Earnings call transcript Q2 2023

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Operator

Good day, and welcome to the CrossFirst Bankshares, Inc.

Second Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

to Officer conference Relations. and like Daley, to now Accounting Chief Head would turn over the Mike I of Investor go ahead. Please

Mike Daley

earnings Good second to welcome conference XXXX morning, call. CrossFirst and quarter Bankshares'

subject be aware materially about our These acquisition risks comments financial actual statements plans, to of Before we Bancorporation, business and expectations begin, this will and and statements, to our opportunities, include growth results and that on from performance. Inc., uncertainties are current could statements. call assumptions expansion Canyon these based including forward-looking expected are and future please our cause differ

law. Our we made should call considered as do filings of update release on are together forward-looking any be risk SEC. factors other our with assume earnings date with by obligation our to statements the except of identified Statements and not and them, in or this this call, revise the the required as

A adjusted in We non-GAAP in our may found a prepared measures to These to refer earnings be GAAP. superior financial with are also financial release. or or to financial non-GAAP to reconciliation financial can substitute be meant measures accordance measures financial of GAAP measures not measures. for non-GAAP

a of CEO conclusion include our Mike will Bankshares. Clouse, prepared session. Ben remarks of our Our Q&A presentation CrossFirst and the Bankshares; Maddox, remarks, of Betsy, President from Randy and CrossFirst Bank; President CrossFirst facilitate will Rapp, CFO At operator, of

with four release. Mike, our the on this our will At presentation like would slide filed turn Mike? site, over time, I of earnings and Web who call to begin on the to available

Mike Maddox

relationship-driven we and second on to has an focus industry. stability delivering results been and business business top results. the efforts to to benefits Mike. despite communities. the recent and of desirable I you, client team. our value of on look financial Thank for time It our base, markets, opportunity turmoil, our liquidity to relentless of the this all reflect for extraordinary quarter mix, growing investors, challenging high-quality the clients, and our But banking employees, continue share are update an our model; shareholders, Deposit and mind balanced forward unprecedented

past the all grew capital, of value toward growth, and delivering and our expense our managed consistent a our earnings, delivered level optimized quarter, focused even company making During we base, long-term stronger. our

We to drive improvement and will approach as expenses additional grow. continue gain operating take a to to measured we leverage efficiency

higher million for Our $XX.X was or compressed team quarter. yields. than our net increased share asset the delivered adjusted income as Margin of per earning of funds $X.XX cost

the Reserve continue expect in continues rein pressured. we to As Federal inflation, that to will margin be

remain variable we loan see will the expectations rest However, for of that asset largely our stabilize margins slower given growth and year. portfolio we this optimistic

we economy and become expected, as As more moderated lending quarter on this loan the slows new growth even opportunities. selective our

remained deposit volatility Our base despite stable the in the industry.

year. relationship We team, strong the new building revenue on us last continues and nice quarter our customer relationships focus a banking Our SBA fee-based in acquisition we had serve a this by lending of increase highlight completed led to well.

focus our deposit profitability. income and continue loan we strategically to generation historically strong, have our our and to on While growth enhance revenue very been diversify fee

of portfolio the our quality are with for of our stress, pleased signs loan quarter. We monitoring and stability this are credit

remarks. cover also and credit more details Randy will We to build continue his on reserves, in

completing conversion the our remains and executing We team system serving initiatives. acquisition Arizona. Community I of to regulatory wholly have agreement on to Bank, owned our close credit banking received successful and Tucson, and subsidiary New approval platform, immediately our Community implementation monitoring strategic following, with the Bancorporation entered year our quality in Mexico we share clients, for its of digital into on a on Our Colorado focused Canyon acquisition, excited started the with am Canyon that the Canyon. definitive and

team planning We welcoming and towards look for forward and clients new working to closing and members. integration, are

of greater The lower-cost We goals and to acquisition to will complimentary is believe provide fourth Arizona. footprint geographic in opened market. acquisition the Arizona means the deposits, June, be Dallas expected an existing attractive Canyon liquidity, we our further the bank in in to expansion conveniently to In area, deposits. our which entered we metropolitan build opportunity where Frisco includes expand bank locations also Center, serve in and in located our XXXX, and an Texas Fort Preston we presence grow in continue relationships the we to market, to see Since the Worth. area,

have towards to made, we and and scaling the profitability on will and investments focused long-term We remain work driving optimizing continue return. shareholder

on be and operating to continues focus driving leverage. Our efficiency

continued made have strong, the locations necessary drive organic to and investments We in growth. technology, people,

that are improvement in Optimizing come. our investments continued We is to for in team's for but the should confident time overall I our industry, progress made second challenging value. earnings while the the banking in deliver provide clients, through working am a And quarters building quarter our ability franchise to in we important.

And call now, Rapp. our turn President Bank, CrossFirst over like I'd Randy to to the of

Randy Rapp

QX, intentionally mortgage. with Colorado morning and generation residential a New focused Mike, slow fee banking platform, and full which We income. full and Thanks, growth, Mexico quarter our teams, and to deposit good In SBA we quarter on for operated with includes everyone. digital and continued new highly loan our integrated and a remained

to We the and market are of our assess loan rates our conditions actively portfolio higher on monitoring borrowers. impact interest

areas The C&I, growth growth rate balanced Year-to-date, and to growth reported lending our estate, but X%, increased of our was loan energy. for the million, $XXX Turning real across well highlights, total diversified increase basis. across have of we the a loans quarter with on still XX% owner-occupied or growth almost QX X% annualized loan of activity slowed focus. an

have including made restaurant During from and the markets. growth Colorado finance, quarter, the talent, see continued we to areas we energy, in investments Phoenix, recently

continued loan to rates a reprice on economic continues had standards, uncertainty. and the is strong environment, are incorporating and Approximately strictly adhering tied have transition transactions we the the our to XX% market LIBOR interest Although nearly of activity, completed we index. higher that of of floating rates to as rate increase, all we impact loan underwriting portfolio

see to opportunities loans standards. at while maintaining widened continue our spreads, underwriting We price to

C&I utilization And prior consistent at the Average the average quarter. for now with was churn the historical is portfolio slightly, level. line quarter and increased XX%,

expect portfolio over increase slightly to We churn quarters. the several next

of Our now weighted loan This portfolio is with commercial XX% concentration remaining primarily total continues in portfolio million and natural in exposure a real concentration Energy remains or gas. in real to approximately estate. and remain portfolio. with to XX% diversified owner-occupied exposure estate, oil, the X% XX% the $XXX C&I

portfolios, exposure property is C&I type, industrial, highest within CRE total C&I, XX% six, majority The CRE $XXX those accounting manufacturing, with $XX the portfolio loans. suburban XX%, each of exposure. slide for loan exposure. to the average is industry And Turning total there Total is at largest and good remains average million X% and of office in million. diversity The is being loan-to-value XX% $X segment of or of of office largest is the office. million, this the

deposit the and Although footprint, our in strongest sponsors his previous statistics the to markets, centered billion, City, additional up remarks. million will from increased follow quarter, is $XXX the deposits $X.X Texas, we other Kansas X.X% portfolio quarter. Ben to cover in North of Through the in Colorado. majority exposure

of deposit for focus key Client on demand emphasis our with deposit company. generation an remains area a

this targeted continued lines to strategy newer deposit We tied and directly calling banking, of efforts Denver, are personnel, compensation In enhanced Preston multi-faceted a that business, and has of markets point verticals. on deposit relationship Center new in generation products new goal treasury built remains markets of incentive in consist executing to investments deposit and our locations and in the in and Dallas, Phoenix investment in our increasing like a management that forward. been penetration going like potential evaluating while strength foundation short,

Moving slide to credit on highlights seven.

million, the we is million QX, minimal from assets X.XX%. X.XX% in non-performing was increase total in non-performing. non-performing reported $X.X C&I period to of portfolio credits asset $XX.X non-performing primarily This from asset C&I remains For with down ratio increase exposure. resulting a ratio The same due of moving energy to primarily The XXXX. in two an very to

ORE. which ended the sold only we end property, compared the to have plus remaining During assets combined quarter, X.X% flat no Classified now relatively and capital QX. reserves QX is of the ORE to

a X basis and we charge-offs basis. For $XXX,XXX, net quarter, of basis of XX-month on trailing reported rate charge-off X annualized in a net resulting the points on an points basis

reserve slide X.X%. for and On unfunded seven, of reported and of loss allowance for for credit at an quarter ratio to commitments end loss combined credit allowance loan total X.XX%

and For the primarily charge-off QX during to rate the in expense by million, than improved XXX%. slightly provision resulting metrics. quarter, we was driven growth a quarter of lower of provision credit Provision loan $X.X lower reported

metrics maintaining to ACL current highly a of is moving total million, We on ratio our ACL credit XXX%. forward. focused remain $XX of loan With non-performing good

higher rates and portfolio our We continue the scrutinize inflation interest heavily of to on clients. to the loan assess impact

We in migration taxes. underwriting are projects and are but significant with of some interest who certain our prudent rates, standards operating have grade as equity in many sponsors, see CRE could cost, faced the contributions portfolio confident sectors higher property

deposit we loan We remain growth on in generation moderate focused the and income last expect of XXXX, half fee our to growth. will and rate continue to

over in detail. I'll results cover Ben now the to to financial call Ben? turn the more

Ben Clouse

million severance share, Both well provision GAAP $XX with offset Randy, net $X.XX lower per non-interest income consistent quarter per $X.XX good as Thanks, acquisition income adjusted was some by $XX.X GAAP morning, cost. everyone. non-interest or and margin net expenses the and as higher and prior this income was share. pressure Adjusted were income. net was or quarter as and million included which

the X% the equivalent from adjusted was return earnings average quarter in of to We outpacing of was lower from and benefits actions on margin on the on due interest expense Our loan yields, quarter higher $X.X return in to day. future. several and basis higher additional the the million acknowledged equity income compression drive tax cost assets, XX.X%. the took average assets higher average or a adjusted Net one profitability fully profitability first declined higher X% and funds

on cost well quarter. as compared the XX deposits loans. increased to pressure anticipated. of higher as basis cost Average funds yields higher The repricing $XXX on earning loans points deposits well assets as on of points million mix continued The the into increased as XX to due to products shifting new basis due prior increased yield

had through were we deposits quarter, that last of of some non-interest-bearing noted additional deployed most quarter clients. benefit the the I first As

narrowed decline net interest in Fully to equivalent change to those balances contributed to was in margin compared prior A taxed quarter net a the X.XX%. points interest XX basis income. the

in a range to full-year. to We for of X.X% margin expect the remain X.XX%

going deposits basis anticipated lower the the loan year. with We Our points our growth, slightly moves loan better rate to this managed with the And portfolios add don't to higher need balance through cost this categories better as XX align to peers. quarter basis XX we we only reflect forward. greater sensitive sheet anticipated is expect updated of presentation expected how and

nine, slide and in decline balance held the The percentage partially quarter to declined sheet. balance XX% slightly this end. of our with up fairly of of at demand deposits the well quarter our to total the Turning non-interest-bearing deposits growth ratio, attributable deposits of was

As to deposits continued we I client of through elevated noted, no But, with most demand of the we a quarter. client retention had experience losses level this good significant first quarter.

for Our of X.XX% was the total cost quarter. funds

quarter Our with total expectations. non-maturity our remained against second the rate through line in about deposit XX, beta increases

with Our terms prior and quarter deposit consistent composition. in of base diversification remained the

accounts. improved from XX% Our pass-through considering deposits uninsured percentage effective XX% slightly to when

improved concentration across deposit XX% XX%. the this clients also Our XX quarter top to from

majority managed our beta already. have this we results expectations our realized the cycle, of rate As we have in deposit through

primary SBA persist, loan move While our on market it for an of both are we acknowledge back NIM peak defend the capabilities. acquisition income pricing nearing fee and will competition our we we model was SBA into our from we But, forward improved. with to believe legacy income sales million of has not increasing or we deposit for and were for was The quarter. $X.X from loan allowing The markets. first from quarter, growth the deposits XX% Non-interest here. SBA heading originate-and-sell us enhanced moving million as And, favorable to are XXXX. $X.X gains the drivers sales

and first X%. to Moving expense both quarters, $XXX,XXX declined excluding or XX, acquisition severance non-interest the slide and expenses in second

expense. X% end At Accordingly, Going also quarter, XXXX. forward, net expenses to range of savings operating focused non-interest gaining non-interest on we of anticipated efficiencies additional about the and by of identified headcount reduced per the in are leverage. be million have additional the quarter anticipate we a to and for driving $XX million back-half $XX we in

to rate for for expect the XX% And, was XX% year. rate the tax we XX% in a remain to tax of Our quarter. range the

stockholders increase the increase available with offset totaled $XXX driven the sales million unrealized an for quarter, earnings, the equity by At partially on by been the securities. end of loss in

were end, well-capitalized commitments. quarter we earnings, advance we an and unfunded building capital under saw all of strong in are able this goal As quarter anticipated moderating asset capital ratios. to our as We growth, decline

We toward total ratios. are and XX% continuing to work CETX capital risk-based to XX%

the Our XX% some with prior liquidity consistent of quarter remains improvement asset. strong with to modest

on slide approximately $X.X outlined on we significant sources. and XX, we have off-balance liquidity of billion sheet As from

million In balance a to securities and our additional can $XXX million gain. addition the be sheet, AFS includes could to investment pledged net an of that the sell cash $XXX on at XXX% today we our we FHLB, portfolio have

the of funding billion. We FHLB, Reserve, also sheet multiple sources funds, off-balance Federal wholesale totaling other Fed capacity including sources $X.X of have approximately and additional liquidity,

of investment composition portfolio. the outlines XX our Slide

to moderate shift an portfolio the of will the in We liquidity ratio ongoing continue with in munis. increase our

anticipate as Canyon mentioned, we post-closing are working in of integration the quarter, Lastly, acquisition closing Mike and on the actively efforts. third

expect this on run a provide We deal than for to expected rate less and consideration and of minimal ratios. is the basis. earnings deal add about our year. liquidity, value book with additional about million the assets, X% impact and seller, be will partnership to on accretion a a dilution, opportunity value, $X.XX of in continued have $X.XX with anticipated The will will tangible book It an capital $XXX about earn-back

continued shifted a to growth in steady consistent client tough we a to deposits stable, and fit cost lower quarter, base quality, credit environment, level a the our for see leading to held of summary, In earnings environment. our

now portion we Operator, ready question-and-answer the are to begin the of call.

Operator

question-and-answer session. from Instructions] question begin We go Gailey with KBW. today [Operator comes first will the ahead. The now Please Brady

Brady Gailey

morning, thanks. guys. Hi, Good

Mike Maddox

morning, Brady. Good

Brady Gailey

on was income, the you gain pretty of nicely. loans up Ben, look if the in fee sale

model you SBA say to I think Ben an I shifted heard originate-and-sell now.

or rate? So, million, is think sale that forward? that about good a was a $X.X on the that you gain run good do going loans really quarter of How

Ben Clouse

Good morning, Brady, it's Ben.

was really half would with a rate on You're good a a And correct That pent $X.X be the basis of expectation next million. demand. about bit quarter for of run couple about quarters. up that our little of

Brady Gailey

And heard and gas, I are percent you're then XX% that huge energy space, the they're I then it's credit And weakness of especially nat lenders your XX% yes, all think some know credit of issues. -- oil, just not gas, loan that's right. I all some Okay, Are heard only think when CrossFirst, you you seeing at there? quality sort I I seeing gas know I at is seeing it's -- like a we X% nat to of loans. looking any are natural pretty book, small all that

Randy Rapp

not. well. movement higher price I you'll is rates, this metrics our energy bit advance try the table. some I portfolio Brady, that that are in portfolio really percentage little off think hedging and Randy. Hey, of see is is take very mean little holding No, one -- thing in to the lower current And

really not seeing So, migration we're Brady, there.

Brady Gailey

slowing, are seeing And growth is guys then your increases so in capital ratios. Okay. you

your I about away away Tier basis think you're your targeted XX risk points from base, targeted XX% XX basis and only like points XX% total Common X. Equity from

XX% roughly a So, the to given closer do as stock is value? share trading you book get of those start consider to buyback, at just you targets, tangible

Mike Maddox

discounted we get we continues once an you've on rate, trade Brady, think And now good of will a of our consider levels, and that. capital fairly Yes, certainly to some if being And we plan at stock focused and I have will those But a that's right advantage take question. conservative. that. we're to said, as building buyback we authorized

Brady Gailey

thanks Okay. All right, color. great, the for

Mike Maddox

you. Thank

Operator

next James. The from with Michael comes question Raymond go Rose Please ahead.

Michael Rose

Hey, good my for morning, taking guys. questions. Thanks

Mike Maddox

Good morning.

Michael Rose

Morning.

around to (ph) the go back [square guidance with the to wanted Just some year. for commentary the of it] margin, the

is but still appreciate left for we So, understand the for quarters I and outlook the two the range year. revised moving a pieces, of lot margin. the pretty have wide, there's

it little range. terminal But talk help wide is short-term, bit. the about outcomes the Can just reaching values given would a did here which growth You relatively a obviously still you betas range loan in of would love slowing what through I or then but just put I walk Thanks. help a finer and guess, below? to case would what would be, to be cause on it. us above think your can you pretty base just point

Ben Clouse

Michael. It's morning, Good Ben.

the So, our model, you, static would the tell balance I that range end on of in sheet. is upper

hold is mark deposit mix, can know, question be base well and our would we and current important. DDA as biggest then, incredibly the you So,

quarter. very had of some DDA first we so, clients end deploy some the at the And

haven't this of our we've and piece which DDA as would whole range. really lot that upper toward growth, quarter, the end comment on frankly to said, We the expect great is further support or that loan seen move other I'll which equation. Mike let is moderate. course, us Randy a being whole we of of But

the on on is be into like top fund we of had growth second to, bit won't to at adding in impact quarter, And range NIM end of as and little the that a aggressive deposits then to we price need certainly will other have the momentum quarter. loan first the

know you anything on don't or to there -- Randy, Mike want further say I if

Mike Maddox

add, I a feel I our NIM, Michael, would positive stabilized. on note DDA on like Yes, balances just have

that had in into about, large talked it who knew there. had we Ben DDA of and lot investments, As the exits was had other first of transition sitting two to going out customers quarter. We their a businesses We did.

second in I think But mix So, stabilized. a do our the have balances DDA our quarter. that changed bit

refinancing. of we think renewals catch yields loan some will our as and have I up

through improve to the ought yields loan the our rest anticipate year. I So, of

be same margin, going get kind we've a seen that back it bottoming direction. hopeful able and to I'm may of of we So, the

like pressure the And to of is -- we're end be hiking getting thing the raising less rate banks will other I on deposit be less costs. feel I think closer The there'll cycle.

hopeful below keep at where continue it is I'm So, our beta to can we today.

Randy Rapp

finish our as Yes, really now seeing low-to-mid Xs, Xs. Randy. and slowing where and being out we is mid-to-low spreads selective are Michael, it in yield on saw To you're the focusing spread. those we're side, more the dip growth, into this loan And you loan on the

are And we've the the to in portfolio months. we're wider adding so, seen than now spreads the last XX loans at

Michael Rose

Very helpful, I it. appreciate

the you done in that had a the you Just separate savings But there's additional mentioned quarter here slide you've trimming as identified. know in guys levels. staffing topic, on I the some

for to will those and what wanted the Just get franchise. gross on both the a sense on the what then assume around savings color redeployed in be net some just the of could Thanks. are magnitude basis, and I be, a

Ben Clouse

were of I that So, the million escalating, Michael, million range. obviously number, guidance going all really focused are $XX the the some that's those on, all-inclusive. but discretionary. We gave, We incorporated are that things do have were costs in obviously, $XX to against gross

could growth? be selective things, meeting we and in being on development down as of trying are training, very can. marketing those We're business to costs, with slow what the efficient and lower doing travel, we sort So, space asset naturally possibly that as

across it's those So, really categories.

million have Going assessment course, other going in FDIC that's But little way. the bigger, higher so bit million the the we we base our particular to as is the sheet that so of transaction then, there got year, And volume, fold all-inclusive is the there. direction, of costs balance at Central, the higher we direction. some again, beginning larger have so other other in we $XX a rates in client pressure $XX

about XXXX. little of million of as million We'll, rate rate mentioned only but bit second-half a savings compensation we previously run $X the $X we course, think in had about that a basis. run opportunity think on of the more I year, have was adjustment the obtain

Mike Maddox

in take -- Yes, to hard every leverage ways. working operating Mike, happen going at item, our to in the We've to we're just to to opportunity continue expense looked advantage One, going improve efficiency get of That's I'd continue line going be But committed add. a we to end have are of and to to efficiency. two expenses. and our getting low on XXs new to are that ratio the very the also we're down year, we very by very, the very, And we markets. rate run we'll think prudent there.

Michael Rose

assume addition then run given for you a And quarters? what the But just [accretable] related Thanks. for the have one helpful. the be expectations any to be, yield gotten the and rate I would you've that acquisition. you final do one Very have (ph) and in would of that this next over maybe is couple it's approval. going the just once close regulatory me couple sort deal to the sense for closes if what next for weeks

Ben Clouse

the Yes, part we of August. anticipate early closing here in

do got we As lined you that. to regulatory approval we're up and said,

Our probably not essentially enough of that gate, about haven't of would million would valuation in the five-year $X modeled expectation, be about would out a and Michael. to their I And but on of is over mark smart loan done that think course portfolio, what a initially math I'm our expectation head, period. we final the that my be book, do

Michael Rose

Okay, Thanks taking my for great. questions.

Mike Maddox

you, Michael. Thank

Operator

question from ahead. go Olney next with comes Stephens. Please The Matt

Matt Olney

Thanks. Good morning.

Mike Maddox

Morning.

Matt Olney

to point. focus loan the I and more pipelines appreciate on growth side. comments this the be selective Randy's at on Want

bit has now of in things One churn. in the higher quarter, was line little with the that It churn around like commentary a second Randy portfolio moved historical sounds levels. the mentioned

expectations also that just mentioned few color you looking for of the this next around Thanks. increase think commentary. for quarters, any kind additional I to

Randy Rapp

Hey, good morning, Matt. It's Randy.

days, seeing capital XX moving of markets XX like a that more that We in the expect some a a just bit -- seen have from into this more "Hey, refinance churn just we picking off this say, days," We're -- some activity scheduled little little And looks the we know the the we up. space bit increase that we're of that visibility And than call forward. active, year. visibility pay transaction a more we clients had with what book. to little in previously CRE and activity when in to see

Matt Olney

types up loan can any any of far in improved the that specific you market? Randy, as themes as that, or on pick activity staying just And kind

Randy Rapp

to market faster multi-family of so The seems programs some churning bit active. the far this it and there, has is some out year. The pretty agencies than be a have good so multi-family

Matt Olney

appreciate the incremental Appreciate guys just And impact costs with there you seeing funding as specials, the the you're then, put any commentary color today color that. Okay, Any the grow margin. the I previously. out on or loan more you there? guess, on the book deposit

Ben Clouse

Well, This is please Ben. commercial. money focused or in. primarily market, We're base And I'll start. is Mike, Randy our chime client on what which very really utilizes. We're obviously

We little primary concentrating have Maybe some of and really and money specials but CDs, done color. been CD bit incremental We're give never the in raised money we've a that's focus. DDA. I'll our on market

of at Our range a X.XX higher don't about rate deposits beginning And rate of is of need deposits. sheet our the June, lower level of growth, anticipate end beginning for year. the gate, the cost add of current we've balance I as as great the incremental out balance run or as on to a with the had said, at in sheet we

Randy Rapp

we're Matt, it's some making And market competitive we sure would run just that CD you on to been Ben and levers think environment And rates. money have, add, competitive. an with said, highly really about emphasis -- client got we in as successful, as Randy. here, obviously deposit pull -- the multiple is have deposits. specials I

slowed. has the opened rotation new accounts. some First-half saw net we rotation into In ICS quarter, we year, the and growth deposit product, X,XXX of the that

our multiple base. channels as grow look to are we deposit at there there So,

Matt Olney

Okay, for that's deal. commentary. helpful. me, then Canyon lastly on the the Appreciate And just

that $X.XX on Canyon little I performance color you were that on looking I impact their as overall mentioned annualized upon closing, of something trends? previously thought to Thanks. bit we recent for $X.XX think fundamental I something an around Any recent assume. a as EPS north originally. far basis, or

Ben Clouse

is with think remained model. consistent. we Randy a the has significant I'll But given historical let further. bit sheet. Their about very their Yes, number on itself Mike expansion little and their not That's they very changed balance within talk for sheet conservative market balance Tucson current a business there the any market significance. just opportunity have very

Mike Maddox

Matt, Tucson We been I conservative takeouts, pretty think it modeling that's growth. where I'd market today. we'll think in just been that we've is of million there's to be going better a say for a lot is conservative great number. think and Tucson. And in. growth. but do banking conservative seeing And a We've it's cost us that, market on we're and opportunity to a than on that's a people, very I good compete

So, I than and be increased that there grow think our we'll products capacity modeling. with able we're faster to

Matt Olney

All for me. guys. Okay. all that's right, Thanks,

Mike Maddox

Matt. Thanks,

Operator

[Operator Piper with ahead. Andrew next Sandler. Liesch go question from Instructions] comes The Please

Andrew Liesch

here were that, could affect in for Hey, touch was just taking see everyone. any in quarter? there those Thanks on the I to late the and that that the maybe that the what margin whole third added rates questions. self-funding effect wanted to base added if at, on quarter there's if quarter third

Ben Clouse

Andrew. were doing the we for Xs those deposits wherever we're quarter, morning, the most cost low for effective happening It's the primarily can Ben. Xs. find the good Hey, on is us, basis. brokered Wholesale in in -- And those

on to I what or year, the for don't lower. We the funding of will that's remainder the those us scale. anticipate top pricing as will increase referring so the end and And of be was steady in

Andrew Liesch

Got it.

also You spreads go mentioned up low the that those X. to

So, in the you maybe point? low X at are getting loans this this funding yielding

Randy Rapp

that's correct. front make Randy. trying is loan sure Yes, production in X the has it. Andrew. of We're an new Yes, to This that

Andrew Liesch

the quarter? but incremental funding in way. it not at at low we math summed less bit the to Could earlier, we or Got loans the low getting Xs looking be I'm but anymore. may some Xs, see in saw I up It's little margin it. lot am the then right contraction as

Randy Rapp

way the we Andrew. That's see it,

Andrew Liesch

got it, got it. Yes,

all back. covered I Thanks. other my will You've questions. step

Randy Rapp

All you. right, thank

Operator

and session. back President would remarks. closing the concludes turn for over to This Maddox, question-and-answer our like CEO to Mike I conference any

Mike Maddox

and everybody thank credit be work good efficiency growth, us continued our highlight very for us. environment, for to quarter of challenging in also, feel leverage, the to continues of really and joining want macro just this proud We I morning. quality on but Well, And our operating about profitability. in a backdrop continued a our improvement lot amongst

So, third team good fourth are everybody for really we the the of and very And feel job proud our quarters. positioned about and where has we done.

So, thank you everybody for great have joining us, and day. a

Operator

has conference concluded. Thank for today's you The presentation. now attending

disconnect. now may You

CrossFirst Bankshares (CFB) 18 Jul 232023 Q2 Earnings call transcript