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]
CrossFirst Bankshares(CFB) - 2020 Q4 - Earnings Call Transcript