CrossFirst Bankshares, Inc.

Good morning and welcome to the Cross First Bank Shares fourth quarter and full year 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press store then two. Please note this event is being recorded. I would now like to turn the conference over to Heather Worley. Please go ahead.

Good morning and welcome to Cross First Bank Shares fourth quarter and full year 2022 earnings conference call. I'm Heather Worley, Managing Director, Investor Relations. Before we begin, please be aware this call will include forward-looking statements, including statements about our business plans, the impact of the acquisition of Central, expansion and growth opportunities, and our future financial performance. These comments are based on our current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from these statements. Our forward-looking statements are as of the date of this call, and we do not assume any obligation to update or revise them except as required by law. Statements made on this call should be considered together with the risk factors identified in today's earnings release and our other filings with the SEC. We may also refer to adjusted or non-GAAP financial measures. A reconciliation of non-GAAP financial measures to GAAP financial measures can be found in our earnings release. These non-GAAP financial measures are not meant to be a substitute for or superior to financial measures prepared in accordance with GAAP. This presentation will include remarks regarding the fourth quarter and full year results from Mike Maddox, President and CEO of Cross First Bank Shares, Randy Rapp, President of Cross First Bank, and Ben Klaus, CFO of Cross First Bank Shares. At the conclusion of our prepared remarks, our operator, Andrea, will facilitate a Q&A session. At this time, I would like to turn the call over to Mike, who will begin on slide four of the presentation. Mike?

Thank you, Heather. Good morning, everyone, and thank you for joining us to discuss Cross First's fourth quarter and full year 2022 operating results. 2022 was our best year on record by a number of different measures. As we turn to 2023, we are well positioned to build on our success and optimize our investments that we've made in 2022 that will shape our future growth and expansion. We reported $17.9 million in adjusted net income for the quarter and $68.6 million in adjusted net income for the year. This equates to an adjusted earnings per share of $1.37 for the year. CrossFirst had an incredible quarter with the closing of our acquisition of Central, launching our new digital banking platform, and tremendously strong organic balance sheet growth. we grew loans by 26% for the year, with 17% of that growth being organic. From the time of our initial public offering in August of 2019 until today, we have operated through unprecedented times. We've all lived through a pandemic, supply chain challenges, and the largest rise in inflation for decades. Despite the unique operating environment, we have made dramatic improvement as a company. We have grown our balance sheet by $1.7 billion, or over 33%. This is even after we strategically shrank our balance sheet in 2021 to improve our core funding and reduce our dependence on wholesale funding. Demand deposits have grown from 13% to 25% of total deposits, and our NIM has improved from 332 for 2019 to 350 for full year of 2022. We've had a tremendous loan growth across our markets, but most importantly, credit quality has substantially improved, with NPAs declining from 0.97% in 2019 to 0.2% as of the end of 2022. Operating revenue has grown to $210 million in 2022. That is an increase of $60 million, or more than 40%, from our total operating revenue in 2019. That increase has contributed to more than 100% improvement in earnings per share and taken our ROE from 5.38% to 11.11%. We have worked hard to deploy the capital we raised during the IPO through organic balance sheet growth, buybacks, and now a successful acquisition. Our business model has also significantly expanded and become more diverse. We have entered high-growth metro markets such as Frisco, Phoenix, Denver, and Colorado Springs. And we added and expanded industry verticals, including family office, financial institutions, SBA, residential mortgage, and franchise finance. Lastly, we have a young and talented management team that I believe has the capability to achieve our plans for the future to become a $10-plus billion institution. In short, we are better positioned today than we were when we went public, and I'm very proud of our team and very optimistic for our future. Turning to the most recent quarter, we have had several significant accomplishments, and we continue to make investments in the development of our people, our processes, and the technology necessary to help meet the banking needs of our clients and our communities. We are very excited to welcome all of the team members from Central with the closing of our acquisition in November. I'm extremely appreciative of the entire team for their dedication and commitment to completing this successful partnership. The culture fit we identified as the differentiator for success with this experienced team has proven to be a key driver of our ability to operate together seamlessly. We've already experienced growth in new markets as a result of delivering more capabilities that come with size and scale. We've also deployed the enhanced SBA and mortgage capabilities across our legacy markets. This transaction is immediately accretive for our shareholders, and Ben will cover more details of the transaction shortly. Not only did we complete a successful acquisition, but we also launched our new digital banking platform in the fourth quarter, providing enhanced online tools and resources for our clients. This marks the culmination of an initiative we started last year to evaluate our technology partnerships and drive to a best-in-class client experience. As I reflect on what defines CrossFirst, it starts with our people. As we previously discussed during 2022, we enhanced the leadership structure of our organization to position the bank for future growth. We have continued to invest in talent and feel strongly that we have the people in place to sustain strong organic growth and at the same time deliver a great experience for our clients. This is only possible if we maintain and build on our culture. We were once again recognized as the best place to work by the Kansas City Business Journal and received exemplary scores on our annual Gallup Q12 Employee Engagement Survey. As we turn to 2023, we will continue to be opportunistic about the growth opportunities available to us. Having said that, we remain cognizant of the economic uncertainty as the Fed pursues their goal of reining in inflation. Maintaining great asset quality remains our number one priority, and it will not be compromised to facilitate growth. At Cross First, we operate as one team, regardless of location or function. With increased pressure on talent, it is important for us to invest in the well-being of our people. Maintaining our world-class culture means ensuring we are not just recruiting but retaining our top talent. We strive to position ourselves not just for annual growth but for the next decade of growth and performance improvement. That's where optimizing our operations and efficiency becomes so important as does deepening our community relationships. I'm excited about 2023 and the future of our company. And now I'd like to turn the call over to our president of Cross First Bank, Randy Rapp.