CrossFirst Bankshares, Inc.

Good day, and welcome to the Crossed First Bank Shares, Inc. Second Quarter 2024 Conference 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. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star, then two. 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 Investor Relations. Please go ahead.

Good morning and welcome to Crossroads Bank Share's second quarter earnings conference call. Before we begin, please be aware this call will include forward-looking statements, including statements about our business plans, growth opportunities, expense control initiatives, cash requirements and 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 Crossverse Bank Shares, Randy Rapp, President of Crossverse Bank, and Ben Klaus, CFO of Crossverse Bank Shares. At the conclusion of our prepared remarks, our operator Betsy will facilitate a Q&A session. At this time, I would like to turn the call over to Mike, who will begin on slide eight of the presentation, available on our website and filed with earnings release.

Mike? Good morning, and thank you for joining us to discuss Cross First's second quarter financial results. I'd like to start by thanking our Colorado Springs market president, Corey Lippert, and our Colorado Springs team for hosting us today for the call. Our company had a great quarter delivering solid earnings growth, maintaining strong credit quality, and strategically returning capital to shareholders. We increased earnings in the quarter to 18.6 million, or 37 cents per diluted share. The earnings growth is a result of our focused strategy to scale our markets and verticals, resulting in expansion of net interest income and fee income. In turn, we continue to drive operating leverage across our expense base. Not only did we increase earnings, but credit quality improved in a quarter, and we continue to feel good about our reserve levels against lower classified assets and manageable non-performing balances. I also want to highlight the longer-term progress we have made as evidenced by solid growth in year-to-date operating revenue, and over 6% growth in adjusted net income compared to a year ago, despite the increased cost of deposits. We are pleased to see steady performance in our fee lines with service charge and credit card revenues growing and combined 17% year-over-year through the first six months. We continue to focus on initiatives that drive profitable growth and leverage the investments we have made in new markets, technology, and talent. Total assets grew to $7.6 billion, an increase of 2% from the previous quarter, led by loan growth from our dynamic Texas, Colorado, and Arizona markets. We continue to see selective new business opportunities. We have strategically moderated loan growth and remain focused on quality relationships while strictly adhering to our credit underwriting and pricing guidelines. We are fortunate to be located in great markets with strong economies, which we believe will allow us to continue to produce steady growth with high-quality customers. Building density and scaling our markets continues to be a priority. As I mentioned, we continue to be pleased with our credit quality metrics. Past dues, non-accruals, non-performing assets, and classified assets are all improved in a quarter. We acknowledge that market conditions continue to apply pressure to borrowers across the country. We are actively monitoring credit risk through regular portfolio reviews, quarterly deep dives across all lines of business, and regular reviews by independent third parties to validate our assessment of risk in the portfolio, which Randy will cover in more detail in a moment. Deposit growth continues to be an area of focus, and we continue to make progress on a number of our deposit initiatives. The second quarter is always challenging for deposit growth as our customers make tax payments in April. Despite that headwind, we drove net growth in client deposits led by Texas and our energy group. We also made progress this quarter on our focus to improve our efficiency ratio. I'm pleased to report that we completed a successful negotiation of our core services contract, which we expect will result in meaningful savings. Ben will cover the details during his remarks. Our strong earnings growth allowed us to both build capital in the quarter while also returning capital to our shareholders through our share buyback program. For much of the quarter, our stock price was trading at a price that we believe does not fairly reflect the true value of our company. We took advantage of that opportunity and bought back stock at an average price that was well below book value, which is highly accretive value to our shareholders. We plan to continue to leverage our earnings power to build capital while also remaining opportunistic with the buyback. Finally, I'd like to thank our employees for their continued hard work, their expertise, and their strong commitment to our clients, shareholders, and communities. We have a team of highly experienced bankers who remain focused on optimization and efficiency as we continue to scale our operations while enhancing franchise value. And now, I'd like to turn the call over to our president of Cross First Bank, Randy Rapp.