
$ |
5,735,558 |
|
|
|
|
|
|
|
Interest-bearing
liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction deposits |
$ |
546,982 |
|
|
$ |
596 |
|
0.22 |
% |
|
$ |
690,514 |
|
|
$ |
677 |
|
0.20 |
% |
Savings and money market deposits |
|
2,318,415 |
|
|
|
4,716 |
|
0.41 |
|
|
|
2,403,318 |
|
|
|
4,495 |
|
0.38 |
|
Time deposits |
|
573,503 |
|
|
|
2,931 |
|
1.03 |
|
|
|
920,307 |
|
|
|
5,406 |
|
1.18 |
|
Total interest-bearing deposits |
|
3,438,900 |
|
|
|
8,243 |
|
0.48 |
|
|
|
4,014,139 |
|
|
|
10,578 |
|
0.53 |
|
FHLB and short-term borrowings |
|
280,883 |
|
|
|
2,477 |
|
1.78 |
|
|
|
289,039 |
|
|
|
2,566 |
|
1.79 |
|
Trust preferred securities, net of fair value adjustments |
|
1,018 |
|
|
|
56 |
|
11.11 |
|
|
|
971 |
|
|
|
48 |
|
9.89 |
|
Non-interest-bearing deposits |
|
1,153,499 |
|
|
|
- |
|
- |
|
|
|
766,725 |
|
|
|
- |
|
- |
|
Cost of funds |
|
4,874,300 |
|
|
$ |
10,776 |
|
0.44 |
% |
|
|
5,070,874 |
|
|
$ |
13,192 |
|
0.52 |
% |
Other liabilities |
|
46,312 |
|
|
|
|
|
|
|
|
|
35,017 |
|
|
|
|
|
|
|
Stockholders’ equity |
|
634,036 |
|
|
|
|
|
|
|
|
|
629,667 |
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity |
$ |
5,554,648 |
|
|
|
|
|
|
|
|
$ |
5,735,558 |
|
|
|
|
|
|
|
Net interest income(2) |
|
|
|
$ |
91,407 |
|
|
|
|
|
|
|
$ |
84,883 |
|
|
|
Net interest spread(1)(2) |
|
|
|
|
|
|
3.37 |
% |
|
|
|
|
|
|
|
3.03 |
% |
Net interest margin(1)(2) |
|
|
|
|
|
|
3.41 |
% |
|
|
|
|
|
|
|
3.07 |
% |
(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
income tax 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.
YEAR-TO-DATE VOLUME & RATE VARIANCE
TO NET INTEREST INCOME (UNAUDITED)
|
Six Months Ended |
|
June 30, 2022 over 2021 |
|
Average Volume |
|
Yield/Rate |
|
Net Change(2) |
|
(Dollars in thousands) |
Interest
Income |
|
|
|
|
|
|
|
|
Securities - taxable |
$ |
107 |
|
|
$ |
433 |
|
|
$ |
540 |
|
Securities - tax-exempt(1) |
|
987 |
|
|
|
(153 |
) |
|
|
834 |
|
Federal funds sold |
|
- |
|
|
|
- |
|
|
|
- |
|
Interest-bearing deposits in other banks |
|
(132 |
) |
|
|
415 |
|
|
|
283 |
|
Gross loans, net of unearned income |
|
(1,434 |
) |
|
|
3,885 |
|
|
|
2,451 |
|
Total interest income(1) |
|
(472 |
) |
|
|
4,580 |
|
|
|
4,108 |
|
Interest
Expense |
|
|
|
|
|
|
|
|
Transaction deposits |
|
(151 |
) |
|
|
70 |
|
|
|
(81 |
) |
Savings and money market deposits |
|
(163 |
) |
|
|
384 |
|
|
|
221 |
|
Time deposits |
|
(1,840 |
) |
|
|
(635 |
) |
|
|
(2,475 |
) |
Total interest-bearing deposits |
|
(2,154 |
) |
|
|
(181 |
) |
|
|
(2,335 |
) |
FHLB and short-term borrowings |
|
(71 |
) |
|
|
(18 |
) |
|
|
(89 |
) |
Trust preferred securities, net of fair value adjustments |
|
2 |
|
|
|
6 |
|
|
|
8 |
|
Total interest expense |
|
(2,223 |
) |
|
|
(193 |
) |
|
|
(2,416 |
) |
Net interest income(1) |
$ |
1,751 |
|
|
$ |
4,773 |
|
|
$ |
6,524 |
|
(1) Tax exempt income is calculated on a tax-equivalent basis.
Tax-free municipal securities are exempt from federal income taxes.
The incremental income tax rate used is 21.0%. (2) The
change in interest not due solely to volume or rate has been
allocated in proportion to the respective absolute dollar amounts
of the change in volume or rate.
TABLE 4. 2021 - 2022 QUARTERLY ANALYSIS
OF CHANGES IN NET INTEREST INCOME (UNAUDITED)
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
AverageBalance |
|
InterestIncome /Expense |
|
AverageYield /Rate(4) |
|
AverageBalance |
|
InterestIncome /Expense |
|
AverageYield /Rate(4) |
|
|
(Dollars in thousands) |
|
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities - taxable(1) |
$ |
220,763 |
|
|
$ |
1,299 |
|
2.35 |
% |
|
$ |
207,835 |
|
|
$ |
1,031 |
|
1.99 |
% |
Securities - tax-exempt(1)(2) |
|
553,960 |
|
|
|
4,653 |
|
3.36 |
|
|
|
478,334 |
|
|
|
4,231 |
|
3.54 |
|
Federal funds sold |
|
- |
|
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
- |
|
Interest-bearing deposits in other banks |
|
198,210 |
|
|
|
369 |
|
0.75 |
|
|
|
407,801 |
|
|
|
110 |
|
0.11 |
|
Gross loans, net of unearned income(3) |
|
4,437,917 |
|
|
|
47,327 |
|
4.28 |
|
|
|
4,409,280 |
|
|
|
43,846 |
|
3.99 |
|
Total interest-earning assets(1)(2) |
|
5,410,850 |
|
|
$ |
53,648 |
|
3.98 |
% |
|
|
5,503,250 |
|
|
$ |
49,218 |
|
3.59 |
% |
Allowance for credit losses |
|
(56,732 |
) |
|
|
|
|
|
|
|
|
(76,741 |
) |
|
|
|
|
|
|
Other non-interest-earning assets |
|
191,539 |
|
|
|
|
|
|
|
|
|
247,129 |
|
|
|
|
|
|
|
Total assets |
$ |
5,545,657 |
|
|
|
|
|
|
|
|
$ |
5,673,638 |
|
|
|
|
|
|
|
Interest-bearing
liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction deposits |
$ |
508,403 |
|
|
$ |
374 |
|
0.29 |
% |
|
$ |
664,552 |
|
|
$ |
313 |
|
0.19 |
% |
Savings and money market deposits |
|
2,334,103 |
|
|
|
2,869 |
|
0.49 |
|
|
|
2,385,074 |
|
|
|
2,107 |
|
0.35 |
|
Time deposits |
|
559,708 |
|
|
|
1,489 |
|
1.07 |
|
|
|
869,176 |
|
|
|
2,430 |
|
1.12 |
|
Total interest-bearing deposits |
|
3,402,214 |
|
|
|
4,732 |
|
0.56 |
|
|
|
3,918,802 |
|
|
|
4,850 |
|
0.50 |
|
FHLB and short-term borrowings |
|
330,064 |
|
|
|
1,368 |
|
1.66 |
|
|
|
287,904 |
|
|
|
1,282 |
|
1.79 |
|
Trust preferred securities, net of fair value adjustments |
|
1,024 |
|
|
|
29 |
|
11.94 |
|
|
|
976 |
|
|
|
24 |
|
9.82 |
|
Non-interest-bearing deposits |
|
1,149,654 |
|
|
|
- |
|
- |
|
|
|
801,591 |
|
|
|
- |
|
- |
|
Cost of funds |
|
4,882,956 |
|
|
$ |
6,129 |
|
0.50 |
% |
|
|
5,009,273 |
|
|
$ |
6,156 |
|
0.49 |
% |
Other liabilities |
|
48,160 |
|
|
|
|
|
|
|
|
|
30,948 |
|
|
|
|
|
|
|
Stockholders’ equity |
|
614,541 |
|
|
|
|
|
|
|
|
|
633,417 |
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity |
$ |
5,545,657 |
|
|
|
|
|
|
|
|
$ |
5,673,638 |
|
|
|
|
|
|
|
Net interest income(2) |
|
|
|
$ |
47,519 |
|
|
|
|
|
|
|
$ |
43,062 |
|
|
|
Net interest spread(1)(2) |
|
|
|
|
|
|
3.48 |
% |
|
|
|
|
|
|
|
3.10 |
% |
Net interest margin(1)(2) |
|
|
|
|
|
|
3.52 |
% |
|
|
|
|
|
|
|
3.14 |
% |
(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
income tax 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.
QUARTER-TO-DATE VOLUME & RATE
VARIANCE TO NET INTEREST INCOME (UNAUDITED)
|
Three Months Ended |
|
June 30, 2022 over 2021 |
|
Average Volume |
|
Yield/Rate |
|
Net Change(2) |
|
(Dollars in thousands) |
Interest
Income |
|
|
|
|
|
|
|
|
Securities - taxable |
$ |
67 |
|
|
$ |
201 |
|
|
$ |
268 |
|
Securities - tax-exempt(1) |
|
643 |
|
|
|
(221 |
) |
|
|
422 |
|
Federal funds sold |
|
- |
|
|
|
- |
|
|
|
- |
|
Interest-bearing deposits in other banks |
|
(84 |
) |
|
|
343 |
|
|
|
259 |
|
Gross loans, net of unearned income |
|
287 |
|
|
|
3,194 |
|
|
|
3,481 |
|
Total interest income(1) |
|
913 |
|
|
|
3,517 |
|
|
|
4,430 |
|
Interest
Expense |
|
|
|
|
|
|
|
|
Transaction deposits |
|
(86 |
) |
|
|
147 |
|
|
|
61 |
|
Savings and money market deposits |
|
(46 |
) |
|
|
808 |
|
|
|
762 |
|
Time deposits |
|
(827 |
) |
|
|
(114 |
) |
|
|
(941 |
) |
Total interest-bearing deposits |
|
(959 |
) |
|
|
841 |
|
|
|
(118 |
) |
FHLB and short-term borrowings |
|
179 |
|
|
|
(93 |
) |
|
|
86 |
|
Trust preferred securities, net of fair value adjustments |
|
1 |
|
|
|
4 |
|
|
|
5 |
|
Total interest expense |
|
(779 |
) |
|
|
752 |
|
|
|
(27 |
) |
Net interest income(1) |
$ |
1,692 |
|
|
$ |
2,765 |
|
|
$ |
4,457 |
|
(1) Tax exempt income is calculated on a tax-equivalent basis.
Tax-free municipal securities are exempt from federal income taxes.
The incremental income tax rate used is 21.0%.(2) The change in
interest not due solely to volume or rate has been allocated in
proportion to the respective absolute dollar amounts of the change
in volume or rate.
TABLE 5. NON-GAAP FINANCIAL
MEASURES
Non-GAAP Financial MeasuresIn 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 in the second 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 return on
average tangible common equity" as non-GAAP core operating income
(as defined above) divided by average tangible common equity.
Average tangible common equity is calculated as average common
equity less average goodwill and intangibles and average preferred
equity. The most directly comparable GAAP measure is return on
average common equity. Management believes that non-GAAP core
return on average tangible common equity 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.
- We calculate "non-GAAP pre-tax
pre-provision profit" as net income before taxes plus the provision
for credit losses. Management believes that non-GAAP pre-tax
pre-provision profit is important to many investors because the
calculation removes the tax impact on the financials and gives
investors insight into the operating income of the company.
|
Quarter Ended |
|
|
|
Six Months Ended |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|
12/31/2021 |
|
|
9/30/2021 |
|
|
6/30/2021 |
|
|
6/30/2022 |
|
|
6/30/2021 |
|
|
|
(Dollars in thousands) |
|
Non-GAAP core operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
15,545 |
|
|
$ |
16,828 |
|
|
$ |
20,801 |
|
|
$ |
21,000 |
|
|
$ |
15,577 |
|
|
$ |
32,373 |
|
|
$ |
27,612 |
|
Add: Acquisition costs |
|
239 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
239 |
|
|
|
- |
|
Less: Tax effect(1) |
|
50 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
50 |
|
|
|
- |
|
Acquisition costs, net of tax |
|
189 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
189 |
|
|
|
- |
|
Add: Employee separation |
|
1,063 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,063 |
|
|
|
- |
|
Less: Tax effect(1) |
|
223 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
223 |
|
|
|
- |
|
Employee separation, net of tax |
|
840 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
840 |
|
|
|
- |
|
Add: Unrealized loss on equity security |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Less: Tax effect(1) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,302 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Unrealized loss on equity security, net of tax |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,898 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Add: Accelerated employee benefits |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
719 |
|
|
|
- |
|
|
|
719 |
|
Less: Tax effect(2) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
210 |
|
|
|
- |
|
|
|
210 |
|
Accelerated employee benefits, net of tax |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
509 |
|
|
|
- |
|
|
|
509 |
|
Less: BOLI settlement benefits(3) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,841 |
|
|
|
- |
|
|
|
1,841 |
|
Non-GAAP core
operating income |
$ |
16,574 |
|
|
$ |
16,828 |
|
|
$ |
20,801 |
|
|
$ |
25,898 |
|
|
$ |
14,245 |
|
|
$ |
33,402 |
|
|
$ |
26,280 |
|
(1) Represents
the tax impact of the adjustments at a tax rate of 21.0%. |
|
(2) 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. |
|
(3) No tax
effect. |
|
|
|
Quarter Ended |
|
|
|
Six Months Ended |
|
|
|
6/30/2022 |
|
|
|
3/31/2022 |
|
|
|
12/31/2021 |
|
|
|
9/30/2021 |
|
|
|
6/30/2021 |
|
|
|
6/30/2022 |
|
|
|
6/30/2021 |
|
|
|
(Dollars in thousands) |
|
Non-GAAP
core return on average tangible common equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders |
$ |
15,545 |
|
|
$ |
16,828 |
|
|
$ |
20,801 |
|
|
$ |
21,000 |
|
|
$ |
15,577 |
|
|
$ |
32,373 |
|
|
$ |
27,612 |
|
Non-GAAP core operating income |
|
16,574 |
|
|
|
16,828 |
|
|
|
20,801 |
|
|
|
25,898 |
|
|
|
14,245 |
|
|
|
33,402 |
|
|
|
26,280 |
|
Average common equity |
|
614,541 |
|
|
|
653,747 |
|
|
|
656,415 |
|
|
|
644,715 |
|
|
|
633,417 |
|
|
|
634,036 |
|
|
|
629,667 |
|
Less: average goodwill and intangibles |
|
101 |
|
|
|
121 |
|
|
|
140 |
|
|
|
160 |
|
|
|
179 |
|
|
|
111 |
|
|
|
189 |
|
Average tangible common equity |
$ |
614,440 |
|
|
$ |
653,626 |
|
|
$ |
656,275 |
|
|
$ |
644,555 |
|
|
$ |
633,238 |
|
|
$ |
633,925 |
|
|
$ |
629,478 |
|
Return on average
common equity |
|
10.15 |
% |
|
|
10.44 |
% |
|
|
12.57 |
% |
|
|
12.92 |
% |
|
|
9.86 |
% |
|
|
10.30 |
% |
|
|
8.84 |
% |
Non-GAAP core return
on average tangible common equity |
|
10.82 |
% |
|
|
10.44 |
% |
|
|
12.57 |
% |
|
|
15.94 |
% |
|
|
9.02 |
% |
|
|
10.63 |
% |
|
|
8.42 |
% |
|
|
Quarter Ended |
|
|
|
Six Months Ended |
|
|
|
6/30/2022 |
|
|
|
3/31/2022 |
|
|
|
12/31/2021 |
|
|
|
9/30/2021 |
|
|
|
6/30/2021 |
|
|
|
6/30/2022 |
|
|
|
6/30/2021 |
|
|
|
(Dollars in thousands) |
|
Non-GAAP core
operating return on average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
15,545 |
|
|
$ |
16,828 |
|
|
$ |
20,801 |
|
|
$ |
21,000 |
|
|
$ |
15,577 |
|
|
$ |
32,373 |
|
|
$ |
27,612 |
|
Non-GAAP core operating income |
|
16,574 |
|
|
|
16,828 |
|
|
|
20,801 |
|
|
|
25,898 |
|
|
|
14,245 |
|
|
|
33,402 |
|
|
|
26,280 |
|
Average assets |
$ |
5,545,657 |
|
|
$ |
5,563,738 |
|
|
$ |
5,490,482 |
|
|
$ |
5,408,984 |
|
|
$ |
5,673,638 |
|
|
$ |
5,554,648 |
|
|
$ |
5,735,558 |
|
Return on average
assets |
|
1.12 |
% |
|
|
1.23 |
% |
|
|
1.50 |
% |
|
|
1.54 |
% |
|
|
1.10 |
% |
|
|
1.18 |
% |
|
|
0.97 |
% |
Non-GAAP core
operating return on average assets |
|
1.20 |
% |
|
|
1.23 |
% |
|
|
1.50 |
% |
|
|
1.90 |
% |
|
|
1.01 |
% |
|
|
1.21 |
% |
|
|
0.92 |
% |
|
|
Quarter Ended |
|
6/30/2022 |
|
|
3/31/2022 |
|
|
12/31/2021 |
|
|
9/30/2021 |
|
|
6/30/2021 |
|
|
(Dollars in thousands except per share data) |
Tangible common stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
$ |
608,016 |
|
|
$ |
623,199 |
|
|
$ |
667,573 |
|
|
$ |
652,407 |
|
|
$ |
637,190 |
Less: goodwill and other intangible assets |
|
91 |
|
|
|
110 |
|
|
|
130 |
|
|
|
149 |
|
|
|
169 |
Tangible common
stockholders' equity |
$ |
607,925 |
|
|
$ |
623,089 |
|
|
$ |
667,443 |
|
|
$ |
652,258 |
|
|
$ |
637,021 |
Tangible book value
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common stockholders' equity |
$ |
607,925 |
|
|
$ |
623,089 |
|
|
$ |
667,443 |
|
|
$ |
652,257 |
|
|
$ |
637,021 |
Shares outstanding at end of period |
|
49,535,949 |
|
|
|
49,728,253 |
|
|
|
50,450,045 |
|
|
|
51,002,698 |
|
|
|
50,958,680 |
Book value per
share |
$ |
12.27 |
|
|
$ |
12.53 |
|
|
$ |
13.23 |
|
|
$ |
12.79 |
|
|
$ |
12.50 |
Tangible book value
per share |
$ |
12.27 |
|
|
$ |
12.53 |
|
|
$ |
13.23 |
|
|
$ |
12.79 |
|
|
$ |
12.50 |
|
|
Quarter Ended |
|
|
|
6/30/2022 |
|
|
|
3/31/2022 |
|
|
|
12/31/2021 |
|
|
|
9/30/2021 |
|
|
|
6/30/2021 |
|
|
(Dollars in thousands) |
|
Non-GAAP loan growth,
excluding PPP loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans, net of unearned income |
$ |
4,528,234 |
|
|
$ |
4,349,558 |
|
|
$ |
4,256,213 |
|
|
$ |
4,233,117 |
|
|
$ |
4,237,944 |
|
Less: PPP loans, net of unearned income |
|
14,536 |
|
|
|
31,200 |
|
|
|
64,805 |
|
|
|
109,465 |
|
|
|
197,084 |
|
Non-PPP gross loans, net of unearned income |
$ |
4,513,698 |
|
|
$ |
4,318,358 |
|
|
$ |
4,191,408 |
|
|
$ |
4,123,652 |
|
|
$ |
4,040,860 |
|
Year-over-year loan growth |
|
6.85 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP year-over-year loan growth excluding PPP loans |
|
12.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Linked quarter loan growth |
|
4.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP linked quarter loan growth excluding PPP loans |
|
4.52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
Six Months Ended |
|
|
|
6/30/2022 |
|
|
|
3/31/2022 |
|
|
|
12/31/2021 |
|
|
|
9/30/2021 |
|
|
|
6/30/2021 |
|
|
|
6/30/2022 |
|
|
|
6/30/2021 |
|
|
|
(Dollars in thousands) |
|
Non-GAAP Core
Operating Efficiency Ratio - Fully Tax Equivalent
(FTE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense |
$ |
29,203 |
|
|
$ |
27,666 |
|
|
$ |
26,715 |
|
|
$ |
24,036 |
|
|
|
$ |
25,813 |
|
|
$ |
56,869 |
|
|
$ |
48,631 |
|
Less: Accelerated employee benefits |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
719 |
|
|
|
- |
|
|
|
719 |
|
Adjusted Non-interest expense
(numerator) |
$ |
29,203 |
|
|
$ |
27,666 |
|
|
$ |
26,715 |
|
|
$ |
24,036 |
|
|
|
$ |
25,094 |
|
|
$ |
56,869 |
|
|
$ |
47,912 |
|
Net interest income |
|
46,709 |
|
|
|
43,115 |
|
|
|
43,445 |
|
|
|
41,801 |
|
|
|
|
42,328 |
|
|
|
89,824 |
|
|
|
83,445 |
|
Tax equivalent interest income(1) |
|
810 |
|
|
|
775 |
|
|
|
762 |
|
|
|
748 |
|
|
|
|
734 |
|
|
|
1,583 |
|
|
|
1,438 |
|
Non-interest income (loss) |
|
4,201 |
|
|
|
4,942 |
|
|
|
4,796 |
|
|
|
(1,105 |
) |
|
|
|
5,825 |
|
|
|
9,143 |
|
|
|
9,969 |
|
Add: Acquisition costs |
|
239 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
239 |
|
|
|
- |
|
Add: Employee separation |
|
1,063 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
1,063 |
|
|
|
- |
|
Add: Unrealized loss on equity security |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,200 |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Less: BOLI settlement benefits(2) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
1,841 |
|
|
|
- |
|
|
|
1,841 |
|
Total tax-equivalent income
(denominator) |
$ |
53,022 |
|
|
$ |
48,832 |
|
|
$ |
49,003 |
|
|
$ |
47,644 |
|
|
|
$ |
47,046 |
|
|
$ |
101,852 |
|
|
$ |
93,011 |
|
Efficiency
Ratio |
|
57.36 |
% |
|
|
57.57 |
% |
|
|
55.38 |
% |
|
|
59.06 |
|
% |
|
|
53.61 |
% |
|
|
57.46 |
% |
|
|
52.06 |
% |
Non-GAAP Core
Operating Efficiency Ratio - Fully Tax Equivalent
(FTE) |
|
55.08 |
% |
|
|
56.66 |
% |
|
|
54.52 |
% |
|
|
50.45 |
|
% |
|
|
53.34 |
% |
|
|
55.83 |
% |
|
|
51.51 |
% |
(1) Tax exempt
income (tax-free municipal securities) is calculated on a tax
equivalent basis. The incremental tax rate used is 21.0%. |
|
(2) No tax
effect. |
|
|
|
|
|
Quarter Ended |
|
|
|
Six Months Ended |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|
12/31/2021 |
|
|
9/30/2021 |
|
|
6/30/2021 |
|
|
6/30/2022 |
|
|
6/30/2021 |
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
Non-GAAP Pre-Tax
Pre-Provision Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income before taxes |
$ |
19,572 |
|
|
$ |
21,016 |
|
|
|
$ |
26,526 |
|
|
|
$ |
26,660 |
|
|
|
$ |
18,840 |
|
|
$ |
40,588 |
|
|
$ |
33,783 |
|
Add: Provision for credit losses |
|
2,135 |
|
|
|
(625 |
) |
|
|
|
(5,000 |
) |
|
|
|
(10,000 |
) |
|
|
|
3,500 |
|
|
|
1,510 |
|
|
|
11,000 |
|
Non-GAAP Pre-Tax
Pre-Provision Profit |
$ |
21,707 |
|
|
$ |
20,391 |
|
|
|
$ |
21,526 |
|
|
|
$ |
16,660 |
|
|
|
$ |
22,340 |
|
|
$ |
42,098 |
|
|
$ |
44,783 |
|
INVESTOR CONTACTHeather
WorleyHeather@crossfirst.com | (214)
676-4666https://investors.crossfirstbankshares.com
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