Financial Data and Key Metrics Changes - The company reported a record net income of $12 million for Q1 2021, resulting in earnings per share of $0.23, despite a provision of $7.5 million [7][23] - Operating revenue increased by 12% year-over-year to $45.3 million, with a 2% increase compared to the previous quarter [24] - The efficiency ratio improved to 50.4%, down from 55.1% in Q1 2020 and 58.1% for the entire 2020 year [30] Business Line Data and Key Metrics Changes - The loan portfolio, excluding PPP loans, grew by 4% compared to Q1 2020 and 1% from the previous quarter [8] - Non-interest income for the quarter was $4.1 million, a 41% increase from the previous quarter, with credit card fees being the largest contributor [24] - Non-interest expenses decreased to $22.8 million, reflecting efficiencies achieved from staff reductions made in Q3 2020 [29] Market Data and Key Metrics Changes - The company experienced strong deposit growth of 8%, with DDA accounts growing by 11% [8] - The allowance for loan and lease losses to total loans ended Q1 at 1.79%, excluding PPP loans [34] - Non-performing assets decreased by 12% during Q1 to $68.9 million, or 1.15% of total assets [35] Company Strategy and Development Direction - The company is focused on improving earnings, reducing risk, and enhancing credit metrics post-pandemic [5] - A strategic emphasis is placed on technology investments to remain competitive in the banking landscape [16] - The company plans to continue evaluating new market expansions and potential acquisitions to supplement growth [21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic outlook, anticipating improvements as vaccinations roll out and fiscal stimulus fuels growth [19] - The company expects loan provisioning to moderate through the remainder of 2021 based on current loan portfolio trends [9] - Management highlighted the importance of attracting and retaining high-quality talent as a strategic focus [11] Other Important Information - The company is undergoing a leadership transition with the planned retirement of the CFO, who will remain until a successor is identified [11][12] - The company has executed a stock repurchase plan, repurchasing 88,497 shares at an average price of $11.86 [31] Q&A Session Summary Question: Loan demand and competition outlook - Management noted a pickup in loan demand and a competitive environment for high-quality credit, particularly in real estate and commercial sectors [40] Question: Expectations for net charge-off levels - Management expects charge-off levels to normalize below 30 basis points, following unique charge-off activity in specific portfolio areas [46] Question: Cost of deposits and margin protection - Management indicated potential for further reductions in the cost of funds, estimating a 5 to 10 basis point reduction in the upcoming quarter [48] Question: Future loan growth expectations - Management anticipates a loan growth rate of 10% to 15% in a normal environment, with hopes for market expansion [50] Question: Fee income growth sustainability - Management expects continued solid growth in fee income, although some recent increases were attributed to specific customer activity related to pandemic services [55] Question: Operating expenses outlook - Management indicated that a run rate of $23 million to $24 million for operating expenses is reasonable, with potential investments impacting future expenses [56]

Part I [Business](index=5&type=section&id=Item%201.%20Business) CrossFirst Bankshares, Inc. operates as a bank holding company providing financial services across four states, focusing on strategic growth while navigating the COVID-19 pandemic and extensive banking regulations [Our Company & 2020 Developments](index=5&type=section&id=Our%20Company%20%26%202020%20Developments) The company pursued organic growth and strategic acquisitions in 2020, navigating the pandemic by originating **$369 million** in PPP loans and initiating a **$20 million** stock buyback - The company's strategic plan includes continuing organic growth, pursuing selective acquisitions, improving profitability, attracting talent, maintaining a branch-lite model, and leveraging technology[14](index=14&type=chunk) - In response to the COVID-19 pandemic, the company participated in the Paycheck Protection Program (PPP), providing **$369 million** in loans to support customers[16](index=16&type=chunk) - A CEO succession plan was executed, with Michael J. Maddox becoming CEO effective June 1, 2020[17](index=17&type=chunk) - Strategic decisions were made to reduce exposure to the energy sector and tribal nation lending, with these portfolios expected to decline in 2021[18](index=18&type=chunk) - A **$20 million** common stock buyback program was announced in Q4 2020, with approximately **$6 million** (609,613 shares) repurchased by year-end[19](index=19&type=chunk) [Products, Services, and Competition](index=6&type=section&id=Products%2C%20Services%2C%20and%20Competition) The Bank provides diverse lending and deposit services to commercial and affluent clients, facing intense competition from various financial institutions - The Bank's primary loan categories are commercial loans, commercial real estate, construction and development, 1-4 family real estate, energy, and consumer loans[22](index=22&type=chunk) - Deposit products include personal and business checking/savings accounts, treasury management, money market accounts, and mobile banking[23](index=23&type=chunk) - The company competes with a wide range of financial institutions, including commercial banks, credit unions, mortgage companies, and Fintech companies, some of which are not subject to the same level of regulatory supervision[24](index=24&type=chunk) [Human Capital Resources](index=6&type=section&id=Human%20Capital%20Resources) The company employed **328** full-time staff in 2020, focusing on competitive compensation, diversity, community involvement, and talent development, with **15%** of employees promoted - As of year-end 2020, the company employed **328** full-time equivalent staff, with a workforce composition of **58%** female and **42%** male[25](index=25&type=chunk) - The company fosters community involvement through a Volunteer Time Off (VTO) program and a Generous Giving program that matches employee donations up to **$500** per year[30](index=30&type=chunk)[31](index=31&type=chunk) - In 2020, over **15%** of employees were promoted into roles with increased responsibilities, reflecting a focus on internal talent development supplemented by external hiring[36](index=36&type=chunk) [Supervision and Regulation](index=7&type=section&id=Supervision%20and%20Regulation) The company and its bank subsidiary are extensively regulated by federal and state agencies, adhering to Basel III capital rules, Prompt Corrective Action frameworks, and various consumer protection and AML laws Basel III Minimum Capital Ratios | Capital Ratio | Minimum for Adequacy | Additional Conservation Buffer | Total with Buffer | | :--- | :--- | :--- | :--- | | Total risk based capital | 8.00% | 2.50% | 10.50% | | Tier 1 risk based capital | 6.00% | 2.50% | 8.50% | | Common equity tier 1 risk based capital | 4.50% | 2.50% | 7.00% | | Tier 1 leverage ratio | 4.00% | — | 4.00% | - As of December 31, 2020, both the Company and the Bank's capital ratios exceeded the minimum requirements under the Basel III Capital Rules[47](index=47&type=chunk) - To be considered "well-capitalized" under Prompt Corrective Action regulations, a bank must maintain a CET1 ratio of at least **6.5%**, a Tier 1 risk-based ratio of at least **8%**, a total risk-based ratio of at least **10%**, and a leverage ratio of at least **5%** As of December 31, 2020, the Bank met these requirements[50](index=50&type=chunk) - The Bank's legal lending limit to any single borrower was **$156 million** as of December 31, 2020, based on Kansas state law which generally limits loans to **25%** of the bank's capital[77](index=77&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, regulatory, and common stock risks, including COVID-19 impacts, interest rate sensitivity, credit concentrations, cybersecurity threats, and extensive government oversight [Risks Relating to Our Business and Market](index=15&type=section&id=Risks%20Relating%20to%20Our%20Business%20and%20Market) The company's business faces market risks from the COVID-19 pandemic, interest rate sensitivity, credit concentrations in energy and commercial real estate, and operational risks like cybersecurity threats - The COVID-19 pandemic has adversely affected business, financial condition, and results of operations, with ultimate impacts remaining highly uncertain[95](index=95&type=chunk) - Profitability is substantially dependent on net interest income and is adversely affected by changes in market interest rates, which can compress margins and increase default risk[109](index=109&type=chunk) - The company has significant credit exposure to the energy industry and concentrations in commercial real estate (CRE), which could lead to increased credit stress and potential regulatory restrictions[127](index=127&type=chunk)[128](index=128&type=chunk) - As of December 31, 2020, the 25 largest borrowing relationships totaled approximately **$1 billion** in commitments, representing **22%** of total outstanding commitments, posing a concentration risk[135](index=135&type=chunk) - The company faces cybersecurity risks and potential security breaches, which could lead to increased costs, reputational harm, and liability exposure[180](index=180&type=chunk) [Risks Relating to Our Regulatory Environment](index=29&type=section&id=Risks%20Relating%20to%20Our%20Regulatory%20Environment) Operating in a highly regulated environment, the company faces risks from changing banking laws, stringent capital requirements, increased insurance premiums, and noncompliance with BSA/AML and consumer protection laws - The company is subject to extensive regulation from agencies like the FDIC, OSBCK, and the Federal Reserve, which increases compliance costs and can limit activities[209](index=209&type=chunk)[210](index=210&type=chunk) - Failure to meet minimum capital requirements can trigger mandatory regulatory actions, including restrictions on dividends, growth, and other operations[222](index=222&type=chunk) - Noncompliance with the Bank Secrecy Act (BSA) and other anti-money laundering (AML) statutes can result in significant civil money penalties and reputational harm[229](index=229&type=chunk)[230](index=230&type=chunk) - Failure to comply with consumer protection laws, including the Community Reinvestment Act (CRA) and fair lending laws, could lead to sanctions, restrictions on M&A activity, and private litigation[236](index=236&type=chunk)[237](index=237&type=chunk) [Risks Related to Our Common Stock](index=33&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) Common stock investors face risks from price volatility, anti-takeover provisions, potential dilution from future equity issuances, and dividend limitations due to regulatory restrictions - The market price of the common stock may be volatile due to factors such as variations in operating results, analyst recommendations, and general market conditions[238](index=238&type=chunk) - Kansas law, the company's articles of incorporation, and federal regulations on changes of control may have an anti-takeover effect, potentially preventing transactions that could offer a premium to stockholders[239](index=239&type=chunk) - The company's ability to pay dividends is not guaranteed and is subject to the Board of Directors' discretion, financial condition, and regulatory policies from the Federal Reserve[244](index=244&type=chunk) - As a holding company, its primary source of cash is dividends from the Bank, which are subject to regulatory limitations[246](index=246&type=chunk)[247](index=247&type=chunk) [Unresolved Staff Comments](index=34&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[248](index=248&type=chunk) [Properties](index=34&type=section&id=Item%202.%20Properties) The company operates eight banking centers across four states, owning its headquarters and two centers while leasing the others - The company operates eight full-service banking centers in Kansas, Missouri, Oklahoma, and Texas[249](index=249&type=chunk) - The headquarters building in Leawood, Kansas, and the banking centers in Wichita, Kansas, and Oklahoma City, Oklahoma are owned by the company, while the other locations are leased[249](index=249&type=chunk) [Legal Proceedings](index=34&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, none of which are expected to have a material adverse effect on its business or financial condition - Management does not expect any current legal proceedings to have a material adverse effect on the company's business, financial condition, or results of operations[250](index=250&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[252](index=252&type=chunk) [Information About Our Executive Officers](index=35&type=section&id=Information%20About%20Our%20Executive%20Officers) This section lists the company's executive officers as of March 1, 2021, providing their positions and brief professional biographies - Mike Maddox transitioned to the role of President and CEO of the Company on June 1, 2020[253](index=253&type=chunk) - George F. Jones, Jr. transitioned from President and CEO to Vice Chairman of the Company on June 1, 2020[255](index=255&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "CFB", has not paid dividends, and initiated a **$20 million** share repurchase program in Q4 2020 - The company's common stock is traded on the Nasdaq Global Select Market under the symbol "CFB"[263](index=263&type=chunk) - The company has not declared or paid any cash dividends on its common stock and does not anticipate paying any in the foreseeable future, retaining earnings to support operations and growth[268](index=268&type=chunk) Q4 2020 Share Repurchase Summary | Calendar Month | Total Shares Repurchased | Average Price Paid per Share | Approx. Value Remaining ($) | | :--- | :--- | :--- | :--- | | October 1 - 31 | — | — | 20,000,000 | | November 1 - 30 | 243,558 | $9.60 | 17,660,926 | | December 1 - 31 | 366,055 | $10.12 | 13,957,308 | | **Total** | **609,613** | **$9.91** | **13,957,308** | [Selected Financial Data](index=39&type=section&id=Item%206.%20Selected%20Financial%20Data) This section summarizes five years of financial data, highlighting total asset growth to **$5.7 billion** in 2020 and a decrease in net income to **$12.4 million** Selected Financial Data (2018-2020) | (In thousands, except per share data) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net interest income | $160,249 | $141,444 | $110,368 | | Net income | $12,601 | $28,473 | $19,590 | | Net income available to common stockholders | $12,426 | $28,298 | $17,490 | | Total assets | $5,659,303 | $4,931,233 | $4,107,215 | | Diluted earnings per share | $0.24 | $0.58 | $0.47 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company achieved significant asset and deposit growth in 2020, navigating the pandemic with PPP loans and modifications, while net income decreased due to a **$56.7 million** provision for loan losses [Overview, Strategy, and Performance](index=39&type=section&id=Overview%2C%20Strategy%2C%20and%20Performance) The company achieved strong growth from 2016-2020, with assets reaching **$5.7 billion** and deposits **$4.7 billion**, driven by organic growth and strategic initiatives Growth History (2016-2020 CAGR) | Metric | 2016-2020 CAGR | 2020 Balance ($ thousands) | 2019 Balance ($ thousands) | | :--- | :--- | :--- | :--- | | Gross loans | 36% | $4,441,897 | $3,852,244 | | Total assets | 28% | $5,659,303 | $4,931,233 | | Total deposits | 29% | $4,694,740 | $3,923,759 | Key Performance Ratios (2020 vs. 2019) | Ratio | 2020 | 2019 | | :--- | :--- | :--- | | Return on average assets | 0.24% | 0.63% | | Return on average equity | 2.05% | 5.38% | | Diluted earnings per share | $0.24 | $0.58 | | Efficiency ratio | 58.13% | 58.37% | - 2020 highlights include total assets reaching **$5.7 billion**, **15%** loan growth, **20%** deposit growth, and the issuance of **$369 million** in PPP loans[285](index=285&type=chunk) [COVID-19 Pandemic Impact](index=40&type=section&id=COVID-19%20Pandemic%20Impact) The pandemic significantly impacted 2020 operations, leading to **$369 million** in PPP loans, **$89.8 million** in loan modifications, and a **$7 million** goodwill impairment charge 2020 PPP Loan Summary | Metric | Amount ($ thousands) | | :--- | :--- | | Outstanding Balance (12/31/20) | $292,230 | | Total Origination Fees | $9,946 | | Earned Fees in 2020 | $5,757 | | Unearned Fees (12/31/20) | $4,189 | - As of December 31, 2020, the company had 17 loans with a total value of **$89.8 million** under COVID-19 related modifications, primarily consisting of payment deferrals and reduced payments[297](index=297&type=chunk) - Loan portfolio sectors receiving increased monitoring due to the pandemic include Retail, Hotel & Lodging, and Medical & Senior Living in real estate, and Recreation, Restaurants, and Aviation in commercial loans[301](index=301&type=chunk)[304](index=304&type=chunk) - A goodwill impairment analysis in Q2 2020 resulted in a **$7 million** impairment charge, representing the total value of goodwill, attributed to the economic impact of the pandemic[305](index=305&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Net interest income increased to **$160.2 million** in 2020 despite margin compression, while noninterest income rose **35%** and noninterest expense increased **14%** due to a goodwill impairment Net Interest Margin Analysis (2019 vs 2020) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Yield on earning assets (tax-equivalent) | 3.96% | 5.04% | | Cost of funds | 0.92% | 1.90% | | Net interest margin (tax-equivalent) | 3.13% | 3.31% | - Net interest income increased by **$19.0 million** (tax-equivalent) in 2020 compared to 2019 This was driven by a **$35.4 million** positive impact from volume growth, partially offset by a **$16.4 million** negative impact from lower rates[315](index=315&type=chunk) - Total noninterest income increased by **$3.0 million** (**35%**) in 2020, primarily due to higher service charges, ATM/credit card interchange income, and gains on sale of securities[322](index=322&type=chunk) - Total noninterest expense increased by **$12.3 million** (**14%**) in 2020, driven by a **$7.4 million** goodwill impairment charge, a **$1.5 million** increase in deposit insurance premiums, and a **$1.3 million** rise in professional fees[330](index=330&type=chunk) [Financial Condition](index=51&type=section&id=Financial%20Condition) Total assets grew to **$5.7 billion** in 2020, with gross loans increasing to **$4.4 billion** and deposits to **$4.7 billion**, while nonperforming assets rose to **$78.4 million** - Gross loans grew by **$590 million** to over **$4.4 billion** in 2020 Excluding **$292 million** in PPP loans, the portfolio grew by **$301 million** or **8%**[343](index=343&type=chunk)[344](index=344&type=chunk) Allowance for Loan Losses (ALLL) Activity | (In thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Beginning balance | $56,896 | $37,826 | | Provision for loan losses | $56,700 | $29,900 | | Net charge-offs | ($38,301) | ($10,830) | | **Ending balance** | **$75,295** | **$56,896** | Nonperforming Assets (NPA) | (In thousands) | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Nonperforming loans | $76,075 | $44,266 | | Foreclosed assets | $2,347 | $3,619 | | **Total NPAs** | **$78,422** | **$47,885** | | NPAs to Total Assets | 1.39% | 0.97% | - Total deposits grew by **$771 million** (**20%**) in 2020, driven by a **$516 million** increase in Insured Cash Sweep (ICS) deposits[398](index=398&type=chunk) - The company and the Bank remained well-capitalized, with consolidated capital ratios for Total Capital, Tier 1 Capital, and CET1 at **13.1%**, **11.8%**, and **11.8%** respectively, all exceeding regulatory minimums[663](index=663&type=chunk) [Off-Balance Sheet Arrangements and Contractual Obligations](index=65&type=section&id=Off-Balance%20Sheet%20Arrangements%20and%20Contractual%20Obligations) The company utilizes off-balance sheet arrangements, with total commitments reaching **$1.57 billion** as of December 31, 2020, primarily comprising lines of credit Off-Balance Sheet Commitments | (In thousands) | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Commitments to fund commercial loans | $714,315 | $602,456 | | Other loan commitments | $808,319 | $884,069 | | Standby letters of credit | $48,607 | $39,035 | | **Total** | **$1,571,241** | **$1,546,495** | [Market Risk and Interest Rate Sensitivity](index=66&type=section&id=Market%20Risk%20and%20Interest%20Rate%20Sensitivity) The company manages interest rate risk through various analyses, with simulations indicating potential initial net interest income decrease in a **+100 basis point** rate shock but increases in higher rate scenarios - The company manages interest rate risk using a combination of gap reports, earnings simulations, and Economic Value of Equity (EVE) analysis[438](index=438&type=chunk) Interest Rate Shock Simulation (as of Dec 31, 2020) | Change in Interest Rate (bps) | % Change in Net Interest Income (12-month) | % Change in Fair Value of Equity | | :--- | :--- | :--- | | +300 | 1.2% | (10.3)% | | +200 | 0.4% | (6.2)% | | +100 | (0.3)% | (2.8)% | | -100 | NA | NA | [Selected Quarterly Financial Data](index=69&type=section&id=Selected%20Quarterly%20Financial%20Data) This section presents unaudited quarterly financial data, showing **$8.1 million** net income for Q4 2020, an improvement from a **$0.7 million** net loss in Q4 2019 Q4 2020 vs Q4 2019 Performance | (In thousands) | Q4 2020 | Q4 2019 | | :--- | :--- | :--- | | Net Interest Income | $41,537 | $37,179 | | Provision for loan losses | $10,875 | $19,350 | | Net income (loss) | $8,094 | ($700) | [Critical Accounting Policies and Estimates](index=70&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies involve significant management judgment for the Allowance for Loan Losses, Deferred Tax Assets, and Fair Value of Financial Instruments - The determination of the Allowance for Loan Losses (ALLL) is a critical accounting estimate that requires management to make assumptions and judgments regarding future uncollectible amounts in the loan portfolio[470](index=470&type=chunk) - The valuation of the Deferred Tax Asset involves significant judgment in evaluating the amount and timing of recognition, and any reduction in estimated future taxable income could require a valuation allowance[472](index=472&type=chunk) - Determining the fair value of financial instruments, especially when observable market prices are not available (Level 3), requires management judgment and is dependent on assumptions about discount rates and future cash flows[472](index=472&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=73&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section incorporates market risk disclosures by reference from the "Interest Rate Sensitivity" section within Item 7 - The information required for this item is incorporated by reference from the "Interest Rate Sensitivity" section in the MD&A[476](index=476&type=chunk) [Financial Statements and Supplementary Data](index=74&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for the three years ended December 31, 2020, including balance sheets, income statements, and comprehensive notes [Consolidated Financial Statements](index=75&type=section&id=Consolidated%20Financial%20Statements) The audited consolidated financial statements for 2020 show total assets of **$5.66 billion**, total liabilities of **$5.03 billion**, and net income of **$12.6 million** Consolidated Balance Sheet Highlights (as of Dec 31) | (In thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Total Assets | $5,659,303 | $4,931,233 | | Loans, net of allowance | $4,366,602 | $3,795,348 | | Total Deposits | $4,694,740 | $3,923,759 | | Total Liabilities | $5,034,875 | $4,329,589 | | Total Stockholders' Equity | $624,428 | $601,644 | Consolidated Income Statement Highlights (Year Ended Dec 31) | (In thousands) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net Interest Income | $160,249 | $141,444 | $110,368 | | Provision for Loan Losses | $56,700 | $29,900 | $13,500 | | Net Income | $12,601 | $28,473 | $19,590 | [Notes to Consolidated Financial Statements](index=81&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, loan portfolio, goodwill impairment, regulatory capital, stock-based compensation, fair value measurements, and COVID-19 impacts - The company's operating segments are aggregated into one reportable segment as operations are managed and financial performance is evaluated on a company-wide basis[505](index=505&type=chunk) - A goodwill impairment test as of June 30, 2020, resulted in a full impairment charge of **$7 million**, primarily due to economic conditions from the COVID-19 pandemic and oil market volatility[628](index=628&type=chunk) - The company is a member of the CDARS network, which allows depositors to receive FDIC insurance on amounts greater than the standard limit CDARS deposits totaled approximately **$75 million** as of December 31, 2020[643](index=643&type=chunk) - The company redeemed all of its **$30 million** Series A Preferred Stock on January 30, 2019[728](index=728&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=124&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[736](index=736&type=chunk) [Controls and Procedures](index=124&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2020, with no material changes in Q4 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[736](index=736&type=chunk) - Based on an assessment using the COSO 2013 framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2020[740](index=740&type=chunk) [Other Information](index=125&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[742](index=742&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=125&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2021 proxy statement - Required information for this item is incorporated by reference from the registrant's definitive proxy statement for its 2021 annual meeting of stockholders[743](index=743&type=chunk) [Executive Compensation](index=125&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive and director compensation is incorporated by reference from the 2021 proxy statement and Note 16 - Required information for this item is incorporated by reference from the registrant's definitive proxy statement for its 2021 annual meeting of stockholders[744](index=744&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=125&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference, with **1,703,175** securities issuable under equity plans at a **$10.35** weighted-average exercise price Securities Authorized for Issuance under Equity Compensation Plans (as of Dec 31, 2020) | Plan Category | Securities to be Issued Upon Exercise (A) | Weighted-Average Exercise Price (B) | Securities Remaining for Future Issuance (C) | | :--- | :--- | :--- | :--- | | Equity compensation plans not approved by shareholders | 1,703,175 | $10.35 | 2,202,166 | [Certain Relationships and Related Transactions and Director Independence](index=126&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information on related person transactions and director independence is incorporated by reference from the 2021 proxy statement - Required information for this item is incorporated by reference from the registrant's definitive proxy statement for its 2021 annual meeting of stockholders[747](index=747&type=chunk) [Principal Accountant Fees and Services](index=126&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 2021 proxy statement - Required information for this item is incorporated by reference from the registrant's definitive proxy statement for its 2021 annual meeting of stockholders[748](index=748&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=126&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including those incorporated by reference - This section provides a list of all financial statements and exhibits filed with the Form 10-K, including those incorporated by reference[749](index=749&type=chunk)[752](index=752&type=chunk) [Form 10-K Summary](index=128&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[755](index=755&type=chunk)

CROSSFIRST BANKSHARES, INC. NASDAQ: CFB | January 28th, 2021 Q4 AND FULL YEAR 2020 EARNINGS PRESENTATION LEGAL DISCLAIMER FORWARD-LOOKING STATEMENTS. The financial results in this presentation reflect preliminary, unaudited results, which are not final until the Company's Annual Report on Form 10-K is filed. This presentation and oral statements made during this meeting contain forward-looking statements. These forwardlooking statements reflect our current views with respect to, among other things, future e ...

Financial Data and Key Metrics Changes - The company reported net income of $8.1 million for Q4 2020, with earnings per share of $0.15, capping off the full year with net income of $12.6 million and earnings per share of $0.24 [18] - Total assets surpassed $5 billion, and total loans reached $4 billion, with significant growth in deposits, which increased by 20% year-over-year [16][23] - The efficiency ratio improved to 53.4%, a 2.2% improvement compared to Q4 2019 [25] Business Line Data and Key Metrics Changes - Net interest income for Q4 improved by 6% on a linked-quarter basis to $41.5 million, and 12% higher than Q4 2019 [28] - Non-interest income increased by 35% year-over-year to $11.7 million [37] - The company added $56.7 million to loan loss reserves for the year, impacting bottom line performance metrics [17] Market Data and Key Metrics Changes - The company experienced a year-over-year loan growth of 8% excluding PPP loans, with a strong loan pipeline entering 2021 [23] - The energy portfolio concentration decreased from 12% in 2018 to 8% of total loans, with a long-term target of closer to 5% [52] Company Strategy and Development Direction - The company remains committed to a branch-light business model and a technology-forward approach to enhance efficiency [11] - Plans to continue investing in talent and technology to support organic growth and improve profitability [26][67] - The focus on managing expenses and growing non-interest income will remain a priority [45] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic recovery and the impact of government stimulus on growth [66] - The company anticipates that net charge-offs will decrease significantly in 2021, although remaining above historical levels [61] - The outlook for pre-provision profitability remains favorable, with sufficient capital to absorb potential loan loss provisioning [36] Other Important Information - The company successfully executed a share repurchase plan, buying over 600,000 shares for $6.1 million [20] - The loan modification program has seen a significant reduction, with only 2% of the loan portfolio needing assistance by year-end 2020 [47] Q&A Session Summary Question: What level do you think your net charge-offs might be in 2021? - Management expects net charge-offs to come down significantly in 2021, remaining above historical levels but well below 2020 levels [61] Question: Can you discuss the stability of NPAs? - NPAs remained relatively stable, with slight movements across portfolios, including some upgrades and pay downs [63] Question: What is the outlook for growth in the banking sector? - Management is committed to organic growth and believes the company will outperform peers, although the timing of returning to double-digit growth is uncertain [68] Question: What is the expected growth rate for expenses in 2021? - The company anticipates a 6% to 8% growth in expenses for 2021 [70] Question: Can you provide insights on loan growth and utilization rates? - The company believes it can grow its core loan portfolio enough to offset PPP pay downs [93]

Financial Performance - Total assets reached $5.5 billion, a 12% increase from December 31, 2019[140] - Loan growth of $64 million from the previous quarter and $854 million or 23% over the last twelve months[140] - Deposit growth of $188 million from the previous quarter and $834 million or 23% over the last twelve months[140] - Efficiency ratio improved to 53% for Q3 2020 due to optimized staffing and controlled spending[140] - Book value per share increased to $11.84 at September 30, 2020, compared to $11.59 at the same date in 2019[140] - Net interest income for 2020 was $39,996 thousand, an increase from $36,409 thousand in 2019, reflecting a growth of approximately 7%[154] - Total assets increased to $5,486,252 thousand in 2020 from $4,610,958 thousand in 2019, representing a growth of about 19%[154] - Gross loans, net of unearned income, rose to $4,477,211 thousand in 2020, up from $3,540,707 thousand in 2019, indicating an increase of approximately 27%[154] - Total interest-earning assets for 2020 were $5,341,940 thousand, compared to $4,456,624 thousand in 2019, marking an increase of approximately 20%[154] - Total non-interest income for the three months ended September 30, 2020, was $4,063,000, a 26% increase compared to $3,212,000 for the same period in 2019[166] Loan and Deposit Activity - The company’s gross loans increased by $631 million or 16% from December 31, 2019, driven primarily by PPP loans, which represented 58% of the net loan growth[181] - The residential real estate loan portfolio saw a $219 million or 55% increase, attributed to new loan funding of approximately $113 million and strengthened relationships with key developers[182] - The commercial real estate portfolio increased by $172 million or 17%, with significant activity in the Dallas and Kansas City markets[183] - Deposits totaled $4 billion, an increase of $569 million or 14% from December 31, 2019, driven by noninterest-bearing deposits from PPP loans[205] Asset Quality and Loan Losses - Total loan modifications due to COVID-19 amounted to $317.7 million, representing 7% of gross loans[145] - The allowance for loan losses increased to $75,970 thousand in 2020 from $43,327 thousand in 2019, representing a rise of approximately 76%[154] - Nonperforming assets include non-accrual loans, loans past due 90 days or more, and foreclosed assets, impacting overall asset quality metrics[195] - Nonaccrual loans increased by $38 million during the quarter ended September 30, 2020, primarily due to a commercial loan restructuring and loans impacted by the COVID-19 pandemic and low oil prices[196] - Total nonperforming loans reached $79.884 million as of September 30, 2020, compared to $37.754 million on June 30, 2020[198] Interest Rate and Funding - The net interest margin decreased to 2.98% in 2020 from 3.24% in 2019, showing a decline of about 8%[154] - The average yield on gross loans was 3.90% in 2020, down from 5.53% in 2019, reflecting a decrease of about 29%[154] - The cost of funds for 2020 was $9,125 thousand, compared to $19,743 thousand in 2019, indicating a decrease of about 54%[154] - The company anticipates net interest margin to improve to around 3.05% during the fourth quarter of 2020 if nonaccrual loans are maintained and cost of funds is reduced[163] - The company expects the cost of funds to remain flat or slightly decline in the fourth quarter of 2020 as time deposits and other borrowings mature[162] Non-Interest Income and Expenses - Service charges and fees on customer accounts increased by 1,000% for the three months ended September 30, 2020, compared to the same period in 2019, reaching $792,000[166] - Gain on sale of available-for-sale debt securities increased to $1,012,000 for the three months ended September 30, 2020, compared to $34,000 for the same period in 2019, reflecting a 2,876% increase[167] - Total non-interest expense for the three months ended September 30, 2020, was $23,011,000, a 9% increase compared to $21,172,000 for the same period in 2019[172] - Professional fees increased by 165% for the three months ended September 30, 2020, reaching $1,132,000, compared to $427,000 for the same period in 2019[172] - Salary and employee benefits increased by 3% for the three months ended September 30, 2020, totaling $14,628,000, compared to $14,256,000 for the same period in 2019[172] Strategic Initiatives and Market Conditions - The Company opened its second full-service bank in the Dallas metropolitan area[140] - A $20 million common stock buyback program was announced[140] - The company performed a goodwill impairment review resulting in a $7 million impairment for the Tulsa market reporting unit[177] - The company expects further declines in the energy portfolio, which decreased by $24 million or 6% from December 31, 2019, as part of a strategy to reduce oil and gas loan concentrations[183] - The Company had approximately $39 million of potential problem loans as of September 30, 2020, which may result in disclosure as impaired loans next quarter[204] Risk Management - Interest rate risk management is crucial for the Company, with the objective to maximize income while minimizing interest rate risk[221] - The Funds Management Committee (FMC) utilizes gap reports, earnings simulation, and economic value of equity to measure interest rate risk[222] - A hypothetical +100 basis point shock as of September 30, 2020 would result in a 0.3% increase in net interest income, primarily due to 70% of earning assets repricing or maturing within the next 12 months[228] - The mix of adjustable loans or loans maturing in one year or less to total loans was 71%, contributing to the increase in net interest income in a rising rate environment[228] - The Company excluded the down rate environment from its analysis for the period ended September 30, 2020, due to the already low interest rate environment[223]

CROSSFIRST BANKSHARES, INC. NASDAQ: CFB | October 20th, 2020 Q3 2020 EARNINGS PRESENTATION LEGAL DISCLAIMER FORWARD-LOOKING STATEMENTS. The financial results in this presentation reflect preliminary, unaudited results, which are not final until the Company's Quarterly Report on Form 10-Q is filed. This presentation and oral statements made during this meeting contain forward-looking statements. These forwardlooking statements reflect our current views with respect to, among other things, future events and o ...

Financial Data and Key Metrics Changes - The bank reported net income of $8 million or $0.15 per share for the quarter, with record pre-tax, pre-provision profits despite the pandemic [12][33] - Net interest income declined 4% on a linked quarter basis to $39.3 million, but was 10% above the third quarter of 2019 [24] - The net interest margin (NIM) decreased by 21 basis points from 3.19% to 2.98% during the quarter [24] - Non-interest income increased by 54% on a linked quarter basis and 26% year-over-year, driven by credit card fees, service charges, and securities gains [34] Business Line Data and Key Metrics Changes - Loan and deposit growth year-over-year was 23%, with quarter-over-quarter loans growing conservatively at 1.6% excluding PPP loans [13] - Overall deposits grew by 4.4% from the previous quarter, including robust demand deposit growth year-to-date [13] - Non-interest expenses were relatively flat on a linked quarter basis, with a reduction in headcount from 364 to 332 employees [35] Market Data and Key Metrics Changes - The Midwest and Southwest markets served by the bank have unemployment rates lower than the national average, with steady economic improvement [10] - The bank continues to hold approximately $369 million of PPP loans, with a significant portion expected to be forgiven in the first half of 2021 [21] Company Strategy and Development Direction - The company is focusing on fee income generating opportunities to diversify revenue and alleviate margin pressure [14] - A share repurchase program of up to $20 million was approved, reflecting confidence in the company's strength and direction [11] - The bank opened two new strategic locations in Dallas and Kansas City to expand its presence in fast-growing markets [16] Management's Comments on Operating Environment and Future Outlook - Management expressed pride in the bank's performance amidst a challenging macroeconomic climate and emphasized the importance of operational efficiencies [7][8] - The bank plans to continue building reserves throughout 2020 to strengthen its balance sheet for a stronger 2021 [8][49] - Management remains cautious in assessing and underwriting new credits while actively engaging with customers [19] Other Important Information - The bank's efficiency ratios were reported at 59% year-to-date and 53% for the quarter, despite non-recurring charges impacting these ratios [36] - The bank's criticized and classified loan total at the end of the quarter was $477 million, with classified loans at approximately $300 million [75] Q&A Session Summary Question: Can you provide more color on the $6 million of net charge-offs? - The charge-offs included several loans in the energy space and a couple in the C&I portfolio, with no systemic issues identified [53][54] Question: What contributed to the increase in non-performing assets (NPA)? - The increase was primarily due to one energy transaction and a restructured C&I loan, but NPAs decreased post-restructure [55][56] Question: What are the expectations for the buyback program? - The company aims to be prudent with the buyback, evaluating market conditions while maintaining a strong capital position [57][58] Question: Are there more cost management levers available for 2021? - The company has optimized staffing levels and expects cost reductions to positively impact 2021 [59] Question: What areas are seeing loan growth opportunities? - Loan growth is primarily coming from Texas and Kansas City, particularly in industrial and Class A multifamily real estate [61][62] Question: What are the expected trends for card fees? - Increased activity in the healthcare sector has driven card fees up, and this trend may continue in the near term [63][64] Question: What are the criticized and classified loan balances at the end of the quarter? - Criticized and classified loan totals were $477 million and approximately $300 million, respectively [75] Question: When do you expect reserve levels to peak? - Reserve levels are expected to peak at the end of the year, close to the 2% mark [76]

Financial Performance - CrossFirst Bankshares reported a net loss of $3.5 million YTD 2020, compared to a net income of $18.8 million in 2019, impacted by COVID-19 provisioning[8, 23] - Pre-tax, pre-provision net income (PTPP) reached $30.9 million YTD 2020, a 14% increase from $27.2 million in the same period in 2019[8, 24] - Q2 2020 operating revenue grew by 20% compared to Q2 2019[8, 24] - The company reported a Q2 2020 net loss of $7.4 million, or ($0.14) per diluted share, including a $21.0 million loan loss provision and a $7.4 million non-cash goodwill impairment[24] Balance Sheet and Capitalization - Total assets amounted to $5.5 billion as of June 30, 2020[8, 21] - Gross loans totaled $4.413 billion, and deposits reached $4.304 billion[23] - The Common Equity Tier 1 (CET1) capital ratio was 11.99%, and the Total Risk-Based Capital ratio was 13.27%[23] Asset Quality - Non-Performing Assets (NPAs) to Assets ratio was 0.74%[23] - Net Charge-Offs (NCOs) to Average Loans ratio was 1.01%[23] - Reserves to Loans ratio stood at 1.61%, and Reserves to Non-Performing Loans (NPLs) ratio was 189%[23] Strategic Initiatives - The company is focused on organic growth in core markets, leveraging its relationship banking team[17] - CrossFirst is pursuing expansion opportunities through market development, including a new branch in Frisco, TX, opened on July 13, and relocating the Kansas City, MO branch[18] - The bank maintains a branch-lite structure and is heavily invested in technology[18]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number 001-39028 CROSSFIRST BANKSHARES, INC. (Exact Name of Registrant as Specified in its Charter) Kansas 26-3212879 (State or other juris ...

CROSSFIRST BANKSHARES, INC. NASDAQ: CFB | July 23tʰ, 2020 Q2 2020 EARNINGS PRESENTATION LEGAL DISCLAIMER FORWARD-LOOKING STATEMENTS. The financial results in this presentation reflect preliminary, unaudited results, which are not final until the Company's Quarterly Report on Form 10-Q is filed. This presentation and oral statements made during this meeting contain forward-looking statements. These forwardlooking statements reflect our current views with respect to, among other things, future events and our ...