CrossFirst Bankshares, Inc (NASDAQ:CFB) Q4 2019 Earnings Conference Call - Final Transcript

Jan 23, 2020 • 05:00 pm ET


CrossFirst Bankshares, Inc (NASDAQ:CFB) Q4 2019 Earnings Conference Call - Final Transcript


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Mike Maddox

increased average loans by 6% from the third quarter of 2019 and 29% compared to year-end 2018. We funded $255 million of loans to new borrowers that attributed to the 6% growth, and help offset more pay-offs and amortizations of our current customer base. Our loan portfolio growth continues to be balanced between C&I and CRE credits. We also continue to see customer demand for longer-term fixed-rate loans, which has contributed to the increase and back-to-back swap activity.

The industry is getting more aggressive on structure and pricing of credits. We will continue to be disciplined as we underwrite and pursue new business this late in the credit cycle. It is extremely important that we maintain the integrity of our underwriting standards. As George mentioned, our classifieds and non-performing assets remained flat for the quarter. And we finished the quarter with non-performing assets below 1% of total assets.

During the fourth quarter, we had $5.5 million of charge-offs, which included a partial charge-off of our previously identified and disclosed non-performing credit. Our total charge-offs to average assets for the year was 0.31%. Our classified assets to capital for the fourth quarter also remain mostly unchanged at 13.3% compared to the third quarter of 2019, and trended down compared to 2018. Without our large previously identified non-performing credit, our classified assets to capital will be below 10%.

We increased our annual provision by $3.4 million to $13.9 million to support continued loan growth, and increase the specific reserve on our non-performing credit. At the end of the quarter, the overall loan loss reserve was 1.06% of loans, compared to 1.18% in the third quarter of 2019. This decline was a result of our lower classified assets, and is commensurate with the overall risk in our portfolio. In addition, we are not required to adopt CECL in January of 2020. We continue to run parallel analysis on the potential impact of our reserves and capital, and are still assessing the timeline for adoption. Our capital position remains strong, and our growth in the second half of the year leveraged our newly raised capital.

Overall, we've had a very successful year in growing the Company, which closed an initial public offering and continued record performance.

As a part of our final remarks, we would like to wish our friends, the Hunt family, and the entire Kansas City Chiefs organization, good luck in the Super Bowl. Thank you, again, for joining our call today. And as we mentioned earlier, our full results and financial metrics are included in the earnings release and presentation.

This wraps up our prepared remarks, and now I'll turn it back over to the operator to begin Q&A portion of the call. Thank you.