GlobeNewswire Inc | Oct 20, 2020 04:02PM EDT

October 20, 2020

LEAWOOD, Kan., Oct. 20, 2020 (GLOBE NEWSWIRE) -- CrossFirst Bankshares, Inc. (Nasdaq: CFB), the bank holding company for CrossFirst Bank, today reported its results for the third quarter of 2020, including net income of $8.0 million, or $0.15 per diluted share, and year-to-date 2020 net income of $4.5 million, or $0.09 per diluted share. In addition, the Company announced today that its Board of Directors also approved a $20 million program to repurchase CrossFirst's common stock.

"As we continue to serve our clients and communities in extraordinary ways, we are maintaining our focus on credit quality and being well capitalized, due to the on-going economic volatility caused by the pandemic and upcoming elections. Our overall operating performance remained strong, while we continued to prudently provision an additional $10.9 million, commensurate with the risk in our portfolio and to strengthen the balance sheet," said CrossFirsts CEO and President Mike Maddox. "We are continuing to create operational efficiencies in our organization to offset margin compression and increased provisioning so we can emerge from the downturn a much stronger Company. We believe that the Company is well positioned to benefit from an economic recovery, continue increasing earnings power, and deliver long term value to our shareholders."

Third Quarter 2020 Highlights:

-- $5.5 billion of assets with 11% operating revenue growth compared to the third quarter of 2019 -- Pre-tax, pre-provision profit, a non-GAAP financial measure, for the third quarter of $20.4 million and year-to-date pre-tax, pre-provision profit of $51.3 million -- Efficiency ratio of 53% for the third quarter of 2020 and a non-GAAP core efficiency ratio of 52% after adjusting for nonrecurring or non-core items -- $64 million of loan growth from the previous quarter and $854 million or 23% over the last twelve months -- $188 million of deposit growth from the previous quarter and $834 million or 23% over the last twelve months -- Book value per share of $11.84 at September30, 2020 compared to $11.59 at September30, 2019

Quarter-to-Date Year-to-Date September 30, September 30, 2019 2020 2019 2020 (Dollars in millions except per share data)Operating revenue^(1) $ 39.0 $ 43.4 $ 110.8 $ 127.5 Net income $ 10.4 $ 8.0 $ 29.2 $ 4.5 Diluted earnings per $ 0.21 $ 0.15 $ 0.61 $ 0.09 share Return on average assets 0.89 % 0.58 % 0.89 % 0.11 %Non-GAAP core operatingreturn on average assets^ 0.89 % 0.58 % 0.86 % 0.30 %(2)Return on average common 7.58 % 5.19 % 7.76 % 0.98 %equityNon-GAAP return onaverage tangible common 7.68 % 5.19 % 7.89 % 0.99 %equity^(2)Net interest margin 3.19 % 2.93 % 3.29 % 3.08 %Net interest margin, 3.24 % 2.98 % 3.35 % 3.13 %fully tax-equivalent^(3)Efficiency ratio 54.29 % 53.03 % 59.36 % 59.44 %Non-GAAP core operatingefficiency ratio, fully 53.43 % 52.23 % 58.16 % 53.14 %tax-equivalent^(2)(3)^(1) Net interest income plus non-interest income.^(2) Represents a non-GAAP measure. See "Table 5. Non-GAAP Financial Measures"for a reconciliation of this measure.^(3) Tax exempt income is calculated on a tax-equivalent basis. Tax-freemunicipal securities are exempt from federal income taxes. The incrementalfederal income tax rate used is 21.0%.

Share Repurchase Program The Company's Board of Directors has approved up to $20 million in share repurchases. Repurchases under the Company's new program will be made in open market or privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18, subject to market conditions, applicable legal requirements, and other relevant factors. This share repurchase plan does not obligate the Company to acquire any particular amount of common stock, and it may be suspended at any time at the Company's discretion. CrossFirst had 52,195,778 shares of common stock outstanding as of September 30, 2020.

COVID-19 Update The COVID-19 pandemic and measures taken in response have created economic uncertainty and negatively impacted most of our customers in some capacity. During the third quarter of 2020, we continued to operate in accordance with our comprehensive pandemic plan, which includes social distancing measures for customers and employee interactions. In addition, the Company has continued to support key regulatory relief programs for customers, increased provisions for loan losses, increased monitoring of key loan portfolio segments, modified loans, experienced slower discretionary spending, optimized staffing levels, and elevated its risk management activities. Our branch-lite strategy, technology, and relationship banking model, have allowed us to effectively operate through the pandemic, work remotely, and provide us with the agility to effectively serve our customers when they need it most. The Company continues to assess and monitor the COVID-19 pandemic and federal and local requirements in evaluating the full re-opening of its offices and remains flexible regarding process and timeline.

Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Programs

CrossFirst is committed to helping our local businesses and the communities that we serve during these extremely challenging times and will continue to help customers access regulatory relief and other programs. As of September30, 2020, the Company still retains $369 million in loans produced through the Paycheck Protection Program ("PPP") and has been working through the forgiveness process for those loans with the Small Business Administration ("SBA"). In addition to the PPP, we have been granting loan modifications and 90/180 day payment deferrals for many customers who have requested additional relief. As of September30, 2020, the Company continues to have $318 million in loans on modified payments related to COVID-19 on its balance sheet, which, excluding the PPP loans, represents almost 8% of our total loan balances. We are evaluating each modification on a case-by-case basis and assessing the borrowers' willingness and capacity to support the loan until maturity. The Company will continue to implement additional governmental assistance programs as more details become available around the processes and procedures for such programs and grant loan modifications when appropriate.

Income from Operations

Net Interest Income

The Company produced interest income of $48.5 million for the third quarter of 2020, a decrease of 13% from the third quarter of 2019 and a decrease of 5% from the previous quarter. Interest income was down from the third quarter of 2019 primarily due to declining interest rates. Average earning assets totaled $5.3 billion for the third quarter of 2020, an increase of $1 billion or 20% from the same quarter in 2019. The tax-equivalent yield on earning assets declined from 5.00% to 3.66% during the third quarter of 2020, compared to the third quarter of 2019, primarily due to the movement of variable rate assets indexed to declining market rates and the movement of loans to nonaccrual. Year-to-date, the Company produced interest income of $153.9 million as the Company's asset growth was able to mitigate some of the impact of yield declines on earning assets.

Interest expense for the third quarter of 2020 was $9.1 million, or 54% lower than the third quarter of 2019 and 10% lower than the previous quarter. While average interest-bearing deposits increased to $3.6 billion in the third quarter of 2020, an increase of 15% from the same quarter in 2019, overall interest expense on interest-bearing deposits declined as a result of declining interest rates. Non-deposit funding costs increased to 1.50% from 1.35% in the second quarter of 2020 while overall cost of funds for the quarter was 0.75%, compared to 0.85% for the second quarter of 2020. Year-to-date, the Company had interest expense of $35.2 million, a decrease of 38% from the same period in the prior year.

Tax-equivalent net interest margin decreased to 2.98% in the the current quarter, from 3.19% in the previous quarter and declined from 3.24% in the same quarter in 2019, reflecting the impact of the declining rate environment, changes in macro economic conditions, and lower loan yields from having an increased number of loans on non accrual. Year-to-date, the Company had a tax equivalent margin of 3.13% compared to 3.35% over the same period in the prior year. As of September30, 2020, CrossFirst has realized $3.2 million of the total $9.9 million in fees anticipated from holding the $369 million of PPP loans, which yielded 2.26% for the quarter, and the Company will continue to recognize these fees as the loans are forgiven. The tax-equivalent adjustment, which accounts for income taxes saved on the interest earned on nontaxable securities and loans, was $0.7 million for the third quarter of 2020. Net interest income totaled $39.3 million for the third quarter of 2020 or 4% lower than the second quarter of 2020, and 10% higher than the third quarter of 2019.

Non-Interest Income

Non-interest income increased $0.9 million in the third quarter of 2020 or 26% compared to the same quarter of 2019 and increased $1.4 million or 54% compared to the second quarter of 2020. While the Company continued to increase overall fee income commensurate with its customer growth, during the third quarter of 2020, it also recorded $1 million of securities gains or $0.7 million more than the previous quarter. The back-to-back swap fee income continued to remain low in the current interest rate environment; however, credit card fees continued to be a major contributor to other non-interest income growth for the quarter. Year-to-date non-interest income increased 35% compared to the same period in the prior year.

Non-Interest Expense

Non-interest expense for the third quarter of 2020 was $23.0 million which increased 9% compared to the third quarter of 2019 and decreased 26% from the second quarter of 2020. The Company recorded a $7.4 million expense related to a non-cash goodwill impairment charge in the previous quarter of 2020 primarily as a result of economic and industry conditions at June 30, 2020. In addition, during the third quarter of 2020, the Company optimized its staffing levels, which is anticipated to generate $4.1 million of annualized savings going forward. The Company expects the full impact of the expense reductions to be realized in the fourth quarter. In addition, the Company continues to realize the benefits from reduced travel, entertainment, and other discretionary spending as a result of the COVID-19 pandemic. Year-to-date non-interest expense increased 16% compared to the same period in the prior year primarily from non reoccurring items reported in previous quarters .

CrossFirsts effective tax rate for the third quarter of 2020 was 16% as compared to 20% for the third quarter of 2019. The 2020 quarter-to-date income tax was impacted by a $3.5 million decrease in income before income taxes that reduced taxes at the statutory rate by $1 million. For both of the comparable periods, the Company continued to benefit from the tax-exempt municipal bond portfolio and bank-owned life insurance.

Balance Sheet Performance & Analysis

During the third quarter of 2020, total assets increased by $43 million or 1% compared to June30, 2020 and $854 million or 18% since September30, 2019. During the third quarter of 2020, total available for sale investment securities decreased $48 million to $652 million compared to June30, 2020, while the overall average for the third quarter was $698million. During the third quarter of 2020, tax-exempt municipal securities on average increased $2 million and mortgage-backed securities decreased $32 million compared to June30, 2020. The securities yields declined 14 basis points to a tax equivalent yield of 2.93% for the third quarter of 2020 compared to the prior quarter as a result of lower reinvestment yields and prepayments on mortgage-backed securities increasing premium amortizations.

Loan Growth Results

The Company experienced average loan growth of 3% during the third quarter of 2020, but has increased average loans 26% year over year from September30, 2019. Loan yields declined 38 basis points during the third quarter commensurate with the effects from adjustable rate loan movements in LIBOR and Prime during 2020, lower loan yields from the PPP, and the impact of increased loans on nonaccrual.

QoQ QoQ YoY YoY(Dollars in 3Q19 4Q19 1Q20 2Q20 3Q20 % of Growth Growth Growth Growthmillions) Total ($) (%)^ ($) (%)^ (1) (1)Averageloans (gross)Commercial $ 1,284 $ 1,315 $ 1,339 $ 1,381 $ 1,308 29 % $ (73 ) (5 ) % $ 24 2 %Energy 389 400 412 404 393 9 (11 ) (3 ) 4 1 Commercial 974 1,007 1,034 1,115 1,169 26 54 5 195 20 real estateConstructionand land 487 599 620 651 617 14 (34 ) (5 ) 130 27 developmentResidential 362 384 455 517 583 13 66 13 221 61 real estatePaycheckProtection ? ? ? 245 362 8 117 48 362 NA ProgramConsumer 45 45 45 44 45 1 1 1 ? ? Total $ 3,541 $ 3,750 $ 3,905 $ 4,357 $ 4,477 100 % $ 120 3 % $ 936 26 % Yield onloans for 5.53 % 5.21 % 4.98 % 4.28 % 3.90 % the periodending^(1) Actual unrounded values are used to calculate the reported percentdisclosed. Accordingly, recalculations using the amounts in millions asdisclosed in this release may not produce the same amounts.

Deposit Growth & Other Borrowings

The Company continues to maintain a traditional deposit mix, with the goal of keeping pace with growth in the loan portfolio. Deposit growth continued to be funded primarily with money market accounts during the third quarter of 2020, which have historically adjusted with movements in Federal Funds rates. The Company has continued to have its transaction deposits increase as a result of more customers utilizing our insured cash sweep products. The Company's cost of interest bearing deposits declined 15 basis points, during the third quarter of 2020, reflective of changes made to deposit pricing in the prior quarter from declines in market rates.

(Dollars in % of QoQ QoQ YoY YoYmillions) 3Q19 4Q19 1Q20 2Q20 3Q20 Total Growth Growth Growth Growth ($) (%)^(1) ($) (%)^(1)Average deposits Non-interest $ 535 $ 522 $ 540 $ 746 $ 714 16 % $ (32 ) (4 ) % $ 179 33 %bearing depositsTransaction 135 200 341 414 460 11 % 46 11 % 325 241 %depositsSavings andmoney market 1,744 1,854 1,887 1,933 1,995 46 % 62 3 % 251 14 %depositsTime deposits 1,277 1,226 1,166 1,195 1,175 27 % (20 ) (2 ) % (102 ) (8 ) %Total $ 3,691 $ 3,802 $ 3,934 $ 4,288 $ 4,344 100 % $ 56 1 % $ 653 18 % Cost of depositsfor the period 1.94 % 1.70 % 1.46 % 0.79 % 0.67 % endingCost ofinterest-bearingdeposits for 2.26 % 1.97 % 1.69 % 0.95 % 0.80 % the periodending^(1) Actual unrounded values are used to calculate the reported percentdisclosed. Accordingly, recalculations using the amounts in millions asdisclosed in this release may not produce the same amounts.

At September30, 2020, other borrowings totaled $350.6 million, as compared to $501.4 million at June 30, 2020, and $358.5 million as of September30, 2019.

Asset Quality Position

Overall credit quality metrics were elevated as the Company added $10.9 million to the allowance for loan loss, during the third quarter of 2020, commensurate with adverse movement of risk classifications and to strengthen the balance sheet as there remains continued economic uncertainty resulting from the COVID-19 pandemic and volatility in energy prices. While the Company currently believes the reserve is reflective of the risk in the portfolio, there may be cases where the borrowers or specific impairments related to COVID-19 may have not yet been identified. The majority of loans that migrated to classified status during the quarter were related to the energy portfolio and one commercial and industrial credit.

Net charge-offs were $6.0 million for the third quarter of 2020 as compared to net charge-offs of $1.3 million for the second quarter in 2020. Nonperforming assets to total assets quarter over quarter increased to 1.49% primarily as a result of several energy loans that moved to non-accrual. The elevated charge-offs and increase in nonperforming assets in the third quarter were primarily from a large commercial and industrial credit that moved to nonperforming as it was being restructured, but was completed subsequent to the quarter end. The following table provides information regarding asset quality.

Asset quality (Dollars in 3Q19 4Q19 1Q20 2Q20 3Q20millions)Non-accrual loans $ 43.6 $ 39.7 $ 26.3 $ 37.5 $ 75.6 Other real estate owned 2.5 3.6 3.6 2.5 2.3 Non-performing assets 46.7 47.9 29.9 40.3 82.2 Loans 90+ days past due 0.6 4.6 ? 0.2 4.3 and still accruingLoans 30 - 89 days past 64.7 6.8 19.5 34.9 45.4 dueNet charge-offs 4.7 5.5 19.4 1.3 6.0 (recoveries) Asset quality metrics (%) 3Q19 4Q19 1Q20 2Q20 3Q20 Non-performing assets to 1.00 % 0.97 % 0.59 % 0.74 % 1.49 %total assetsAllowance for loan loss to 1.18 1.48 1.29 1.61 1.70 total loansAllowance for loan loss to 97 129 196 189 95 non-performing loansNet charge-offs(recoveries) to average 0.53 0.58 2.00 0.12 0.54 loans^(1)Provision to average loans 0.54 2.05 1.44 1.94 0.97 ^(1)Classified Loans / (Total 13.2 13.2 15.8 34.9 43.2 Capital + ALLL)^(1) Interim periods annualized.

Depending upon the future impact of the COVID-19 pandemic, we may need to make additional increases to our provision in future periods. The future impact of the pandemic is highly uncertain and cannot be fully predicted. The extent of the impact on our customers and, in turn, on our business and operations, will depend on future developments, including actions taken to contain the pandemic. To the extent the pandemic continues to cause a recession or decreased economic activity for an extended time period, we expect our business and operations will be negatively impacted. Customers may continue to seek additional loan modifications or restructuring, or we may experience additional adverse movement in risk classifications, any of which could potentially result in the need to adjust the total allowances for loan losses.

Capital Position At September30, 2020, stockholders' equity totaled $618 million, or $11.84 per share, compared to $602 million, or $11.58 per share, at December 31, 2019. Tangible common equity was $618 million and tangible book value per share was $11.83 at September30, 2020, compared to tangible common equity of $594 million and tangible book value per common share of $11.43 at December 31, 2019.

The ratio of common equity Tier 1 capital to risk-weighted assets was approximately 12% and the total capital to risk-weighted assets was approximately 13% at September30, 2020. The Company remains well capitalized.

Conference Call and Webcast

CrossFirst will hold a conference call and webcast to discuss third quarter 2020 results on Tuesday, October 20, 2020, at 4 p.m. CDT / 5 p.m. EDT. The conference call and webcast may also include discussion of Company developments, forward-looking statements and other material information about business and financial matters. Investors, news media, and other participants should register for the call or audio webcast at https://investors.CrossFirstBankshares.com. Participants may dial into the call toll-free at (877) 621-5851 from anywhere in the U.S. or (470) 495-9492 internationally, using conference ID no. 4184367. Participants are encouraged to dial into the call or access the webcast approximately 10 minutes prior to the start time.

A replay of the webcast will be available on the Company's website. A replay of the conference call will be available two hours following the close of the call until October 27, 2020, accessible at (855) 859-2056 with conference ID no. 4184367.

Cautionary Notice about Forward-Looking Statements

The financial results in this press release reflect preliminary, unaudited results, which are not final until the Companys Quarterly Report on Form 10-Q is filed. This earnings release contains forward-looking statements. These forward-looking statements reflect the Company's current views with respect to, among other things, future events and its financial performance. Any statements about managements expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as anticipate, believes, can, could, may, predicts, potential, should, will, estimate, plans, projects, continuing, ongoing, expects, intends and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements.

Accordingly, the Company cautions you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. Such factors include, without limitation, those listed from time to time in reports that the Company files with the Securities and Exchange Commission as well as the uncertain impact of the COVID-19 pandemic. These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.

About CrossFirst

CrossFirst Bankshares, Inc., is a Kansas corporation and a registered bank holding company for its wholly owned subsidiary CrossFirst Bank, which is headquartered in Leawood, Kansas. CrossFirst Bank has eight full-service banking offices primarily along the I-35 corridor in Kansas, Missouri, Oklahoma and Texas.

CROSSFIRST BANKSHARES, INC. CONTACT:Matt Needham, Investor Relations/Media Contact(913) 312-6822 https://investors.crossfirstbankshares.com

Unaudited Financial Tables

-- Table 1. Consolidated Balance Sheets -- Table 2.Consolidated Statements of Income -- Table 3. 2019-2020 Year-to-Date Analysis of Changes in Net Interest Income -- Table 4. 2019 - 2020 Quarterly Analysis of Changes in Net Interest Income -- Table 5. Non-GAAP Financial Measures

TABLE 1. CONSOLIDATED BALANCE SHEETS

December September 31, 2019 30, 2020 (unaudited) (Dollars in thousands)Assets Cash and cash equivalents $ 187,320 $ 223,636Available-for-sale securities - taxable 298,208 214,735Available-for-sale securities - tax-exempt 443,426 437,411Loans, net of allowance for loan losses of $56,896and $76,035 at December 31, 2019 and September30, 3,795,348 4,401,7742020, respectivelyPremises and equipment, net 70,210 70,599Restricted equity securities 17,278 20,923Interest receivable 15,716 19,003Foreclosed assets held for sale 3,619 2,349Deferred tax asset 13,782 15,864Goodwill and other intangible assets, net 7,694 227Bank-owned life insurance 65,689 67,063Other 12,943 32,112Total assets $ 4,931,233 $ 5,505,696Liabilities and stockholders? equity Deposits Noninterest bearing $ 521,826 $ 754,172Savings, NOW and money market 2,162,187 2,597,691Time 1,239,746 1,140,686Total deposits 3,923,759 4,492,549Federal funds purchased and repurchase agreements 14,921 13,531Federal Home Loan Bank advances 358,743 336,100Other borrowings 921 952Interest payable and other liabilities 31,245 44,681Total liabilities 4,329,589 4,887,813Stockholders? equity Common stock, $0.01 par value: authorized - 200,000,000 shares, issued - 51,969,203and 52,195,778 shares at December 31, 2019 and 520 521September30, 2020, respectivelyAdditional paid-in capital 519,870 522,226Retained earnings 64,803 69,355Accumulated other comprehensive income 16,451 25,781Total stockholders? equity 601,644 617,883Total liabilities and stockholders? equity $ 4,931,233 $ 5,505,696

TABLE 2. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended Nine Months Ended September 30, September 30, 2019 2020 2019 2020 (Dollars in thousands except per share data)Interest Income Loans, including fees $ 49,327 $ 43,929 $ 142,319 $ 138,591Available for sale securities Available for sale securities - 1,991 1,042 6,646 4,174TaxableAvailable for sale securities - 2,969 3,186 8,820 9,758Tax-exemptDeposits with financial 970 47 2,452 583institutionsDividends on bank stocks 272 248 801 808Total interest income 55,529 48,452 161,038 153,914Interest Expense Deposits 18,003 7,298 51,421 29,975Fed funds purchased and 74 54 501 162repurchase agreementsAdvances from Federal Home Loan 1,629 1,749 4,739 4,980BankOther borrowings 37 24 112 85Total interest expense 19,743 9,125 56,773 35,202Net Interest Income 35,786 39,327 104,265 118,712Provision for Loan Losses 4,850 10,875 10,550 45,825Net Interest Income after 30,936 28,452 93,715 72,887Provision for Loan LossesNon-Interest Income Service charges and fees on 72 792 441 1,947customer accountsGain on sale of available for 34 1,012 467 1,725sale securitiesImpairment of premises and ? ? (424 ) ?equipment held for saleGain on sale of loans 49 ? 207 ?Income from bank-owned life 476 464 1,416 1,373insuranceSwap fee income, net 1,879 121 2,415 80ATM and credit card interchange 476 1,482 1,312 2,863incomeOther non-interest income 226 192 695 804Total non-interest income 3,212 4,063 6,529 8,792Non-Interest Expense Salaries and employee benefits 14,256 14,628 43,296 43,022Occupancy 2,080 2,144 6,301 6,274Professional fees 427 1,132 1,923 3,098Deposit insurance premiums 302 1,096 2,020 3,151Data processing 649 652 1,868 2,065Advertising 580 147 1,770 870Software and communication 900 959 2,407 2,772Foreclosed assets, net 8 20 33 1,174Goodwill impairment ? ? ? 7,397Other non-interest expense 1,970 2,233 6,145 6,421Total non-interest expense 21,172 23,011 65,763 76,244Net Income Before Taxes 12,976 9,504 34,481 5,435Income tax expense 2,592 1,498 5,308 928Net Income 10,384 8,006 $ 29,173 $ 4,507Basic Earnings Per Share $ 0.22 $ 0.15 $ 0.63 $ 0.09Diluted Earnings Share $ 0.21 $ 0.15 $ 0.61 $ 0.09

TABLE 3. YEAR-TO-DATE ANALYSIS OF CHANGES IN NET INTERESTINCOME(UNAUDITED)

Nine Months Ended September 30, 2019 2020 Interest Average Interest Average Average Income / Yield / Average Income / Yield / Balance Expense Rate^ Balance Expense Rate^ (3) (3) (Dollars in thousands)Interest-earning assets:Securities - taxable $ 334,272 $ 7,447 2.98 % $ 285,363 $ 4,982 2.33 %Securities - 378,651 10,672 3.77 443,506 11,807 3.56 tax-exempt^(1)Federal funds sold 18,714 345 2.46 1,364 18 1.73 Interest-bearingdeposits in other 135,030 2,107 2.09 170,316 566 0.44 banksGross loans, net of 3,373,118 142,319 5.64 4,248,520 138,591 4.36 unearned income^(2)Totalinterest-earning 4,239,785 $ 162,890 5.14 % 5,149,069 $ 155,964 4.05 %assets^(1)Allowance for loan (41,329 ) (64,896 ) lossesOthernon-interest-earning 196,900 218,797 assetsTotal assets $ 4,395,356 $ 5,302,970 Interest-bearing liabilitiesTransaction deposits $ 127,785 $ 1,139 1.19 % $ 404,967 $ 1,391 0.46 %Savings and money 1,616,558 27,326 2.26 1,938,669 11,689 0.81 market depositsTime deposits 1,249,219 22,956 2.46 1,178,632 16,895 1.91 Totalinterest-bearing 2,993,562 51,421 2.30 3,522,268 29,975 1.14 depositsFHLB and short-term 366,708 5,240 1.91 456,048 5,145 1.51 borrowingsTrust preferredsecurities, net of 895 112 16.74 933 82 11.81 fair valueadjustmentsNon-interest-bearing 508,888 ? ? 668,208 ? ? depositsCost of funds 3,870,053 $ 56,773 1.96 % 4,647,457 $ 35,202 1.01 %Other liabilities 22,762 42,731 Stockholders? equity 502,541 612,782 Total liabilitiesand stockholders' $ 4,395,356 $ 5,302,970 equityNet interest income^ $ 106,117 $ 120,762 (1)Net interest spread^ 3.18 % 3.04 %(1)Net interest margin^ 3.35 % 3.13 %(1)^(1) Tax exempt income is calculated on a tax equivalent basis. Tax-freemunicipal securities are exempt from federal income taxes. The incrementalincome tax rate used is 21.0%.^(2) Average loan balances include nonaccrual loans.^(3) Actual unrounded values are used to calculate the reported yield or ratedisclosed. Accordingly, recalculations using the amounts in thousands asdisclosed in this release may not produce the same amounts.

YEAR-TO-DATE VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED) Nine Months Ended September 30, 2020 over 2019 Average Yield/Rate Net Change^ Volume (2) (Dollars in thousands)Interest Income Securities - taxable $ (993 ) $ (1,472 ) $ (2,465 )Securities - tax-exempt^(1) 1,759 (624 ) 1,135 Federal funds sold (247 ) (80 ) (327 )Interest-bearing deposits in other 443 (1,984 ) (1,541 )banksGross loans, net of unearned income 32,557 (36,285 ) (3,728 )Total interest income^(1) 33,519 (40,445 ) (6,926 )Interest Expense Transaction deposits 1,287 (1,035 ) 252 Savings and money market deposits 4,632 (20,269 ) (15,637 )Time deposits (1,236 ) (4,825 ) (6,061 )Total interest-bearing deposits 4,683 (26,129 ) (21,446 )FHLB and short-term borrowings 1,135 (1,230 ) (95 )Trust preferred securities, net of 4 (34 ) (30 )fair value adjustmentsTotal interest expense 5,822 (27,393 ) (21,571 )Net interest income^(1) $ 27,697 $ (13,052 ) $ 14,645 ^(1) Tax exempt income is calculated on a tax equivalent basis. Tax-freemunicipal securities are exempt from federal income income taxes. Theincremental income income tax rate used is 21.0%.^(2) The change in interest not due solely to volume or rate has been allocatedin proportion to the respective absolute dollar amounts of the change in volumeor rate.

TABLE 4. 2019 - 2020 QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME (UNAUDITED)

Three Months Ended September 30, 2019 2020 Interest Average Interest Average Average Income / Yield / Average Income / Yield / Balance Expense Rate^ Balance Expense Rate^ (3) (3) (Dollars in thousands)Interest-earning assets:Securities - taxable $ 335,045 $ 2,263 2.68 % $ 257,637 $ 1,290 1.99 %Securities - 392,644 3,592 3.63 440,669 3,855 3.48 tax-exempt^(1)Federal funds sold 16,315 89 2.16 ? ? ? Interest-bearingdeposits in other 171,913 881 2.03 166,423 47 0.11 banksGross loans, net ofunearned income^(2) 3,540,707 49,327 5.53 4,477,211 43,929 3.90 (3)Totalinterest-earning 4,456,624 $ 56,152 5.00 % 5,341,940 $ 49,121 3.66 %assets^(1)Allowance for loan (43,327 ) (75,970 ) lossesOthernon-interest-earning 197,661 220,282 assetsTotal assets $ 4,610,958 $ 5,486,252 Interest-bearing liabilitiesTransaction deposits $ 134,987 $ 386 1.13 % $ 460,420 $ 260 0.22 %Savings and money 1,743,575 9,553 2.17 1,995,307 2,301 0.46 market depositsTime deposits 1,276,571 8,064 2.51 1,174,555 4,737 1.60 Totalinterest-bearing 3,155,133 18,003 2.26 3,630,282 7,298 0.80 depositsFHLB and short-term 345,794 1,703 1.95 479,475 1,803 1.50 borrowingsTrust preferredsecurities, net of 904 37 16.06 944 24 10.19 fair valueadjustmentsNon-interest-bearing 535,467 ? ? 714,337 ? ? depositsCost of funds 4,037,298 $ 19,743 1.94 % 4,825,038 $ 9,125 0.75 %Other liabilities 29,833 47,304 Total stockholders' 543,827 613,910 equityTotal liabilitiesand stockholders' $ 4,610,958 $ 5,486,252 equityNet interest income^ $ 36,409 $ 39,996 (1)Net interest spread^ 3.06 % 2.91 %(1)Net interest margin^ 3.24 % 2.98 %(1) ^(1) Tax exempt income is calculated on a tax equivalent basis. Tax-freemunicipal securities are exempt from federal income taxes. The incrementalincome tax rate used is 21.0%.^(2) Average loan balances include non-accrual loans.^(3) Actual unrounded values are used to calculate the reported yield or ratedisclosed. Accordingly, recalculations using the amounts in thousands asdisclosed in this release may not produce the same amounts.

QUARTER-TO-DATE VOLUME & RATE VARIANCE TO NET INTEREST INCOME (UNAUDITED) Three Months Ended September 30, 2020 over 2019 Average Yield/Rate Net Change Volume ^(2) (Dollars in thousands)Interest Income Securities - taxable $ (460 ) $ (513 ) $ (973 )Securities - tax-exempt^(1) 418 (155 ) 263 Federal funds sold (44 ) (45 ) (89 )Interest-bearing deposits in other banks (28 ) (806 ) (834 )Gross loans, net of unearned income 11,169 (16,567 ) (5,398 )Total interest income^(1) 11,055 (18,086 ) (7,031 )Interest Expense Transaction deposits 373 (499 ) (126 )Savings and money market deposits 1,198 (8,450 ) (7,252 )Time deposits (601 ) (2,726 ) (3,327 )Total interest-bearing deposits 970 (11,675 ) (10,705 )FHLB and short-term borrowings 553 (453 ) 100 Trust preferred securities, net of fair 1 (14 ) (13 )value adjustmentsTotal interest expense 1,524 (12,142 ) (10,618 )Net interest income^(1) $ 9,531 $ (5,944 ) $ 3,587 ^(1) Tax exempt income is calculated on a tax equivalent basis. Tax-freemunicipal securities are exempt from federal income taxes. The incrementalincome tax rate used is 21.0%^(2) The change in interest not due solely to volume or rate has been allocatedin proportion to the respective absolute dollar amounts of the change in volumeor rate.

TABLE 5. NON-GAAP FINANCIAL MEASURES

Non-GAAP Financial Measures In addition to disclosing financial measures determined in accordance with GAAP, the Company discloses non-GAAP financial measures in this release. The Company believes that the non-GAAP financial measures presented in this release reflect industry conventions, or standard measures within the industry, and provide useful information to the Company's management, investors and other parties interested in the Company's operating performance. These measurements should be considered in addition to, but not as a substitute for, financial information prepared in accordance with GAAP. We have defined below each of the non-GAAP measures we use in this release, but these measures may not be synonymous to similar measurement terms used by other companies.

CrossFirst provides reconciliations of these non-GAAP measures below. The measures used in this release include the following:

We calculate "return on average tangible common equity" as net income (loss) available to common stockholders divided by average tangible common equity.? Average tangible common equity is calculated as average common equity less average goodwill and intangibles and average preferred equity. The most directly comparable GAAP measure is return on average common equity.

We calculate ??non-GAAP core operating income (loss)?? as net income (loss)? adjusted to remove non-recurring or non-core income and expense items related to:

Impairment charges associated with two buildings that were held-for-sale. We acquired a new, larger corporate headquarters to accommodate our business needs, which eliminated the need for two smaller support buildings. The two smaller support buildings had been ? acquired recently and were extensively remodeled, which resulted in a difference between book and market value for those assets. We sold one of the buildings in 2018. The remaining building was sold during the second quarter of 2019.

State tax credits as a result of the purchase and improvement of our new ? corporate headquarters.

Goodwill impairment - We performed an interim review of goodwill as of ? June 30, 2020. The book value of goodwill exceeded its fair market value and resulted in a full $7.4 million impairment.

The most directly comparable GAAP financial measure for non-GAAP core operating income (loss) is net income (loss).

We calculate "Non-GAAP core operating return on average assets" as non-GAAP core operating income (loss) (as defined above) divided by average assets.? The most directly comparable GAAP financial measure is return on average assets, which is calculated as net income (loss) divided by average assets.

We calculate ??non-GAAP core operating return on average common equity?? as non-GAAP core operating income (as defined above) less preferred dividends? divided by average common equity. The most directly comparable GAAP financial measure is return on average common equity, which is calculated as net income less preferred dividends divided by average common equity.

We calculate "tangible common stockholders' equity" as total stockholders'? equity less goodwill and intangibles and preferred equity. The most directly comparable GAAP measure is total stockholders' equity.

We calculate ??tangible book value per share?? as tangible common stockholders' equity (as defined above) divided by the total number of? shares outstanding. The most directly comparable GAAP measure is book value per share.

We calculate "non-GAAP core operating efficiency ratio - fully tax equivalent (FTE)" as non-interest expense adjusted to remove non-recurring non-interest expenses as defined above under non-GAAP core operating income? (loss) divided by net interest income on a fully tax-equivalent basis plus non-interest income adjusted to remove non-recurring non-interest income as defined above under non-GAAP core operating income. The most directly comparable financial measure is the efficiency ratio.

? We calculate "non-GAAP pre-tax pre-provision profit" as net income (loss) before taxes plus the provision for loan losses.

Quarter Ended Nine Months Ended 09/30/2019 12/31/2019 03/31/2020 06/30/2020 09/30/2020 09/30/2019 09/30/2020 (Dollars in thousands)Non-GAAP Return onaverage tangible common equity:Net income (loss)available to common $ 10,384 $ (700 ) $ 3,857 $ (7,356 ) $ 8,006 $ 28,998 $ 4,507 stockholdersAverage common 543,827 605,960 612,959 611,466 613,910 499,354 612,782 equityLess: averagegoodwill and 7,733 7,708 7,683 7,576 238 7,759 5,138 intangiblesAverage tangible 536,094 598,252 605,276 603,890 613,672 491,595 607,644 common equityReturn on average 7.58 % (0.46 ) % 2.53 % (4.84 ) % 5.19 % 7.76 % 0.98 %common equityNon-GAAP Return onaverage tangible 7.68 % (0.46 ) % 2.56 % (4.90 ) % 5.19 % 7.89 % 0.99 % common equity

Quarter Ended Nine Months Ended 09/30/ 12/31/ 03/31/ 06/30/2020 09/30/ 09/30/2019 09/30/ 2019 2019 2020 2020 2020 (Dollars in thousands)Non-GAAPcoreoperating income(loss):Net income $ 10,384 $ (700 ) $ 3,857 $ (7,356 ) $ 8,006 $ 29,173 $ 4,507(loss)Add: fixedasset ? ? ? ? ? 424 ?impairmentsLess: tax ? ? ? ? ? 109 ?effect^(1)Fixed assetimpairments, ? ? ? ? ? 315 ?net of taxAdd:Goodwill ? ? ? 7,397 ? ? 7,397impairment^(2)Add: statetax credit^ ? ? ? ? ? (1,361 ) ?(2)Non-GAAPcoreoperating $ 10,384 $ (700 ) $ 3,857 $ 41 $ 8,006 $ 28,127 $ 11,904income(loss) ^(1) Represents the tax impact of the adjustments above at a tax rate of 25.73%^(2) No tax effect

Quarter Ended Nine Months Ended 09/30/2019 12/31/2019 03/31/2020 06/30/2020 09/30/2020 09/30/2019 09/30/2020 (Dollars in thousands)Non-GAAP coreoperating return onaverage assets:Net income $ 10,384 $ (700 ) $ 3,857 $ (7,356 ) $ 8,006 $ 29,173 $ 4,507 (loss)Non-GAAP coreoperating 10,384 (700 ) 3,857 41 8,006 28,127 11,904 income (loss)Average assets $ 4,610,958 $ 4,809,579 $ 4,975,531 $ 5,441,513 $ 5,486,252 $ 4,395,356 $ 5,302,970 Return on 0.89 % (0.06 ) % 0.31 % (0.54 ) % 0.58 % 0.89 % 0.11 %average assetsNon-GAAP coreoperating 0.89 % (0.06 ) % 0.31 % ? % 0.58 % 0.86 % 0.30 % return onaverage assets

Quarter Ended Nine Months Ended 09/30/2019 12/31/2019 03/31/2020 06/30/2020 09/30/2020 09/30/2019 09/30/2020 (Dollars in thousands)Non-GAAP core operatingreturn on common equity:Net income (loss) $ 10,384 $ (700 ) $ 3,857 $ (7,356 ) $ 8,006 $ 29,173 $ 4,507 Non-GAAP core operating 10,384 (700 ) 3,857 41 8,006 28,127 11,904 income (loss)Less: Preferred stock ? ? ? ? ? 175 ? dividendsNet income (loss)available to common 10,384 (700 ) 3,857 (7,356 ) 8,006 28,998 4,507 stockholdersNon-GAAP core operatingincome (loss) 10,384 (700 ) 3,857 41 8,006 27,952 11,904 available to commonstockholdersAverage common equity $ 543,827 $ 605,960 $ 612,959 $ 611,466 $ 613,910 $ 499,354 $ 612,782 Return on average 7.58 % (0.46 ) % 2.53 % (4.84 ) % 5.19 % 7.76 % 0.98 %common equityNon-GAAP core operatingreturn 7.58 % (0.46 ) % 2.53 % 0.03 % 5.19 % 7.48 % 2.59 % on common equity

Quarter Ended 09/30/2019 12/31/2019 03/31/2020 06/30/2020 09/30/2020 (Dollars in thousands except per share data)Tangiblecommon stockholders'equity:Totalstockholders' $ 602,435 $ 601,644 $ 611,946 $ 608,092 $ 617,883equityLess:goodwill andother 7,720 7,694 7,669 247 227intangibleassetsTangiblecommon $ 594,715 $ 593,950 $ 604,277 $ 607,845 $ 617,656stockholders'equityTangible bookvalue per share:Tangiblecommon $ 594,715 $ 593,950 $ 604,277 $ 607,845 $ 617,656stockholders'equitySharesoutstanding 51,969,203 51,969,203 52,098,062 52,167,573 52,195,778at end ofperiodBook value $ 11.59 $ 11.58 $ 11.75 $ 11.66 $ 11.84per shareTangible bookvalue per $ 11.44 $ 11.43 $ 11.60 $ 11.65 $ 11.83share

Quarter Ended Nine Months Ended 09/30/2019 12/31/2019 03/31/2020 06/30/2020 09/30/2020 09/30/2019 09/30/2020 (Dollars in thousands)Non-GAAP CoreOperatingEfficiency Ratio - Fully TaxEquivalent(FTE)Non-interest $ 21,172 $ 21,885 $ 22,223 $ 31,010 $ 23,011 $ 65,763 $ 76,244 expenseLess: goodwill ? ? ? 7,397 ? ? 7,397 impairmentAdjustedNon-interest $ 21,172 $ 21,885 $ 22,223 $ 23,613 $ 23,011 $ 65,763 $ 68,847 expense(numerator)Net interest 35,786 37,179 38,228 41,157 39,327 104,265 118,712 incomeTax equivalentinterest 624 670 695 685 669 1,852 2,050 income^(1)Non-interest 3,212 2,186 2,095 2,634 4,063 6,529 8,792 incomeAdd: fixedasset ? ? ? ? ? 424 ? impairmentsTotaltax-equivalent $ 39,622 $ 40,035 $ 41,018 $ 44,476 $ 44,059 $ 113,070 $ 129,554 income(denominator)Efficiency 54.29 % 55.60 % 55.11 % 70.81 % 53.03 % 59.36 % 59.44 %RatioNon-GAAP CoreOperatingEfficiency Ratio - 53.43 % 54.66 % 54.18 % 53.09 % 52.23 % 58.16 % 53.14 %Fully TaxEquivalent(FTE)^(1) Tax exempt income (tax-free municipal securities) is calculated on a taxequivalent basis. The incremental tax rate used is 21.0%

Quarter Ended Nine Months Ended 09/30/ 12/31/2019 03/31/ 06/30/2020 09/30/ 09/30/ 09/30/ 2019 2020 2020 2019 2020 (Dollars in thousands)Non-GAAPPre-Tax Pre-ProvisionProfitNet income(loss) before $ 12,976 $ (1,870 ) $ 4,150 $ (8,219 ) $ 9,504 $ 34,481 $ 5,435taxesAdd:Provision for 4,850 19,350 13,950 21,000 10,875 10,550 45,825loan lossesNon-GAAPPre-Tax $ 17,826 $ 17,480 $ 18,100 $ 12,781 $ 20,379 $ 45,031 $ 51,260Pre-ProvisionProfit