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

Jan 23, 2020 • 05:00 pm ET

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

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Q & A
Operator
Operator

Thank you, sir. [Operator Instructions] Our first question is from Brady Gailey with KBW. Please go ahead.

Analyst
Brady Gailey

Thank you. Good afternoon, guys.

Executive
George F. Jones

Hi, Brady.

Analyst
Brady Gailey

So the margin held in relatively well and the fourth quarter is down 1 basis point, it's now 3.23%. Dave, you're talking about that band that you guys have been in 3.25% to 3.50%, you're kind of at the lower end of that band. Do you think the margin has some stability here? Or do you think that it could kind of dip below the bottom of that band in 2020?

Executive
David O'Toole

Brady, 2020 will be a challenge from a margin standpoint, probably for all of us in this industry, a little bit in a flat rate environment. We do think it'll stabilize a little bit, probably come back up a little bit in the first quarter, because of the maturity of a large portion of our CD portfolio, which will be repriced significantly downward. So we're hopefully, we can sneak back inside the band and hold it for next year, but it could be a little bit of a challenge.

Analyst
Brady Gailey

All right. And then just to be clear on the net charge-off in the fourth quarter that's related to the liquor distributor that we've been talking about?

Executive
David O'Toole

Primarily, the fourth quarter charge-off was related to that -- that credit.

Analyst
Brady Gailey

Okay. And where do we stand with that credit now? How big is the loan? And how big is the reserves/net charge-off held against it?

Executive
Mike Maddox

Well, the credit is about $27 million. But we're not going to talk specifically about the reserves we have on individual credits. We continue to monitor the credit and work with the borrower. We've continue to increase our specific reserve, as it relates to that credit, and we will continue to work through it.

Analyst
Brady Gailey

All right. That makes sense. Anyway, we've seen -- there was another nice quarter from a loan growth perspective. You guys keep printing these 20% plus loan growth quarters, about a $180 million of loan growth on average for the last few quarters. Does that feel sustainable as we look towards 2020?

Executive
Mike Maddox

Well, we continue to see a strong pipeline. We are concerned about the point at which we are in the credit cycle. We're going to be prudent. But we're going to continue trying to execute, and all of our markets continue to see good opportunities.

Executive
George F. Jones

Brady, we're going to -- we're going to be within 5% plus or minus probably of that number we gave you guys early -- we gave you guys earlier around 20%. So, we feel good about the opportunity that's out there. But again, as Mike said, you've got to remember, we got to be very cautious about the credit cycle and where we are. We're in the eighth or ninth inning, and let's be careful. We don't need any any surprises.

Analyst
Brady Gailey

Yeah. And then, George, about a month ago, we had some big news in Dallas with your previous employer. Is that