CrossFirst Bankshares, Inc.

Ladies and gentlemen, thank you for standing by and looking to the cross-verse third quarter 2020 earnings conference call. At this time, all participants' minds are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you need to press star on one of your cell phones. Please be advised that today's conference is being recorded and if you require any further assistance, please press star as well. I will now hand the conference over to the speaker today, Matt Diem. Thank you, and please go ahead and start.

Welcome and thank you for joining us today. On the call today are Mike Maddox, President and CEO, Dave O'Toole, Chief Financial Officer, and Randy Rapp, our Chief Credit Officer. As a reminder, a telephonic replay of this call, along with our earnings release and presentation, will be available on our Investor Relations website for an extended period of time. Before we begin, let me remind everyone that this call may contain certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We caution investors that actual results may differ materially from the expectations indicated or applied in our forward-looking information. We provide a comprehensive list of risk factors in our SEC filings, which I highly encourage you to review. Any forward-looking statements apply only as of today, and we undertake no obligation to update them, except as required by applicable securities laws. Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measures are included in the release and presentation copies of which are all available on our investor relations website. All earnings per share metrics discussed today are provided on a diluted per share basis. I'd now like to turn the call over to Mike Maddox.

Thank you, Matt. I'm excited to be here today as we discuss our third quarter results on what has been an unprecedented and challenging 2020 for our industry and our customers. At Crossverse, the health and safety of our employees, clients, shareholders, and the communities remain a top priority, and I'd like to wish them all the best in the hopes that they are staying safe and healthy. As we work through a difficult macroeconomic climate, I am proud of our third quarter performance. We continue to improve operating leverage. We have maintained strong capital levels. and increased our earnings power through efficiency initiatives, all of which I believe will make the company stronger as we navigate through the current downturn. The bank reported positive income and prudently added another $10.9 million to the loan loss reserves, bringing our allowance to loans ratio to 1.7 percent. We expect to continue building our reserves for the remainder of 2020 in order to continue strengthening our balance sheet and position us for a stronger 2021. To offset the impact of elevated provisioning and margin compression, we have focused on creating operational efficiencies by optimizing our staffing levels, investing in technology, and controlling discretionary expenses. Our markets, technology focus, and branch-light strategy have allowed us to continue to grow and serve our customers effectively during the pandemic. In contrast to other areas of the country, the Midwest and Southwest markets we serve have unemployment rates that are lower than the national average, and their economies continue to improve steadily. We are also excited to announce that our Board of Directors approved a share repurchase program of up to $20 million. We feel strongly about the strength and the direction of our company and believe executing a stock repurchase program is prudent given our stock, along with much of our industry, is trading below tangible book value. The company has the discretion and flexibility to repurchase shares under the program through the end of 2021. The timing of repurchases and the exact number of shares of common stock to be purchased will both depend on market conditions and other factors. Disruptions caused by the pandemic have not prevented us from achieving positive accomplishments. Our team delivered net income of $8 million, or 15 cents per share, for the quarter. In addition, the company produced record quarterly and year-to-date pre-tax, pre-provision profits despite operating in a pandemic and a historically low interest rate environment. Year over year, we delivered loan and deposit growth of 23 percent, which includes our execution of loans under the Paycheck Protection Program to support our customers and our communities. Excluding PPP loans, our quarter over quarter loans grew conservatively at 1.6 percent. In addition, Our overall deposits grew by 4.4 percent from the previous quarter. That includes robust demand deposit growth year to date. While our loan and deposit growth has historically been very strong, strategically the company is focusing on fee income generating opportunities to diversify our revenue and take pressure off our margin. While our teams will continue to execute our growth model, We also remain focused on enhancing our efficiency and optimizing capital to deliver earnings per share growth. Our largest non-interest expenses are salaries and benefits. And while we optimized our staffing levels this quarter, we plan to maintain such efficiency as we continue to grow. Hiring the best talent in our markets is one of our core strengths as a company. we remain committed to hiring talented bankers and employees in a measured approach to support our growth objectives. We have a great team in place that is highly capable of successfully executing our strategy. During the quarter, we also completed two key strategic accomplishments with the opening of our second full-service bank in the Dallas metropolitan area located in the Hall Park complex across from the Star District in Frisco, Texas. And in September, our Kansas City team moved into a new prominent location on the Country Club Plaza, which is in the heart of Kansas City. Both locations will enable us to expand our presence in two of our fastest growing markets. We believe these locations will help us grow core middle market customers and expand our demand deposit base. We are still operating under a pandemic plan, and the team continues to serve our customers in extraordinary ways, while a large percentage of our employees continue to work remotely. We have approximately 90% of our employees working on rotations with time split between home and our offices. Our lobbies continue to operate by appointment only. We will remain flexible regarding the office and branch reopening process. We have been experiencing a relatively normal volume of churn in our loan portfolio, which is a positive indication of the strength of our markets. We experienced just over 300 million of paydowns during the quarter, and we still had net growth in the loan portfolio. The paydowns we did receive were primarily from secondary market refinances as well as asset sales. We continue to see new business opportunities, but are very cautious in assessing and underwriting new credits. During the quarter, we originated approximately 183 million in loans to new customers. Our commercial banking teams are actively engaged with our customers to proactively support them. Our team continues to do a very good job of administering our loan portfolio. Our modifications continue to move downward, which is also a good sign that our customers are managing through this difficult economic environment. I am so proud of the level of support we were able to provide our customers to allow them to better weather the initial days of the pandemic. As expected, we continue to see great migrations in our loan portfolio, which has led to elevated provisioning and negatively impacted our asset quality metrics. As an organization, we will continue to work with customers who remain negatively impacted by the pandemic. Randy Rapp will go into more detail regarding our loan portfolio performance and modification trends in a few moments. As of September 30th, we continue to hold approximately $369 million of PPP loans. Like most banks, we have begun the forgiveness process and started seeing some loans forgiven. We will likely see the bulk of these loans forgiven during the first half of 2021. As of quarter end, we have submitted to the SBA 64 PPP loans for forgiveness, totaling $49 million. Before I turn it over to Dave, I want to thank our employees, who despite the various challenges of the pandemic, have continued to execute on our strategies, and most importantly, are delivering extraordinary service to our customers. The last six months have tested our employees, customers, and communities, and I am proud of the way they have responded. Our performance during this pandemic shows the progress we've made toward achieving efficiency, managing our risk, and setting the stage for future growth and success. I would like to turn the call over to our Chief Financial Officer, Dave O'Toole, for a more detailed discussion of the financial results.