Financial Performance - Net interest income decreased by $1.6 million for the three-month period ended March 31, 2024, compared to the same period in 2023, with a net interest margin - FTE reduction of 45 basis points [206]. - Non-interest income totaled $5.589 million for the first quarter of 2024, representing a 26% increase compared to $4.421 million in the same period of 2023 [208]. - Net income for the first quarter of 2024 was $18.2 million, or $0.36 per diluted common share, compared to $16.1 million, or $0.33 per diluted common share, in the first quarter of 2023 [211]. - Average earning assets increased to $7.2 billion for the three-month period ended March 31, 2024, an increase of $0.6 billion compared to the same period in 2023 [215]. - Total assets were $7.5 billion at March 31, 2024, reflecting a $0.1 billion increase, or 1%, from $7.4 billion at December 31, 2023 [220]. - Non-interest expense decreased by $0.6 million to $37.505 million for the three-month period ended March 31, 2024, compared to $38.092 million in the same period of 2023 [217]. - The GAAP efficiency ratio for the first quarter of 2024 was 60.31%, compared to 60.81% for the same period in 2023 [218]. - Adjusted net income for the quarter ended March 31, 2024, was $18,223 thousand, compared to $19,571 thousand for the previous quarter [276]. - Diluted earnings per common share (GAAP) for the quarter was $0.36, up from $0.35 in the previous quarter [276]. Credit Quality - The provision for credit losses was $1.7 million for the first quarter of 2024, driven by loan growth, compared to $4.4 million in the same period of 2023 [207]. - As of March 31, 2024, non-performing assets decreased by $4.4 million to $20.4 million, with the non-performing assets to total assets ratio decreasing from 0.34% to 0.27% [251]. - Total net charge-offs to average loans were 0.10% for the first quarter of 2024, down from 0.12% in the previous quarter and the same quarter last year [251]. - Non-accrual loans decreased to $12.1 million from $18.5 million at December 31, 2023, while total non-performing loans decreased to $15.0 million from $24.8 million [254]. - The ratio of non-performing loans to total loans improved to 0.24% from 0.40% at December 31, 2023 [254]. - The allowance for credit losses represents the expected credit losses in the loan portfolio and off-balance sheet commitments [249]. - The allowance for credit losses increased to $74,856 thousand as of March 31, 2024, from $73,462 thousand at the beginning of the period, reflecting a provision of $2,855 thousand [324]. Loan Portfolio - As of March 31, 2024, gross loans increased by $121 million or 2% from December 31, 2023 [243]. - The total weighted average rate for the loan portfolio was 7.74% as of March 31, 2024 [237]. - The loan portfolio remains balanced, with 44% of loans in commercial and industrial and owner-occupied commercial real estate, and 44% in non-owner-occupied commercial real estate [326]. - The weighted average rate for commercial and industrial loans was 5.35% with a fixed balance of $523,040 thousand as of March 31, 2024 [237]. - The residential real estate segment had a weighted average rate of 4.08% with a balance of $101,643 thousand as of March 31, 2024 [237]. Investment and Securities - The total available-for-sale securities amounted to $786,603 thousand with a weighted average yield of 3.46% as of March 31, 2024 [240]. - The investment portfolio increased due to the purchase of $40 million in mortgage-backed securities and $5 million in collateralized mortgage obligations [241]. - The company is restructuring its investment portfolio to reduce concentration in municipal investments and increase liquidity [241]. Deposits and Liquidity - Deposits totaled $6.6 billion as of March 31, 2024, reflecting an increase of $96 million or 1% from December 31, 2023 [255]. - On-balance sheet liquidity as a percentage of assets was 13% as of March 31, 2024, down from 14% at the end of the previous quarter [280]. - Total liquidity as a percentage of assets decreased to 33% from 34% [280]. - The company believes its current on and off-balance sheet liquidity will be sufficient to meet anticipated cash requirements for the next 12 months [269]. Risk Management - The company is managing interest rate risk through a combination of gap reports, earnings simulation, and economic value of equity [290]. - The company continuously monitors the interest rate environment and is prepared to implement derivative strategies to protect net interest margin if necessary [294]. - The Company is assessing potential risks in the commercial real estate portfolio due to higher interest rates and operating costs [252]. - Interest rate risk management is crucial for the Company, with a focus on maximizing income while minimizing interest rate risk through a three-step process [361]. Regulatory and Compliance - The Company is subject to heightened legal and regulatory compliance and litigation risk due to the nature of its business [296]. - The Company is subject to various regulatory capital requirements, and failure to meet these can lead to mandatory actions by regulators [358]. - The Company and the Bank opted to exclude Accumulated Other Comprehensive Income (AOCI) from regulatory capital calculations, meaning changes in AOCI do not impact regulatory capital ratios [353]. - The Company believes it met all capital adequacy requirements as of March 31, 2024, which include maintaining a 2.5% capital conservation buffer [358]. Shareholder Actions - The Company purchased $1.5 million of common stock during the first three months of 2024, with $14.4 million remaining available for repurchase [267]. - The Company declared dividends of $155 thousand related to Series A Non-Cumulative Perpetual Preferred Stock during the three months ended March 31, 2024 [268]. - The company has a share repurchase program with $14.4 million remaining available for repurchase as of March 31, 2024 [299].
CrossFirst Bankshares(CFB) - 2024 Q1 - Quarterly Report