CrossFirst Bankshares, Inc.

Good morning and welcome to the Cross First Bank Shares fourth quarter and full year 2023 earnings call. All participants will be in a 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. Please note, this event is being recorded. I would now like to turn the conference over to Mike Daly, Chief Accounting Officer and Head of Ambassador Relations at of Cross First Bank Shares. Please go ahead.

Good morning and welcome to Cross First Bank Shares' fourth quarter and full year 2023 earnings conference call. Before we begin, please be aware this call will include forward-looking statements, including statements about our business plans, expansion and growth opportunities, expense control initiatives, sources of liquidity, capital allocation strategies and plans, 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. Our presentation will include prepared remarks 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, Linea, will facilitate a Q&A session. At this time, I would like to turn the call over to Mike, who will begin on slide seven of the presentation, available on our website and filed with our earnings release.

Mike? Thank you, and good morning. I appreciate everyone joining us today to discuss cross-first, fourth quarter, and full-year financial performance. Our results continue to reflect our focus on growing profitably and responsibly as we scale the strategic investments we've made in dynamic markets and verticals, best-in-class technologies, and experienced bankers delivering extraordinary service. We reported nearly $20 million in adjusted net income for the quarter and $73 million in adjusted net income for the year. This equates to a record full-year adjusted earnings per share of $1.47. Despite a challenging macro environment, Cross First had an incredible year. We closed on our Tucson acquisition, opened two prominent Texas locations, launched our new digital banking platform, and grew earnings by 6% on an adjusted basis for the year. This was all in spite of a historic rise in rates that put significant pressure on margin. As I reflect on the previous year, I continue to be extremely proud of our team and the way they managed through the turmoil within our industry with a focus on serving our clients and continuing to build franchise value. Unprecedented times like these create opportunities for us to show our clients what serving in extraordinary ways really means. and proves that our core strategy of building trusted relationships has long-term value. In 2023, operating revenue was a record $246 million, an increase of $35 million, or 16% for the year. Total assets grew to a record $7.4 billion, up $780 million, or 12% from a year ago. Our asset increase was driven by strong organic growth and deposit growth, and we continue to see growth in fee income. We grew tangible book value meaningfully this year by $75 million, or 12%, without AOCI, and $90 million, or 15%, including the AOCI improvement. One of the most important things is that our asset quality remains strong due to disciplined credit underwriting and our overall risk management framework. We entered 2023 with a theme of optimization, to build on our solid foundation and maximize the investments we made to benefit our clients and drive operating leverage to improve profitability for our shareholders. Despite the challenging environment, our team remained focused and executed on our balance sheet optimization initiatives, drove operating leverage, and grew our capital levels, all of which contribute to long-term growth of shareholder value. We also continue to show the health and strength of our loan portfolio, and our view into the future reinforces my belief that our diversification, our prudent underwriting, and our dynamic high-growth metro markets will continue to differentiate us. This year will mark our fifth full year as a public company. Over the past five years, we've operated through unprecedented times. We've all lived through a pandemic, supply chain challenges, the largest rise in inflation and interest rates for years, and a liquidity crisis. Despite the unique operating environment, we have made dramatic improvement as a company. Since our IPO in 2019, we have grown our balance sheet by $2.5 billion, or 50%. Through 2023, including tremendous loan growth across our markets, In that same period, we have made huge improvements in a number of metrics, including credit quality, with MPAs declining from 0.97% to 0.34%. Non-interest-bearing deposits growing from 13% in the pre-pandemic environment to 15% today. Operating revenue growth of more than 60%, adjusted net income more than doubling, and and our adjusted ROE increasing from 5.2% to 11.3%. We have worked hard to deploy the capital we raised during the IPO through organic balance sheet growth, share buybacks, and two successful acquisitions. Our business model has also significantly expanded and become more diverse. We have entered new high-growth metro markets such as Fort Worth, Phoenix, and Denver, and and we added and expanded industry verticals to include sponsor, restaurant, and SBA. We plan to leverage opportunities to grow efficiently by prudently managing expenses. We will continue to focus on optimizing operations while also leveraging key technology and infrastructure investments. A great example of this is our new collaboration with Nimbus, a leading fintech company providing cloud-based banking and core services. Leveraging Nimbus' technology platform, we intend to build out a digital offering to expand our geographic reach to more and more small to medium-sized businesses. I am very proud of our team and very optimistic about our future. We are in a much better position today than we were five years ago. We have a highly experienced team of bankers who remain focused on our clients as we continue to evolve and scale our operations for the future while enhancing franchise value. And now I'd like to turn the call over to our president of Cross First Bank, Randy Rapp.