Financial Performance - Operating revenue increased by $1.4 million, or 2%, from the prior quarter[119] - Net income for Q2 2024 was $18.6 million, or $0.37 per diluted common share, compared to $16.0 million, or $0.33 per diluted common share in Q2 2023[122] - Net interest income increased by $3.4 million and $1.7 million for the three- and six-month periods ended June 30, 2024, compared to the same periods in 2023[128] - Non-interest income for the three months ended June 30, 2024, was $5.7 million, a decrease of 1% compared to $5.8 million in the same period of 2023[131] - Service charges and fees on client accounts increased by 11% for the three months ended June 30, 2024, reaching $2.3 million compared to $2.1 million in the same period of 2023[131] - Adjusted net income for Q2 2024 was $18,622 thousand, compared to $18,223 thousand in Q1 2024, reflecting a 2.2% increase[176] - Adjusted return on average common equity for Q2 2024 was 10.59%, consistent with Q1 2024, while the GAAP return was also 10.59%[180] - The diluted earnings per common share (GAAP) for Q2 2024 was $0.37, compared to $0.36 in Q1 2024, indicating a 2.8% increase[176] Asset and Loan Growth - Loans grew by $95 million, or 2%, for the quarter and $216 million, or 4%, year-to-date[119] - Total assets increased to $7.42 billion as of June 30, 2024, compared to $6.82 billion in the prior year[128] - The company reported a $588 million increase in average earning assets for the six months ended June 30, 2024, driven by higher average loan and securities balances[128] - Loans increased by $217 million (4%) from December 31, 2023, with total loans reaching $6.34 billion[144] - Total deposits rose by $242 million to $6.7 billion as of June 30, 2024, compared to December 31, 2023[139] - The investment portfolio totaled $802 million as of June 30, 2024, an increase of $36 million from December 31, 2023[140] Credit Quality and Non-Performing Assets - Non-performing assets decreased to 0.22% of total assets, with annualized net charge-offs at 0.07% of average loans[119] - The allowance for credit losses (ACL) as of June 30, 2024, is $81,431 thousand, representing 100% of total loans[151] - Net charge-offs for the three-month period ended June 30, 2024, were $1.0 million, primarily due to one commercial and industrial loan and one commercial real estate loan[152] - Non-performing assets decreased by $3.7 million to $16.7 million at June 30, 2024, with the non-performing assets to total assets ratio decreasing from 0.27% to 0.22%[154] - The annualized net charge-offs for the second quarter of 2024 were 0.07%, compared to 0.10% in the previous quarter and 0.04% in the same quarter of the previous year[154] Capital Management and Returns - Capital returned to stockholders was $3.0 million during the quarter via share buybacks at a weighted average price of $12.78 per share[119] - The GAAP efficiency ratio for Q2 2024 was 59.32%, improved from 62.02% in Q2 2023[136] - Tangible common stockholders' equity increased to $690,629 thousand as of June 30, 2024, up from $676,817 thousand at March 31, 2024, representing a 2.4% growth[182] - The tangible book value per common share increased to $14.02 as of June 30, 2024, from $13.70 at March 31, 2024, marking a 2.3% rise[182] Interest Rate and Funding - Net interest margin remained consistent at 3.20%[119] - The cost of funds increased by 51 basis points compared to the second quarter of 2023 due to pricing pressure on deposits and client migration into higher cost deposit products[128] - The company anticipates net interest margin - FTE to be in a range of 3.20% to 3.25% for the full year 2024[129] - The Company expects $3.6 billion of time deposits and other borrowings to reprice in the next twelve months, with 92% of time deposits maturing within the same period[188] - As of June 30, 2024, 73% of loans, amounting to $4.6 billion, are set to mature or reprice within the next twelve months, including $3.8 billion repricing in July 2024[188] Operational Efficiency - Non-interest expense for Q2 2024 increased by $0.3 million (1%) compared to Q2 2023, primarily due to a $0.7 million increase in data processing expenses[134] - Adjusted Non-interest expense for the quarter ended June 30, 2024, was $36,819 thousand, an increase from $34,104 thousand in the same quarter last year, reflecting a year-over-year increase of 7.9%[184] - The Efficiency Ratio (GAAP) improved to 59.32% for the quarter ended June 30, 2024, down from 62.02% in the same quarter last year, indicating enhanced operational efficiency[184] Economic Outlook and Risk Management - The company continues to monitor U.S. economic indicators, including inflation and interest rates, which may impact the commercial real estate market[155] - The Company’s interest rate risk management involves measuring the interest rate risk position, assessing policy constraints, and strategic review and implementation[185] - The Company continuously monitors the interest rate environment and believes that derivative strategies to protect net interest margin are available if needed[188]
CrossFirst Bankshares(CFB) - 2024 Q2 - Quarterly Report