CrossFirst Bankshares, Inc.

Good day and thank you for standing by. Welcome to the Cross First Q1 2021 earnings conference call. At this time, all participants are in a 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 one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Matt Needham, Director of Investor Relations. Please go ahead.

Welcome. Thank you for joining us today on the call. On the call are Mike Maddox, President and CEO, Dave O'Toole, Chief Financial Officer, and Randy Rapp, Chief Risk and 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. Before we get underway, let me remind you that our release is quarterly investor update, and presentation slides that accompany this call are available on the CrossFirst Investor Relations website. Slide two is a 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 cause actual results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors, and I encourage you to review them. Reconciliations of all non-GAAP financial measures to the nearest comparable GAAP measures are included in the release or presentation, copies of which are also available on the website. All earnings per share metrics today are discussed on a diluted per share basis. I'd now like to turn the call over to Mike Maddox. Thanks.

Mike Maddox Thank you, Matt, and thank you to everybody for joining the call. Our earnings this quarter show continued momentum and strengthening of our core business. Strategically, we've been focused on continually improving our earnings, reducing our risk, and improving our credit metrics post-pandemic. Despite elevated provisioning, margin compression, and a pandemic, we had the most profitable quarter in our company's history. This is due to our continued growth, increased revenue, and the positive impact of the efficiency initiatives implemented during 2020. The company finished the first quarter of 2021 with just under $6 billion in assets. Our performance metrics are continuing to trend in the right direction, and our asset quality continues to improve as the economy recovers and energy prices stabilize. Net income for the first quarter was a company record of $12 million, which included a provision of $7.5 million and resulted in earnings per share of $0.23. We continue to grow operating revenue, and our pre-tax, pre-provision profit was, again, the best in company's history. I'm extremely proud to report an efficiency ratio approaching 50%, which has steadily improved since our initial investment in Dallas during 2017. During the first quarter of 2021, we had a strong deposit growth of 8%, and we are pleased that our DDA accounts grew 11%. Excluding PPP loans, the loan portfolio grew 4% compared to the first quarter of 2020 and 1% from our previous quarter. We continue to allocate additional reserves to the industry segments most affected by the pandemic and are comfortable with our current reserve levels. We are pleased that our non-performing assets and classified assets decreased for the quarter, and we expect to see continued improvement over the coming quarters. Based on our current loan portfolio trends, the outlook for the economy, and the outlook for the economy, we expect our loan provisioning to moderate through the remainder of 2021. Lastly, our capital ratios remain strong, and we continue to execute on our stock repurchase plan. Our path to success is grounded in the ideals of one team, one bank with a shared vision of success. We are one team, working together, moving our company forward. We remain focused and dedicated to our purpose of serving people in extraordinary ways and to our promise to contribute to the well-being of our employees, clients, and the communities we serve. For us to be successful in executing our business plan, attracting and retaining the highest quality talent remains a strategic focus. I'd like to spend a few minutes to address some of the strategic changes that are occurring within our management team. As you probably read in our March announcement, our Chief Financial Officer and Chief Investment Officer, Dave O'Toole, has announced his plan to retire from Cross First after nearly 15 years of service. He's had a long career in banking and banking advisory services. Dave is finishing up his storied career with Cross First after helping take the company public in 2019. Dave is a founding shareholder, board member, and a friend, and he has been instrumental in helping us become one of the most successful banks in the 2007 de novo class. We've executed on our strong relationship banking model that has led to a compounded annual asset growth rate of 52% since our founding in 2007. During Dave's tenure, our footprint has expanded from 3,000 square foot office suite in Overland Park, Kansas, to eight locations in four states and just under $6 billion in assets. Dave will continue serving as CFO until the company identifies his successor, Once our new CFO is hired, Dave will step down from that role and continue to serve as our Chief Investment Officer through the end of 2022. We are currently working through a national search process to find our next CFO. During the quarter, we consolidated the leadership of our enterprise risk and credit management teams under Randy Rapp. Randy now assumes the roles of both Chief Credit Officer and Chief Risk Officer, This structure allows us to better leverage his expertise in these areas, increase efficiencies, and enhance our capabilities for future growth. Tom Robinson will take on the title of Executive Director of Risk and Credit and will work closely with Randy to oversee these areas. Tom continues to provide us great experience and depth in our credit group and the support we need for growth while continuing to be the point person with our regulators. I want to recognize Tom for the outstanding job he has done building out our enterprise risk management team and practices over the last two years. Another major initiative in our strategic plan is making sure we stay competitive and current with our technology platforms. This is imperative in today's competitive banking landscape. We are evaluating new technologies that will further enhance our products, customer experience, and efficiencies. Our new chief technology officer, Jana Murfin, is benchmarking our technologies across the company to allow us to effectively grow, reduce customer acquisition costs, provide customer convenience, and more efficiently serve our growing client base. We also recently made a small investment in a bank-focused technology fund that we hope will keep us informed and provide us access to the most current technology available. The pandemic has accelerated the adoption of technology, and we expect to see increased investment and competition from the growing fintech industry. I would now like to provide a brief update to our COVID plan and our perspective on our economic outlook. I'm happy to report that we reopened our lobbies to the public on March 1st and commenced our return to work plan for our employees on April 5th. We continue to prioritize the health and safety of our employees and clients, and we are excited to increase in-person interactions as conditions permit. We continue to work with our employees and provide flexibility for in-office and remote working opportunities where necessary. We are cautiously optimistic that the economic outlook will continue to improve as vaccinations roll out and the fiscal stimulus package fuels growth and consumer confidence. The continued reopening of our local economies and increases in national discretionary spending should provide a boost to several industries, including travel, leisure, and hospitality. Additionally, the oil and gas markets have bounced back from last year's historic lows with a more favorable industry outlook. In the first quarter of this year, we broke to $111 million of second-round PPP loans, mostly to existing customers. and we were able to process $67 million in loan forgiveness. Slide seven provides you with a complete overview of our fee recognition on these loans, and we will continue to work with our customers to take these loans through the forgiveness process. We believe the vast majority of these loans will be successfully forgiven by the SBA. While there still remains uncertainty surrounding how the enduring pandemic-driven changes will affect different industries. We believe that the fiscal stimulus and improved local economies create a favorable scenario for our customers. We expect our balance sheet to continue to grow, and our pipeline remains very strong. During the quarter, we funded $312 million of new loans from new and existing customers, and we will continue to evaluate new market expansions and potential acquisitions to further supplement our growth strategy. I am really proud of how our teams have managed our risk and progressed on our strategic initiatives in the first quarter of this year. I am very optimistic for our future. I want to congratulate and thank all of our employees for their hard work and dedication over the last 12 months. Their efforts have really been truly amazing. We look forward to focusing on growth as the vaccination process continues and our cities continue to open up. I'd now like Dave to take you through the financial details of our results.