Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 INVESTOR PRESENTATION - CROSSFIRST BANKSHARES, INC. | q42019investordeck.htm |
| 8-K/A - 8-K/A - CROSSFIRST BANKSHARES, INC. | q42019crossfirst8kaform.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE | CROSSFIRST BANKSHARES, INC. CONTACT: | |
February 24, 2020 | Matt Needham, Director of Investor Relations | |
(913) 312-6822
https://investors.crossfirstbankshares.com
CrossFirst Bankshares, Inc. Reports Revised Fourth Quarter & Full-Year 2019 Results
LEAWOOD, KS. February 24, 2020 (GLOBE NEWSWIRE) -- CrossFirst Bankshares, Inc. (Nasdaq: CFB), the bank holding company for CrossFirst Bank, announced that it has revised its preliminary financial results for fourth quarter and full year 2019, which were previously reported on January 23, 2020. In connection with the preparation and review of its 2019 financial statements, the Company has concluded it is necessary to record an additional loan loss provision of $16 million for fourth quarter 2019. The need for additional provision was determined through the Company's internal monitoring processes for reviewing problem credits and resulted from new information obtained in the first quarter of 2020. The additional provision is based on information obtained subsequent to preliminary results on January 23rd and related to the previously disclosed large nonperforming asset. The Company recorded the additional provision as a result of recent deterioration in the borrower's business and the value of the underlying collateral.
The Company's previously reported preliminary results included net income of $11.4 million, or $0.22 per diluted share, for fourth quarter 2019, and full-year 2019 net income of $40.6 million, or $0.83 per diluted share. After the impact of the additional provision (net of tax), the Company now reports a net loss of $700 thousand, or ($0.01) per diluted share for fourth quarter 2019, and full-year 2019 net income of $28.5 million, or $0.58 per diluted share. Full-year net income of $28.5 million, still resulted in a year-over-year increase of 45% and $0.11 per diluted change for full-year 2019, a 23% year-over-year increase.
"The provision had a negative impact on our fourth quarter and 2019 results, but it does not change our strong outlook for 2020 earnings." said CrossFirst's President and CEO George F. Jones, Jr. "I continue to remain very proud of our teams and what we have accomplished for the year. Even after the additional provision, we were able to deliver a 45% increase in net income for full-year 2019."
Material Updates to the Provision
The Company recorded a total provision of $19.4 million for the fourth quarter and $29.9 million for full year 2019 instead of the $3.4 million and $13.9 million initially reported. After the increased provision, the allowance to total loans increased to 1.48% at December 31, 2019 from 1.18% at the end of the third quarter of 2019. In addition, the total allowance was $56.9 million at year end 2019 compared to $37.8 million at year-end 2018. No additional charge-offs were recorded from what was originally reported on January 23, 2020.
Impact to Income Taxes
CrossFirst’s revised effective tax rate for the twelve months ended December 31, 2019 was 12.7%, compared to the previously reported effective tax rate of 16.6%.
Updated Previously Furnished Earnings Materials
In addition to issuing this revised earnings release, the Company has revised its earnings presentation and posted the materials on the Company's website. The Company believes these revisions only relate to its fourth quarter and annual results for 2019 and do not impact any statements in its previously filed documents with the Securities and Exchange Commission for any other period, and therefore, those previous reports may continue to be relied upon as filed.
For completeness, the Company has included all previously announced financial results disclosures and related tables with this press release as revised. These results supersede the results previously disclosed in the January 23, 2020 press release.
1
Exhibit 99.1
2019 Fourth Quarter and Full-Year Highlights:
• | Approaching $5 billion of assets with 30% operating revenue growth compared to full-year 2018 |
• | Quarterly net loss of $700 thousand, compared to net income of $10.3 million for the fourth quarter of 2018 |
• | Full-year net income of $28.5 million, a year-over-year increase of 45% |
• | Diluted EPS of $0.58 for full-year 2019, a year-over-year increase of 23% |
• | Achieved efficiency ratios of 55.6% for the quarter and 58.4% for the year |
• | Grew loans by $223 million from the previous quarter and $793 million or 26% since year-end December 31, 2018 |
• | Grew deposits by $266 million from the previous quarter and $716 million or 22% since year-end December 31, 2018 |
• | Book value per share of $11.58 at December 31, 2019 compared to $10.21 at December 31, 2018 |
Quarter-to-Date | Year-to-Date | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2018 | 2019 | 2018 | 2019 | |||||||||||||
(Dollars in millions except per share data) | ||||||||||||||||
Operating revenue(1) | $ | 33.5 | $ | 39.4 | $ | 116.5 | $ | 150.2 | ||||||||
Net income (loss) | $ | 10.3 | $ | (0.7 | ) | $ | 19.6 | $ | 28.5 | |||||||
Diluted earnings (loss) per share | $ | 0.22 | $ | (0.01 | ) | $ | 0.47 | $ | 0.58 | |||||||
Return on average assets | 1.06 | % | (0.06 | )% | 0.56 | % | 0.63 | % | ||||||||
Non-GAAP core operating return on average assets(2) | 0.67 | % | (0.06 | )% | 0.57 | % | 0.61 | % | ||||||||
Return on average common equity | 9.03 | % | (0.46 | )% | 5.34 | % | 5.38 | % | ||||||||
Non-GAAP return on average tangible common equity(2) | 9.20 | % | (0.46 | )% | 5.47 | % | 5.46 | % | ||||||||
Net interest margin | 3.44 | % | 3.17 | % | 3.29 | % | 3.26 | % | ||||||||
Net interest margin, fully tax-equivalent(3) | 3.51 | % | 3.23 | % | 3.39 | % | 3.31 | % | ||||||||
Efficiency ratio | 60.2 | % | 55.6 | % | 73.6 | % | 58.4 | % | ||||||||
Non-GAAP core operating efficiency ratio, fully tax-equivalent(2)(3) | 61.4 | % | 54.7 | % | 67.7 | % | 57.2 | % | ||||||||
(1) Net interest income plus non-interest income. | ||||||||||||||||
(2) Represents a non-GAAP measure. See "Table 6. Non-GAAP Financial Measures" for a reconciliation of this measure. | ||||||||||||||||
(3) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental federal tax rate used is 21.0%. | ||||||||||||||||
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CROSSFIRST BANKSHARES, INC.
Income from Operations
Net Interest Income
The Company produced interest income of $55.2 million for the fourth quarter of 2019, an increase of 17% from the fourth quarter of 2018 and remained flat from the previous quarter due to the declining interest rate environment. Full-year interest income is up 38% year-over- year primarily as a result of continued strong growth in average earning assets. The tax-equivalent yield on earning assets declined from 5.00% to 4.76% during the fourth quarter of 2019 primarily due to the movement of variable rate assets indexed to market rates.
Interest expense for the fourth quarter of 2019 was $18.0 million, or 22% higher than the fourth quarter of 2018 and 9% lower than the third quarter of 2019. Average interest-bearing deposits in the fourth quarter of 2019 totaled $3.3 billion, an increase of $806 million or 33% from the same quarter in 2018. Compared to the third quarter of 2019, interest-bearing deposit mix changes during the quarter were a result of responding to declining rates to lower margin exposure, therefore most of the new deposit growth came from variable rate accounts. Non-deposit funding costs decreased to 1.86% from 1.95% in the third quarter of 2019 while overall cost of funds for the quarter was 1.71%, compared to 1.94% for the third quarter of 2019.
Tax-equivalent net interest margin declined to 3.23% for the quarter compared to 3.51% for the same quarter in 2018, reflecting the impact of the declining rate environment. For full-year 2019, the Company reported a tax equivalent net interest margin of 3.31%, slightly lower than full-year 2018 results. The tax-equivalent adjustment, which accounts for income taxes saved on the interest earned on nontaxable securities and loans, was $0.7 million for the fourth quarter of both 2019 and 2018, and $0.6 million for the third quarter of 2019. Net interest income totaled $37.2 million for the fourth quarter of 2019 or 4% greater than the third quarter of 2019. Full-year 2019 net interest income totaled $141.4 million or 28% higher than the same period of 2018 reflecting the Company's strong balance sheet growth and maintenance of net interest margin.
Non-Interest Income
Non-interest income increased $1.0 million in the fourth quarter of 2019 or 83% compared to the same quarter of 2018 and decreased $1.0 million or 32% lower compared to the third quarter of 2019. While the Company continues to increase fee income commensurate with its growth, during the quarter the Company recorded $0.5 million of bond gains as well as more income from the back to back swap program than in the fourth quarter in 2018. The reduction in non-interest income from the prior quarter was due to increased activity for swap fees and a one-time $0.8 million gain related to a change in derivative valuation in the third quarter of 2019. For full-year 2019, non-interest income increased $2.6 million compared to full-year 2018 primarily due to the increased swap activity, the revaluation of the swap program, and the additional activity derived from additional balance sheet and customer growth.
Non-Interest Expense
Non-interest expense for the fourth quarter of 2019 increased $1.7 million, or 9%, compared to the fourth quarter of 2018 and increased $0.7 million, or 3%, from the third quarter of 2019. Compared to the fourth quarter of 2018, salary and employment-related expenses increased $1.4 million for additional employee headcount required to support growth and data processing costs were higher from the Company's increased volumes of activity from balance sheet growth and a larger customer base. As compared to the third quarter of 2019, salary and employment-related expenses decreased $0.4 million as a result of continuing to manage resource allocation and hiring, FDIC insurance expense increased as a result of a one-time small bank credit in the third quarter and professional fees increased $0.6 million. For full-year 2019, non-interest expense increased 2% or $1.9 million compared to full-year 2018 primarily due to salary and employment expenses to support growth and higher data processing costs.
CrossFirst’s effective tax rate for the twelve months ended December 31, 2019 was 12.7% as compared to (13.9)% for the twelve months ended December 31, 2018. The year-over-year change was due to higher earnings, state tax credits related to our new headquarters, a reduction in tax-exempt income due to average yields on tax exempt securities decreasing, and permanent tax benefits from stock-based compensation awards vested and exercised in 2018 as compared to 2019. The effective tax rate for the fourth quarter of 2019 was not available due to a quarterly net loss, and was (16.8)% for the fourth quarter of 2018. For both of the comparable periods, the Company continued to benefit from the tax-exempt municipal bond portfolio creating an effective tax rate lower than the statutory tax rates.
Balance Sheet Performance & Analysis
During the fourth quarter of 2019, total assets increased by $280 million or 6% compared to September 30, 2019 with both strong loan and deposit growth. Asset growth for CrossFirst was $824 million or 20% year-over-year. During the fourth quarter of 2019, total available for sale investment securities increased $9 million to $742 million, while the overall average for the quarter was $745 million. Tax-exempt municipal securities on average increased $35 million and mortgage-backed securities decreased $19 million. Overall, the Company increased the size of the bond portfolio during 2019 by $78 million, or 12% compared to year-end 2018. The increase in investment securities was part of management's strategy to manage liquidity and optimize income.
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CROSSFIRST BANKSHARES, INC.
Loan Growth Results
The Company continued to maintain a diversified loan portfolio while experiencing strong loan growth of 6% for the fourth quarter of 2019 and 26% since December 31, 2018. Loan yields declined 32 basis points in the overall portfolio commensurate with the adjustable rate loan movements in LIBOR and Prime during the quarter. The Company experienced $174 million in payoffs for the quarter, but funded $255 million in loans to new borrowers to replace and grow the overall portfolio.
(Dollars in millions) | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | % of Total | QoQ Growth ($) | QoQ Growth (%)(1) | YoY Growth ($) | YoY Growth (%)(1) | ||||||||||||||||||||||||||
Average loans (gross) | ||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,021 | $ | 1,145 | $ | 1,224 | $ | 1,284 | $ | 1,315 | 35 | % | $ | 31 | 2 | % | $ | 294 | 29 | % | ||||||||||||||||
Energy | 349 | 367 | 383 | 389 | 400 | 11 | 11 | 3 | 51 | 15 | ||||||||||||||||||||||||||
Commercial real estate | 810 | 866 | 946 | 974 | 1,007 | 27 | 33 | 3 | 197 | 24 | ||||||||||||||||||||||||||
Construction and land development | 449 | 444 | 457 | 487 | 599 | 16 | 112 | 23 | 150 | 33 | ||||||||||||||||||||||||||
Residential real estate | 240 | 310 | 342 | 362 | 384 | 10 | 22 | 6 | 144 | 60 | ||||||||||||||||||||||||||
Consumer & Equity Lines | 42 | 44 | 46 | 45 | 45 | 1 | — | (1 | ) | 3 | 5 | |||||||||||||||||||||||||
Total | $ | 2,911 | $ | 3,176 | $ | 3,398 | $ | 3,541 | $ | 3,750 | 100 | % | $ | 209 | 6 | % | $ | 839 | 29 | % | ||||||||||||||||
Yield on loans for the period ending | 5.56 | % | 5.75 | % | 5.66 | % | 5.53 | % | 5.21 | % | ||||||||||||||||||||||||||
(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 Growth Results
The Company continues to maintain a traditional deposit mix, with the goal of keeping pace with growth in the loan portfolio. Deposit growth was primarily funded with money market accounts during the fourth quarter, which have historically adjusted with movements in Federal Funds rates. During the fourth quarter, the Company added short term wholesale funding and $62 million of brokered deposits to replace the brokered funding that previously rolled off in the third quarter of 2019.
(Dollars in millions) | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | % of Total | QoQ Growth ($) | QoQ Growth (%)(1) | YoY Growth ($) | YoY Growth (%)(1) | ||||||||||||||||||||||||||
Average deposits | ||||||||||||||||||||||||||||||||||||
Non-interest bearing deposits | $ | 492 | $ | 477 | $ | 513 | $ | 535 | $ | 522 | 14 | % | $ | (13 | ) | (3 | )% | $ | 30 | 6 | % | |||||||||||||||
Transaction deposits | 63 | 104 | 144 | 135 | 200 | 5 | % | 65 | 49 | 137 | 217 | |||||||||||||||||||||||||
Savings and money market deposits | 1,498 | 1,544 | 1,560 | 1,744 | 1,854 | 49 | % | 110 | 6 | 356 | 24 | |||||||||||||||||||||||||
Time deposits | 913 | 1,165 | 1,305 | 1,277 | 1,226 | 32 | % | (51 | ) | (4 | ) | 313 | 34 | |||||||||||||||||||||||
Total | $ | 2,966 | $ | 3,290 | $ | 3,522 | $ | 3,691 | $ | 3,802 | 100 | % | $ | 111 | 3 | % | $ | 836 | 28 | % | ||||||||||||||||
Cost of deposits for the period ending | 1.70 | % | 1.96 | % | 1.99 | % | 1.94 | % | 1.70 | % | ||||||||||||||||||||||||||
Cost of interest-bearing deposits for the period ending | 2.04 | % | 2.30 | % | 2.33 | % | 2.26 | % | 1.97 | % | ||||||||||||||||||||||||||
(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. | ||||||||||||||||||||||||||||||||||||
4
CROSSFIRST BANKSHARES, INC.
Asset Quality Position
The Company added to the allowance for loan loss as a result of the adverse changes in the large nonperforming loan described above and
in order to support loan growth and other changes in relative risk for the overall portfolio, recording a provision expense of $19.4 million for the fourth quarter. Net charge-offs were $5.5 million for the quarter, including a partial charge-off of the large non-performing loan described above, as compared to charge-offs of $0.2 million for the fourth quarter in 2018. The following table provides information regarding asset quality as well as other asset quality metrics.
Asset quality (Dollars in millions) | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | ||||||||||||||
Non-accrual loans | $ | 17.8 | $ | 13.0 | $ | 50.0 | $ | 43.6 | $ | 39.7 | |||||||||
Other real estate owned | — | 2.5 | 2.5 | 2.5 | 3.6 | ||||||||||||||
Non-performing assets | 17.8 | 15.5 | 52.8 | 46.7 | 47.9 | ||||||||||||||
Loans 90+ days past due and still accruing | — | — | 0.2 | 0.6 | 4.6 | ||||||||||||||
Loans 30 - 89 days past due | 3.7 | 31.1 | 23.6 | 64.7 | 6.8 | ||||||||||||||
Net charge-offs (recoveries) | 0.2 | 0.7 | — | 4.7 | 5.5 | ||||||||||||||
Asset quality metrics (%) | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | |||||||||
Non-performing assets to total assets | 0.43 | % | 0.36 | % | 1.18 | % | 1.00 | % | 0.97 | % | ||||
Allowance for loan loss to total loans | 1.23 | 1.22 | 1.24 | 1.18 | 1.48 | |||||||||
Allowance for loan loss to non-performing loans | 212 | 307 | 85 | 97 | 129 | |||||||||
Net charge-offs (recoveries) to average loans(1) | 0.03 | 0.09 | — | 0.53 | 0.58 | |||||||||
Provision to average loans(1) | 0.61 | 0.36 | 0.34 | 0.54 | 2.05 | |||||||||
(1) Interim periods annualized. | ||||||||||||||
Capital Position
At December 31, 2019, stockholders’ equity totaled $602 million, or $11.58 per share, compared to $602 million, or $11.59 per share, at September 30, 2019. Tangible common stockholders' equity was $594 million and tangible book value per share was $11.43 at December 31, 2019.
Period-end (Dollars in millions, except per share data) | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | ||||||||||||||
Total Stockholders' Equity | $ | 490 | $ | 481 | $ | 499 | $ | 602 | $ | 602 | |||||||||
Book value per share | $ | 10.21 | $ | 10.63 | $ | 11.00 | $ | 11.59 | $ | 11.58 | |||||||||
Tangible book value per share(1) | $ | 10.04 | $ | 10.46 | $ | 10.83 | $ | 11.44 | $ | 11.43 | |||||||||
Common equity tier 1 capital ratio | 11.75 | % | 11.23 | % | 11.02 | % | 12.91 | % | 12.20 | % | |||||||||
Tier 1 capital ratio | 12.53 | 11.23 | 11.04 | 12.93 | 12.22 | ||||||||||||||
Total capital ratio | 13.51 | 12.20 | 12.04 | 13.90 | 13.43 | ||||||||||||||
Leverage ratio | 12.43 | 11.15 | 10.87 | 12.57 | 12.06 | ||||||||||||||
(1) Represents a non-GAAP measure. See "Table 6. Non-GAAP Financial Measures" for a reconciliation of this measure. | |||||||||||||||||||
During the third quarter of 2019, the Company issued 6,594,362 new shares in its initial public offering, including the over-allotment, bringing its total net proceeds from the offering to approximately $87.0 million. The Company intends to use the net proceeds from the offering to support growth, organically or through mergers and acquisitions, and for general corporate purposes. As previously disclosed, the Company is currently considering using a portion of the net proceeds for the opening of a second smaller full-service branch in the Dallas MSA, in addition to consistently evaluating other strategic opportunities.
5
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 Annual Report on Form 10-K is filed. This earnings release contains forward-looking statements. These forward-looking statements reflect the Company's current views with respect to, among other things, future events and its 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,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. 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 our 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, those listed from time to time in reports that the Company files with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.
About CrossFirst
CrossFirst Bankshares, Inc., 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 seven full-service banking offices primarily along the I-35 corridor in Kansas, Missouri, Oklahoma and Texas.
Unaudited Financial Tables
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CROSSFIRST BANKSHARES, INC.
TABLE 1. CONSOLIDATED BALANCE SHEETS
As of December 31, | |||||||
2018 | 2019 | ||||||
(unaudited) | |||||||
(Dollars in thousands) | |||||||
Assets | |||||||
Cash and cash equivalents | $ | 216,541 | $ | 187,320 | |||
Available-for-sale securities - taxable | 296,133 | 298,208 | |||||
Available-for-sale securities - tax-exempt | 367,545 | 443,426 | |||||
Premises and equipment, held for sale | 3,444 | — | |||||
Loans, net of allowance for loan losses of $56,896 and $37,826 at December 31, 2019 and 2018, respectively | 3,022,921 | 3,795,348 | |||||
Premises and equipment, net | 74,945 | 70,210 | |||||
Restricted equity securities | 14,525 | 17,278 | |||||
Interest receivable | 14,092 | 15,716 | |||||
Foreclosed assets held for sale | — | 3,619 | |||||
Deferred tax asset | 16,316 | 13,782 | |||||
Goodwill and other intangible assets, net | 7,796 | 7,694 | |||||
Bank-owned life insurance | 63,811 | 65,689 | |||||
Other | 9,146 | 12,943 | |||||
Total assets | $ | 4,107,215 | $ | 4,931,233 | |||
Liabilities and stockholders’ equity | |||||||
Deposits | |||||||
Noninterest bearing | $ | 484,284 | $ | 521,826 | |||
Savings, NOW and money market | 1,714,136 | 2,162,187 | |||||
Time | 1,009,677 | 1,239,746 | |||||
Total deposits | 3,208,097 | 3,923,759 | |||||
Federal funds purchased and repurchase agreements | 75,406 | 14,921 | |||||
Federal Home Loan Bank advances | 312,985 | 358,743 | |||||
Other borrowings | 884 | 921 | |||||
Interest payable and other liabilities | 19,507 | 31,245 | |||||
Total liabilities | 3,616,879 | 4,329,589 | |||||
Stockholders’ equity | |||||||
Redeemable preferred stock, $0.01 par value, $25 liquidation value: | |||||||
authorized - 5,000,000 shares, issued - 0 and 1,200,000 shares at December 31, 2019 and 2018, respectively | 12 | — | |||||
Common stock, $0.01 par value: | |||||||
authorized - 200,000,000 shares, issued - 51,969,203 and 45,074,322 shares at December 31, 2019 and 2018, respectively | 451 | 520 | |||||
Additional paid-in capital | 454,512 | 519,870 | |||||
Retained earnings | 38,567 | 64,888 | |||||
Other | (196 | ) | (85 | ) | |||
Accumulated other comprehensive income (loss) | (3,010 | ) | 16,451 | ||||
Total stockholders’ equity | 490,336 | 601,644 | |||||
Total liabilities and stockholders’ equity | $ | 4,107,215 | $ | 4,931,233 | |||
7
CROSSFIRST BANKSHARES, INC.
TABLE 2. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2019 | 2018 | 2019 | ||||||||||||
(Dollars in thousands except per share data) | |||||||||||||||
Interest Income | |||||||||||||||
Loans, including fees | $ | 40,813 | $ | 49,208 | $ | 130,075 | $ | 191,527 | |||||||
Available for sale securities | |||||||||||||||
Available for sale securities - Taxable | 2,243 | 1,894 | 7,972 | 8,540 | |||||||||||
Available for sale securities - Tax-exempt | 3,135 | 3,191 | 14,757 | 12,011 | |||||||||||
Deposits with financial institutions | 615 | 601 | 3,096 | 3,053 | |||||||||||
Dividends on bank stocks | 262 | 286 | 980 | 1,087 | |||||||||||
Total interest income | 47,068 | 55,180 | 156,880 | 216,218 | |||||||||||
Interest Expense | |||||||||||||||
Deposits | 12,733 | 16,247 | 39,372 | 67,668 | |||||||||||
Fed funds purchased and repurchase agreements | 440 | 91 | 1,068 | 592 | |||||||||||
Advances from Federal Home Loan Bank | 1,533 | 1,628 | 5,841 | 6,367 | |||||||||||
Other borrowings | 47 | 35 | 231 | 147 | |||||||||||
Total interest expense | 14,753 | 18,001 | 46,512 | 74,774 | |||||||||||
Net Interest Income | 32,315 | 37,179 | 110,368 | 141,444 | |||||||||||
Provision for Loan Losses | 4,500 | 19,350 | 13,500 | 29,900 | |||||||||||
Net Interest Income after Provision for Loan Losses | 27,815 | 17,829 | 96,868 | 111,544 | |||||||||||
Non-Interest Income | |||||||||||||||
Service charges and fees (rebates) on customer accounts | (62 | ) | 163 | 444 | 604 | ||||||||||
Gain (loss) on sale of available for sale securities | (70 | ) | 520 | 538 | 987 | ||||||||||
Impairment of premises and equipment held for sale | — | — | (171 | ) | (424 | ) | |||||||||
Gain on sale of loans | 209 | — | 827 | 207 | |||||||||||
Income from bank-owned life insurance | 458 | 462 | 1,969 | 1,878 | |||||||||||
Swap fee income, net | (14 | ) | 338 | 285 | 2,753 | ||||||||||
Other non-interest income | 674 | 703 | 2,191 | 2,710 | |||||||||||
Total non-interest income | 1,195 | 2,186 | 6,083 | 8,715 | |||||||||||
Non-Interest Expense | |||||||||||||||
Salaries and employee benefits | 12,429 | 13,818 | 56,118 | 57,114 | |||||||||||
Occupancy | 2,015 | 2,048 | 8,214 | 8,349 | |||||||||||
Professional fees | 899 | 1,041 | 3,320 | 2,964 | |||||||||||
Deposit insurance premiums | 775 | 767 | 3,186 | 2,787 | |||||||||||
Data processing | 525 | 676 | 1,995 | 2,544 | |||||||||||
Advertising | 709 | 685 | 2,691 | 2,455 | |||||||||||
Software and communication | 672 | 910 | 2,630 | 3,317 | |||||||||||
Depreciation and amortization | 482 | 414 | 1,788 | 1,734 | |||||||||||
Other non-interest expense | 1,660 | 1,526 | 5,813 | 6,384 | |||||||||||
Total non-interest expense | 20,166 | 21,885 | 85,755 | 87,648 | |||||||||||
Net Income (Loss) Before Taxes | 8,844 | (1,870 | ) | 17,196 | 32,611 | ||||||||||
Income tax expense (benefit) | (1,490 | ) | (1,170 | ) | (2,394 | ) | 4,138 | ||||||||
Net Income (Loss) | $ | 10,334 | $ | (700 | ) | $ | 19,590 | $ | 28,473 | ||||||
Basic Earnings (Loss) Per Share | $ | 0.22 | $ | (0.01 | ) | $ | 0.48 | $ | 0.59 | ||||||
Diluted Earnings (Loss) Share | $ | 0.22 | $ | (0.01 | ) | $ | 0.47 | $ | 0.58 | ||||||
8
CROSSFIRST BANKSHARES, INC.
TABLE 3. YEAR-TO-DATE ANALYSIS OF CHANGES IN NET INTEREST INCOME
(UNAUDITED)
Twelve Months Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2018 | 2019 | ||||||||||||||||||||
Average Balance | Interest Income / Expense | Average Yield / Rate(3) | Average Balance | Interest Income / Expense | Average Yield / Rate(3) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Securities - taxable | $ | 281,709 | $ | 8,952 | 3.18 | % | $ | 330,051 | $ | 9,627 | 2.92 | % | |||||||||
Securities - tax-exempt(1) | 459,231 | 17,856 | 3.89 | 390,908 | 14,533 | 3.72 | |||||||||||||||
Federal funds sold | 16,377 | 339 | 2.07 | 15,195 | 364 | 2.40 | |||||||||||||||
Interest-bearing deposits in other banks | 159,279 | 2,757 | 1.73 | 139,538 | 2,689 | 1.93 | |||||||||||||||
Gross loans, net of unearned income(2) | 2,435,424 | 130,075 | 5.34 | 3,468,079 | 191,527 | 5.52 | |||||||||||||||
Total interest-earning assets(1) | 3,352,020 | $ | 159,979 | 4.77 | % | 4,343,771 | $ | 218,740 | 5.04 | % | |||||||||||
Allowance for loan losses | (30,921 | ) | (42,015 | ) | |||||||||||||||||
Other non-interest-earning assets | 173,556 | 198,008 | |||||||||||||||||||
Total assets | $ | 3,494,655 | $ | 4,499,764 | |||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Transaction deposits | $ | 56,321 | $ | 175 | 0.31 | % | $ | 146,109 | $ | 1,742 | 1.19 | % | |||||||||
Savings and money market deposits | 1,410,727 | 23,405 | 1.66 | 1,676,417 | 35,385 | 2.11 | |||||||||||||||
Time deposits | 835,595 | 15,792 | 1.89 | 1,243,304 | 30,541 | 2.46 | |||||||||||||||
Total interest-bearing deposits | 2,302,643 | 39,372 | 1.71 | 3,065,830 | 67,668 | 2.21 | |||||||||||||||
FHLB and short-term borrowings | 395,825 | 7,004 | 1.77 | 366,577 | 6,959 | 1.90 | |||||||||||||||
Trust preferred securities, net of fair value adjustments | 864 | 136 | 15.69 | 899 | 147 | 16.34 | |||||||||||||||
Non-interest-bearing deposits | 425,243 | — | — | 512,142 | — | — | |||||||||||||||
Cost of funds | 3,124,575 | $ | 46,512 | 1.49 | % | 3,945,448 | $ | 74,774 | 1.90 | % | |||||||||||
Other liabilities | 12,634 | 25,708 | |||||||||||||||||||
Stockholders’ equity | 357,446 | 528,608 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 3,494,655 | $ | 4,499,764 | |||||||||||||||||
Net interest income(1) | $ | 113,467 | $ | 143,966 | |||||||||||||||||
Net interest spread(1) | 3.28 | % | 3.14 | % | |||||||||||||||||
Net interest margin(1) | 3.39 | % | 3.31 | % | |||||||||||||||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0%. | |||||||||||||||||||||
(2) Average loan balances include nonaccrual loans. | |||||||||||||||||||||
(3) 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. | |||||||||||||||||||||
9
CROSSFIRST BANKSHARES, INC.
YEAR-TO-DATE VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED) | |||||||||||
Twelve Months Ended | |||||||||||
December 31, 2019 over 2018 | |||||||||||
Average Volume | Yield/Rate | Net Change(2) | |||||||||
(Dollars in thousands) | |||||||||||
Interest Income | |||||||||||
Securities - taxable | $ | 1,449 | $ | (774 | ) | $ | 675 | ||||
Securities - tax-exempt(1) | (2,568 | ) | (755 | ) | (3,323 | ) | |||||
Federal funds sold | (26 | ) | 51 | 25 | |||||||
Interest-bearing deposits in other banks | (365 | ) | 297 | (68 | ) | ||||||
Gross loans, net of unearned income | 56,927 | 4,525 | 61,452 | ||||||||
Total interest income(1) | 55,417 | 3,344 | 58,761 | ||||||||
Interest Expense | |||||||||||
Transaction deposits | 564 | 1,003 | 1,567 | ||||||||
Savings and money market deposits | 4,911 | 7,069 | 11,980 | ||||||||
Time deposits | 9,115 | 5,634 | 14,749 | ||||||||
Total interest-bearing deposits | 14,590 | 13,706 | 28,296 | ||||||||
FHLB and short-term borrowings | (538 | ) | 493 | (45 | ) | ||||||
Trust preferred securities, net of fair value adjustments | 5 | 6 | 11 | ||||||||
Total interest expense | 14,057 | 14,205 | 28,262 | ||||||||
Net interest income(1) | $ | 41,360 | $ | (10,861 | ) | $ | 30,499 | ||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental 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. | |||||||||||
10
CROSSFIRST BANKSHARES, INC.
TABLE 4. 2018 - 2019 QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME (UNAUDITED)
Three Months Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2018 | 2019 | ||||||||||||||||||||
Average Balance | Interest Income / Expense | Average Yield / Rate(3) | Average Balance | Interest Income / Expense | Average Yield / Rate(3) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Securities - taxable | $ | 305,995 | $ | 2,505 | 3.25 | % | $ | 317,524 | $ | 2,180 | 2.72 | % | |||||||||
Securities - tax-exempt(1) | 385,463 | 3,793 | 3.90 | 427,280 | 3,861 | 3.59 | |||||||||||||||
Federal funds sold | 9,239 | 58 | 2.49 | 4,750 | 19 | 1.61 | |||||||||||||||
Interest-bearing deposits in other banks | 113,403 | 558 | 1.95 | 152,917 | 582 | 1.51 | |||||||||||||||
Gross loans, net of unearned income(2) (3) | 2,911,350 | 40,812 | 5.56 | 3,749,865 | 49,208 | 5.21 | |||||||||||||||
Total interest-earning assets(1) | 3,725,450 | $ | 47,726 | 5.08 | % | 4,652,336 | $ | 55,850 | 4.76 | % | |||||||||||
Allowance for loan losses | (34,818 | ) | (44,051 | ) | |||||||||||||||||
Other non-interest-earning assets | 194,010 | 201,294 | |||||||||||||||||||
Total assets | $ | 3,884,642 | $ | 4,809,579 | |||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Transaction deposits | $ | 63,223 | $ | 74 | 0.46 | % | $ | 200,480 | $ | 603 | 1.19 | % | |||||||||
Savings and money market deposits | 1,498,075 | 7,747 | 2.05 | 1,854,042 | 8,059 | 1.72 | |||||||||||||||
Time deposits | 912,882 | 4,912 | 2.13 | 1,225,752 | 7,585 | 2.46 | |||||||||||||||
Total interest-bearing deposits | 2,474,180 | 12,733 | 2.04 | 3,280,274 | 16,247 | 1.97 | |||||||||||||||
FHLB and short-term borrowings | 439,322 | 1,984 | 1.79 | 366,190 | 1,719 | 1.86 | |||||||||||||||
Trust preferred securities, net of fair value adjustments | 876 | 36 | 16.34 | 913 | 35 | 15.18 | |||||||||||||||
Non-interest-bearing deposits | 491,689 | — | — | 521,799 | — | — | |||||||||||||||
Cost of funds | 3,406,067 | $ | 14,753 | 1.72 | % | 4,169,176 | $ | 18,001 | 1.71 | % | |||||||||||
Other liabilities | 17,694 | 34,443 | |||||||||||||||||||
Total stockholders' equity | 460,881 | 605,960 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 3,884,642 | $ | 4,809,579 | |||||||||||||||||
Net interest income(1) | $ | 32,973 | $ | 37,849 | |||||||||||||||||
Net interest spread(1) | 3.36 | % | 3.05 | % | |||||||||||||||||
Net interest margin(1) | 3.51 | % | 3.23 | % | |||||||||||||||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0%. | |||||||||||||||||||||
(2) Average loan balances include non-accrual loans. | |||||||||||||||||||||
(3) 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. | |||||||||||||||||||||
11
CROSSFIRST BANKSHARES, INC.
QUARTER TO DATE VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED) | |||||||||||
Three Months Ended | |||||||||||
December 31, 2019 over 2018 | |||||||||||
Average Volume | Yield/Rate | Net Change(2) | |||||||||
(Dollars in thousands) | |||||||||||
Interest Income | |||||||||||
Securities - taxable | $ | 93 | $ | (418 | ) | $ | (325 | ) | |||
Securities - tax-exempt(1) | 387 | (319 | ) | 68 | |||||||
Federal funds sold | (23 | ) | (16 | ) | (39 | ) | |||||
Interest-bearing deposits in other banks | 167 | (143 | ) | 24 | |||||||
Gross loans, net of unearned income | 11,105 | (2,709 | ) | 8,396 | |||||||
Total interest income(1) | 11,729 | (3,605 | ) | 8,124 | |||||||
Interest Expense | |||||||||||
Transaction deposits | 305 | 224 | 529 | ||||||||
Savings and money market deposits | 1,672 | (1,360 | ) | 312 | |||||||
Time deposits | 1,841 | 832 | 2,673 | ||||||||
Total interest-bearing deposits | 3,818 | (304 | ) | 3,514 | |||||||
FHLB and short-term borrowings | (340 | ) | 75 | (265 | ) | ||||||
Trust preferred securities, net of fair value adjustments | 1 | (2 | ) | (1 | ) | ||||||
Total interest expense | 3,479 | (231 | ) | 3,248 | |||||||
Net interest income(1) | $ | 8,250 | $ | (3,374 | ) | $ | 4,876 | ||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental 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. | |||||||||||
12
CROSSFIRST BANKSHARES, INC.
TABLE 5. LINKED QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME (UNAUDITED)
Three Months Ended | |||||||||||||||||||||
September 30, 2019 | December 31, 2019 | ||||||||||||||||||||
Average Balance | Interest Income / Expense | Average Yield / Rate(3) | Average Balance | Interest Income / Expense | Average Yield / Rate(3) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Securities - taxable | $ | 335,045 | $ | 2,263 | 2.68 | % | $ | 317,524 | $ | 2,180 | 2.72 | % | |||||||||
Securities - tax-exempt(1) | 392,644 | 3,592 | 3.63 | 427,280 | 3,861 | 3.59 | |||||||||||||||
Federal funds sold | 16,315 | 89 | 2.16 | 4,750 | 19 | 1.61 | |||||||||||||||
Interest-bearing deposits in other banks | 171,913 | 881 | 2.03 | 152,917 | 582 | 1.51 | |||||||||||||||
Gross loans, net of unearned income(2) (3) | 3,540,707 | 49,327 | 5.53 | 3,749,865 | 49,208 | 5.21 | |||||||||||||||
Total interest-earning assets(1) | 4,456,624 | $ | 56,152 | 5.00 | % | 4,652,336 | $ | 55,850 | 4.76 | % | |||||||||||
Allowance for loan losses | (43,327 | ) | (44,051 | ) | |||||||||||||||||
Other non-interest-earning assets | 197,661 | 201,294 | |||||||||||||||||||
Total assets | $ | 4,610,958 | $ | 4,809,579 | |||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Transaction deposits | $ | 134,987 | $ | 386 | 1.13 | % | $ | 200,480 | $ | 603 | 1.19 | % | |||||||||
Savings and money market deposits | 1,743,575 | 9,553 | 2.17 | 1,854,042 | 8,059 | 1.72 | |||||||||||||||
Time deposits | 1,276,571 | 8,064 | 2.51 | 1,225,752 | 7,585 | 2.46 | |||||||||||||||
Total interest-bearing deposits | 3,155,133 | 18,003 | 2.26 | 3,280,274 | 16,247 | 1.97 | |||||||||||||||
FHLB and short-term borrowings | 345,794 | 1,703 | 1.95 | 366,190 | 1,719 | 1.86 | |||||||||||||||
Trust preferred securities, net of fair value adjustments | 904 | 37 | 16.06 | 913 | 35 | 15.18 | |||||||||||||||
Non-interest-bearing deposits | 535,467 | — | — | 521,799 | — | — | |||||||||||||||
Cost of funds | 4,037,298 | $ | 19,743 | 1.94 | % | 4,169,176 | $ | 18,001 | 1.71 | % | |||||||||||
Other liabilities | 29,833 | 34,443 | |||||||||||||||||||
Total stockholders' equity | 543,827 | 605,960 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 4,610,958 | $ | 4,809,579 | |||||||||||||||||
Net interest income(1) | $ | 36,409 | $ | 37,849 | |||||||||||||||||
Net interest spread(1) | 3.06 | % | 3.05 | % | |||||||||||||||||
Net interest margin(1) | 3.24 | % | 3.23 | % | |||||||||||||||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0%. | |||||||||||||||||||||
(2) Average loan balances include nonaccrual loans. | |||||||||||||||||||||
(3) 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. | |||||||||||||||||||||
13
CROSSFIRST BANKSHARES, INC.
LINKED QUARTER VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED) | |||||||||||
Three Months Ended | |||||||||||
December 31, 2019 over September 30, 2019 | |||||||||||
Average Volume | Yield/Rate | Net Change(2) | |||||||||
(Dollars in thousands) | |||||||||||
Interest Income | |||||||||||
Securities - taxable | $ | (118 | ) | $ | 35 | $ | (83 | ) | |||
Securities - tax-exempt(1) | 310 | (41 | ) | 269 | |||||||
Federal funds sold | (51 | ) | (19 | ) | (70 | ) | |||||
Interest-bearing deposits in other banks | (90 | ) | (209 | ) | (299 | ) | |||||
Gross loans, net of unearned income | 2,825 | (2,944 | ) | (119 | ) | ||||||
Total interest income(1) | 2,876 | (3,178 | ) | (302 | ) | ||||||
Interest Expense | |||||||||||
Transaction deposits | 195 | 22 | 217 | ||||||||
Savings and money market deposits | 576 | (2,070 | ) | (1,494 | ) | ||||||
Time deposits | (319 | ) | (160 | ) | (479 | ) | |||||
Total interest-bearing deposits | 452 | (2,208 | ) | (1,756 | ) | ||||||
FHLB and short-term borrowings | 97 | (81 | ) | 16 | |||||||
Trust preferred securities, net of FV adjustments | — | (2 | ) | (2 | ) | ||||||
Total interest expense | 549 | (2,291 | ) | (1,742 | ) | ||||||
Net interest income(1) | $ | 2,327 | $ | (887 | ) | $ | 1,440 | ||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental 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. | |||||||||||
14
CROSSFIRST BANKSHARES, INC.
TABLE 6. NON-GAAP FINANCIAL MEASURES
Non-GAAP Financial Measures
In 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 of these non-GAAP measures below. The measures used in this release include the following:
• | We calculate "return on average tangible common equity" as net income (loss) available to common stockholders 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. |
• | We calculate ‘‘non-GAAP core operating income (loss)’’ as net income (loss) adjusted to remove non-recurring or non-core income and expense items related to: |
▪ | Restructuring charges and adjustments associated with the transition of a former executive - we incurred restructuring charges in the second quarter of 2018 related to the acceleration of certain stock-based compensation and employee costs, some of which were adjusted in the fourth quarter of 2018. |
▪ | Impairment charges associated with two buildings that were held-for-sale - We acquired a new, larger corporate headquarters to accommodate our business needs, which eliminated the need for two smaller support buildings. The two smaller support buildings had been acquired recently and were extensively remodeled, which resulted in a difference between book and market value for those assets. We sold one of the buildings in 2018. The remaining building was sold during the second quarter of 2019. |
▪ | State tax credits as a result of the purchase and improvement of our new corporate headquarters. We acquired a new, larger corporate headquarters to accommodate our business needs. Our purchase and improvement of the new headquarters resulted in state tax credits. |
The most directly comparable GAAP financial measure for non-GAAP core operating income (loss) is net income (loss).
• | We calculate "Non-GAAP core operating return on average assets" as non-GAAP core operating income (loss) (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 (loss) divided by average assets. |
• | We calculate ‘‘non-GAAP core operating return on average common equity’’ as non-GAAP core operating income (as defined above) less preferred dividends divided by average common equity. The most directly comparable GAAP financial measure is return on average common equity, which is calculated as net income less preferred dividends divided by average common equity. |
• | 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. |
• | 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. |
• | We calculate "non-GAAP core operating efficiency ratio - fully tax equivalent" as non-interest expense adjusted to remove non-recurring non-interest expenses as defined above under non-GAAP core operating income (loss) divided by net interest income on a fully tax-equivalent basis plus non-interest income adjusted to remove non-recurring non-interest income as defined above under non-GAAP core operating income. The most directly comparable financial measure is the efficiency ratio. |
15
CROSSFIRST BANKSHARES, INC.
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | 12/31/2018 | 12/31/2019 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP return on average tangible common equity: | |||||||||||||||||||||||||||
Net income (loss) available to common stockholders | $ | 9,809 | $ | 9,175 | $ | 9,439 | $ | 10,384 | $ | (700 | ) | $ | 17,490 | $ | 28,298 | ||||||||||||
Average common equity | 430,881 | 466,506 | 486,880 | 543,827 | 605,960 | 327,446 | 526,225 | ||||||||||||||||||||
Less: average goodwill and intangibles | 7,810 | 7,784 | 7,759 | 7,733 | 7,708 | 7,847 | 7,746 | ||||||||||||||||||||
Average tangible common equity | 423,071 | 458,722 | 479,121 | 536,094 | 598,252 | 319,599 | 518,479 | ||||||||||||||||||||
Return on average common equity | 9.03 | % | 7.98 | % | 7.78 | % | 7.58 | % | (0.46 | )% | 5.34 | % | 5.38 | % | |||||||||||||
Non-GAAP Return on average tangible common equity | 9.20 | % | 8.11 | % | 7.90 | % | 7.68 | % | (0.46 | )% | 5.47 | % | 5.46 | % | |||||||||||||
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | 12/31/2018 | 12/31/2019 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP core operating income (loss): | |||||||||||||||||||||||||||
Net Income (Loss) | $ | 10,334 | $ | 9,350 | $ | 9,439 | $ | 10,384 | $ | (700 | ) | $ | 19,590 | $ | 28,473 | ||||||||||||
Add: restructuring charges | (815 | ) | — | — | — | — | 4,733 | — | |||||||||||||||||||
Less: tax effect(1) | (210 | ) | — | — | — | — | 1,381 | — | |||||||||||||||||||
Restructuring charges, net of tax | (605 | ) | — | — | — | — | 3,352 | — | |||||||||||||||||||
Add: fixed asset impairments | — | — | 424 | — | — | 171 | 424 | ||||||||||||||||||||
Less: tax effect(1) | — | — | 109 | — | — | 44 | 109 | ||||||||||||||||||||
Fixed asset impairments, net of tax | — | — | 315 | — | — | 127 | 315 | ||||||||||||||||||||
Add: state tax credit(2) | (3,129 | ) | (1,361 | ) | — | — | — | (3,129 | ) | (1,361 | ) | ||||||||||||||||
Non-GAAP core operating income (loss) | $ | 6,600 | $ | 7,989 | $ | 9,754 | $ | 10,384 | $ | (700 | ) | $ | 19,940 | $ | 27,427 | ||||||||||||
(1) Represents the tax impact of the adjustments above at a tax rate of 25.73% | |||||||||||||||||||||||||||
(2) No tax effect | |||||||||||||||||||||||||||
Quarter Ended | Twelve Months Ended | |||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | 12/31/2018 | 12/31/2019 | ||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Non-GAAP core operating return on average assets: | ||||||||||||||||||||
Net income (loss) | 10,334 | 9,350 | 9,439 | 10,384 | (700 | ) | 19,590 | 28,473 | ||||||||||||
Non-GAAP core operating income (loss) | 6,600 | 7,989 | 9,754 | 10,384 | (700 | ) | 19,940 | 27,427 | ||||||||||||
Average assets | 3,884,642 | 4,168,243 | 4,402,002 | 4,610,958 | 4,809,579 | 3,494,655 | 4,499,764 | |||||||||||||
Return on average assets | 1.06 | % | 0.91 | % | 0.86 | % | 0.89 | % | (0.06 | )% | 0.56 | % | 0.63 | % | ||||||
Non-GAAP core operating return on average assets | 0.67 | % | 0.78 | % | 0.89 | % | 0.89 | % | (0.06 | )% | 0.57 | % | 0.61 | % | ||||||
16
CROSSFIRST BANKSHARES, INC.
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | 12/31/2018 | 12/31/2019 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP core operating return on common equity: | |||||||||||||||||||||||||||
Net income (loss) | $ | 10,334 | $ | 9,350 | $ | 9,439 | $ | 10,384 | $ | (700 | ) | $ | 19,590 | $ | 28,473 | ||||||||||||
Non-GAAP core operating income (loss) | 6,600 | 7,989 | 9,754 | 10,384 | (700 | ) | 19,940 | 27,427 | |||||||||||||||||||
Less: Preferred stock dividends | 525 | 175 | — | — | — | 2,100 | 175 | ||||||||||||||||||||
Net income (loss) available to common stockholders | 9,809 | 9,175 | 9,439 | 10,384 | (700 | ) | 17,490 | 28,298 | |||||||||||||||||||
Non-GAAP core operating income (loss) available to common stockholders | 6,075 | 7,814 | 9,754 | 10,384 | (700 | ) | 17,840 | 27,252 | |||||||||||||||||||
Average common equity | $ | 430,881 | $ | 466,506 | $ | 486,880 | $ | 543,827 | $ | 605,960 | $ | 327,446 | $ | 526,225 | |||||||||||||
GAAP return on average common equity | 9.03 | % | 7.98 | % | 7.78 | % | 7.58 | % | (0.46 | )% | 5.34 | % | 5.38 | % | |||||||||||||
Non-GAAP core operating return on common equity | 5.59 | % | 6.79 | % | 8.04 | % | 7.58 | % | (0.46 | )% | 5.45 | % | 5.18 | % | |||||||||||||
Quarter Ended | |||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | |||||||||||||||
(Dollars in thousands except per share data) | |||||||||||||||||||
Tangible common stockholders' equity: | |||||||||||||||||||
Total stockholders' equity | $ | 490,336 | $ | 480,514 | $ | 499,195 | $ | 602,435 | $ | 601,644 | |||||||||
Less: goodwill and other intangible assets | 7,796 | 7,770 | 7,745 | 7,720 | 7,694 | ||||||||||||||
Less: preferred stock | 30,000 | — | — | — | — | ||||||||||||||
Tangible common stockholders' equity | $ | 452,540 | $ | 472,744 | $ | 491,450 | $ | 594,715 | $ | 593,950 | |||||||||
Tangible book value per share: | |||||||||||||||||||
Tangible common stockholders' equity | $ | 452,540 | $ | 472,744 | $ | 491,450 | $ | 594,715 | $ | 593,950 | |||||||||
Shares outstanding at end of period | 45,074,322 | 45,202,370 | 45,367,641 | 51,969,203 | 51,969,203 | ||||||||||||||
Book value per share | $ | 10.21 | $ | 10.63 | $ | 11.00 | $ | 11.59 | $ | 11.58 | |||||||||
Tangible book value per share | $ | 10.04 | $ | 10.46 | $ | 10.83 | $ | 11.44 | $ | 11.43 | |||||||||
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||
12/31/2018 | 03/31/2019 | 06/30/2019 | 09/30/2019 | 12/31/2019 | 12/31/2018 | 12/31/2019 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP Core Operating Efficiency Ratio - Fully Tax Equivalent | |||||||||||||||||||||||||||
Non-interest expense | $ | 20,166 | $ | 22,631 | $ | 21,960 | $ | 21,172 | $ | 21,885 | $ | 85,755 | $ | 87,648 | |||||||||||||
Less: restructuring charge | $ | (815 | ) | $ | — | $ | — | $ | — | $ | — | $ | 4,733 | $ | — | ||||||||||||
Non-GAAP non-interest expense (numerator) | 20,981 | 22,631 | 21,960 | 21,172 | $ | 21,885 | $ | 81,022 | $ | 87,648 | |||||||||||||||||
Net interest income | 32,315 | 33,605 | 34,874 | 35,786 | 37,179 | 110,368 | 141,444 | ||||||||||||||||||||
Tax equivalent interest income | 658 | 616 | 612 | 624 | 670 | 3,099 | 2,522 | ||||||||||||||||||||
Non-interest income | 1,195 | 1,645 | 1,672 | 3,212 | 2,186 | 6,083 | 8,715 | ||||||||||||||||||||
Add: fixed asset impairments | $ | — | $ | — | $ | 424 | $ | — | $ | — | $ | 171 | $ | 424 | |||||||||||||
Total tax-equivalent income (denominator) | $ | 34,168 | $ | 35,866 | $ | 37,582 | $ | 39,622 | $ | 40,035 | $ | 119,721 | $ | 153,105 | |||||||||||||
Efficiency Ratio | 60.18 | % | 64.20 | % | 60.09 | % | 54.29 | % | 55.60 | % | 73.64 | % | 58.37 | % | |||||||||||||
Non-GAAP Core Operating Efficiency Ratio - Fully Tax Equivalent | 61.41 | % | 63.10 | % | 58.43 | % | 53.43 | % | 54.66 | % | 67.68 | % | 57.25 | % | |||||||||||||
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