Financial Performance - Net income for the second quarter of 2021 was $15.6 million, representing a return on average assets of 1.10% and a return on average equity of 9.86%[122] - The efficiency ratio for the second quarter of 2021 was 53.6%[122] - Total non-interest income for the quarter ended June 30, 2021, was $5,825 thousand, a 121% increase from $2,634 thousand in the same quarter of 2020[151] - Total non-interest expense for the quarter ended June 30, 2021, was $25,813 thousand, a decrease of 17% compared to $31,010 thousand for the same period in 2020[159] Asset and Loan Growth - Total interest-earning assets increased to $5,536,722 thousand in 2021 from $5,272,310 thousand in 2020, reflecting a growth of 5.03%[138] - Gross loans, net of unearned income, amounted to $4,409,280 thousand in 2021, up from $4,357,055 thousand in 2020, representing a growth of 1.20%[138] - The outstanding loan balance for PPP loans at the end of June 2021 was $197.1 million, down from $336.4 million at the beginning of the period[128] - Total gross loans amounted to $4,252,325, with commercial loans at $1,187,824 and residential loans at $641,669[180] Credit Quality - Credit quality metrics improved, with classified assets declining by $99 million and the ratio of nonperforming assets to total assets decreasing to 1.09% from 1.15% in the previous quarter[129] - Provision for loan losses for the quarter ended June 30, 2021, was $3,500, a decrease from $7,500 in the previous quarter[182] - The allowance for loan losses stood at $75,493, representing 100% of total loans[184] - Nonperforming assets include nonaccrual loans, loans past due 90 days or more, and foreclosed assets[194] Interest Income and Expense - Net interest income - tax-equivalent rose to $43,062 thousand in 2021 compared to $41,842 thousand in 2020, an increase of 2.91%[138] - Total interest income for the three months ended June 30, 2021, was $834 thousand, a decrease of $3,555 thousand compared to the same period in 2020[1] - Total interest expense for the three months ended June 30, 2021, was $1,405 thousand, a decrease of $2,536 thousand compared to the same period in 2020[1] Deposits and Liquidity - The company's deposits totaled $4 billion as of June 30, 2021, a decrease of $338 million or 7% from December 31, 2020[203] - On-balance sheet liquidity was $918,959 thousand as of June 30, 2021, down from $1,046,110 thousand as of December 31, 2020[207] - Total liquidity as a percentage of assets was 30% as of June 30, 2021, compared to 32% as of December 31, 2020[207] Operational Changes - The company expanded its operations to Phoenix, Arizona during the second quarter[122] - The company hired Ben Clouse as Chief Financial Officer, who previously served in the same role at Waddell & Reed Financial, Inc.[122] Cost Management - Salary and employee benefits increased by $1,656 thousand or 12% for the three months ended June 30, 2021, compared to the same period in 2020, primarily due to performance-based awards[160] - Occupancy costs rose by $352 thousand or 17% for the three months ended June 30, 2021, attributed to new locations in Frisco, Texas, and Kansas City, Missouri[165] - Professional fees decreased by $157 thousand or 12% for the three months ended June 30, 2021, mainly due to reduced legal fees[166] Interest Rate Risk Management - Interest rate risk management is a key focus, with strategies in place to maximize income while minimizing risk exposure[217] - The Funds Management Committee (FMC) employs three systems to manage interest rate risk: gap reports, earnings simulation, and economic value of equity[218] - Approximately 65% of the company's earning assets are set to reprice or mature within the next 12 months, indicating a potential for increased net interest income[220] Future Outlook - The company plans to invest up to $3 million into a venture capital fund aimed at accelerating technology adoption for community banks[208] - The company anticipates continued fluctuations in credit card activity and related income in connection with changes in COVID-19 cases and the vaccine rollout[157]
CrossFirst Bankshares(CFB) - 2021 Q2 - Quarterly Report