CrossFirst Bankshares, Inc.

Thank you for standing by, and welcome to the CrossFit's Bank Share Fourth Quarter Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. If you require any further assistance, please press star 0. Thank you. I would like to hand the conference over to our speaker today, Mr. Matt Needham. Please go ahead.

Welcome, and thank you for joining us today on the call. On the call, we have 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 get underway, let me remind you that our release, quarterly investor update, and presentation slides that accompany this call are all available on the CrossFirst Investor Relations website. Slide two of the presentation is our cautionary statement. I want to point out that in our remarks this afternoon, we will be discussing forward-looking information, which involve a number of risks and uncertainties that may actually cause results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors in our SEC filings, which I encourage you to review. Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measures are included in our release or presentation, copies of which are also 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. Mike Maddox Thank you, Matt.

You know, I'd love to start the call off this afternoon. Being here from Kansas City, we want to wish the Hunt family, Steve Capel, our director, and the Kansas City Chiefs the best of luck in the Super Bowl. We're really excited, and we're getting used to the Super Bowl thing. So we're looking forward to next Sunday. I'd like to begin today by wishing our clients, shareholders, employees, and their families health and wellness. as we close the book on 2020 and look forward to 2021. Although it was an extremely difficult year for many, we've been fortunate with so much to be proud of and thankful for when looking back at 2020. Our Cross First team persevered and adapted to the unprecedented environment and drove the organization to new heights while taking care of each other, our clients, and our communities. As Hall of Fame coach Larry Brown used to tell us, in order to succeed, you have to be attached at the hip, with no separation between you and your teammate. So you are all working together as a team with a common goal of winning. Coach's words have never rung truer than in 2020. Our long-term success is dependent on staying true to our foundation and core values, our founding pillars of character, competence, commitment, and connection. combined with a strong team-focused culture, lead to an extraordinary company. We are one team working together, moving one bank towards our shared vision for success. I believe that our employees and board of directors at Cross First exemplify this statement, and I cannot be more excited for our future and to execute on our 2021 plan. We remain committed to our core strategic advantages that have allowed us to be successful since our inception, and we look to further enhance our overall performance and profitability. We are committed to our branch-light business model, and we expect our technology-forward approach to lead us to greater efficiencies in the future as we operate and grow the company. During 2020, I was focused on our corporate structure and getting the right team in place. In the third quarter, we promoted Steve Peterson to Chief Banking Officer to oversee our sales, marketing, and local market activity. We were also excited to announce the hiring of Jana Murfin, our new Chief Technology Officer, who started yesterday and will lead our strategic technology initiatives. We are thrilled to have Jana bring her knowledge and experience to Cross First as we continue our focus on being a technology-forward company. I've only been CEO of Cross First Bank Shares for seven months, and I'm very pleased with the resilience our customers and employees have exhibited throughout 2020. The past year challenged all of us personally and professionally, but our individual success stories were a testament to the power of resilience, trust, and collaboration. Despite the significant challenges of remote work, virtual school, and a deadly pandemic, We never lost sight of our purpose of serving people in extraordinary ways. It is an honor to lead a team of dedicated and passionate employees who work long hours to help our customers navigate a pandemic-induced economic recession while also taking care of their own families. With that in mind, I want to celebrate their efforts and highlight some of the other positives that Cross First experienced in 2020. We surpassed $5 billion in assets and $4 billion in total loans. Our Wichita location surpassed $1 billion in assets, making it our third market to pass this milestone. We believe in our experienced banking team and the relationships they have developed. We developed and executed on our pandemic plan and are successfully navigating through a difficult credit cycle. The company continues to build reserves for the future And after adding another $10.9 million, our loan loss reserves are at the highest level in the bank's history. We expect provisioning to moderate in the first half of 2021, but provisioning will still remain elevated from historical levels. For the year, we added $56.7 million to the reserves. which impacted our bottom line and relative full-year performance metrics, but also positioned us well for the future. For the quarter, we reported net income of $8.1 million and earnings per share of 15 cents, which caps off the full year with net income of $12.6 million and earnings per share of 24 cents. While our bottom-line performance metrics were impacted by our significant provisioning, Our team produced record performance with the strongest pre-tax, pre-provision profits in the company's history, despite the challenging backdrop. During the fourth quarter, we successfully commenced our share repurchase plan and are pleased to announce the company bought over 600,000 shares, or $6.1 million of common stock, all of which were purchased below our tangible book value. In addition to building reserves, We lowered our overall energy concentration, which is a part of our long-term strategy. We have tightened our credit process and focused on reducing risk. We look to deliver better than peer earnings and returns for shareholders by continuing to build strong relationships with our clients and the communities we serve. Our commitment to our clients and businesses is exemplified through our efforts in providing our customers with modifications and PPP funding during the pandemic. In the second quarter, we provided approximately $700 million of loan modifications. I'm pleased to report that 87% of the modifications are back to making full payments. Additionally, we successfully implemented the Paycheck Protection Program and produced $369 million of PPP loans for almost 1,200 clients. We are now focused on helping our existing and new clients secure additional funding through the second round of PPP. Our deposits have grown significantly, enhanced by our DDA account growth, which improved to approximately 15 percent of total deposits, while also growing total deposits by 20 percent compared to the prior year. Excluding PPP loans, our bankers delivered year-over-year loan growth of 8%. As we enter 2021, we feel good about our current loan pipeline and expect solid contributions from our new locations in the rapidly growing Frisco, Texas market and our more prominent location on the Country Club Plaza in Kansas City. Our team continues to operate under our pandemic plan with roughly 90% of our employees working on rotations. While most of our team has been working from home, I'm proud that our employee engagement scores for the company remained high and our investments in technology continue to pay off. We also remain very focused on growing our earnings per share by enhancing our efficiency and optimizing our capital. Our efficiency ratio improved again this quarter, falling to 53.4 percent. A 2.2 percent improvement as compared to the fourth quarter of 2019, and a 32 percent improvement as compared to the fourth quarter of 2017. Though we have been focused on efficiency, we remain highly committed to our organic growth model. Having the best talent in our markets is one of our core strengths as a company. And as we look forward to 2021, we remain focused on recruiting and attaining the very best talent. Our strong capital position provides us incredible flexibility as we evaluate organic growth targets, potential acquisitions, technology investments, and talent development. Our optimism for the future is further enhanced by the fact that the markets we serve have performed better during this recession than the national average. I would now like to turn the call over to our CFO, Dave O'Toole, for a more detailed discussion of the financial results.