DEF 14A: CrossFirst Bankshares Sets Date for 2024 Annual Stockholders Meeting, Outlines Key Proposals

CrossFirst Bankshares will hold its 2024 Annual Meeting of Stockholders virtually on May 14, 2024, to vote on the election of directors and the ratification of the company's independent auditor.

Summary

• CrossFirst Bankshares, Inc. will hold its 2024 Annual Meeting of Stockholders virtually on May 14, 2024.
• Stockholders of record as of March 15, 2024, are entitled to vote.
• The meeting will address the election of four Class I directors for three-year terms and the ratification of FORVIS, LLP as the independent registered public accounting firm for 2024.
• The Board recommends voting FOR the election of each director nominee and FOR the ratification of FORVIS, LLP.
• The company highlights its strategic growth in 2023, including the acquisitions of Farmers & Stockmens Bank and Canyon Bancorporation, adding $830 million in assets.
• Despite banking industry challenges, CrossFirst reported improved profitability, with total assets of $7.4 billion, loan growth of 14%, and deposit growth of 15%.
• Non-performing assets were 0.34% of total assets, and net charge-offs were 0.09% of average loans.
• The company issued $7.8 million of Series A Non-Cumulative Perpetual Preferred Stock.
• Book value per share grew to $14.35, and tangible book value per share increased to $13.56.
• Total risk-based capital increased to 11.2%, and common equity Tier 1 capital increased to 10.0% as of December 31, 2023.
• The Board intends to decrease its size to 13 directors immediately prior to the 2024 Annual Meeting upon the retirement of George E. Hansen III.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook, highlighting strategic growth and strong financial performance despite industry challenges. The focus on corporate governance and executive compensation practices also contributes to a favorable impression.

Positives

• Strategic acquisitions in 2023 added $830 million in assets.
• Loan and deposit growth of 14% and 15%, respectively, indicate strong business activity.
• Low non-performing asset ratio of 0.34% suggests effective risk management.
• Increase in book value per share and tangible book value per share reflects improved financial health.
• Strong capital ratios (total risk-based capital at 11.2% and common equity Tier 1 capital at 10.0%) provide a buffer against potential losses.

Negatives

• The banking industry faced significant upheaval in March 2023 due to the collapse of several banks.
• Competition for deposits was exacerbated by a renewed focus on deposits in excess of FDIC insurance limits.
• Uncertainties around continued cost pressures from inflation, FDIC special assessments and potential for higher provisioning for expected credit losses all led to a highly volatile market for banks.

Risks

• The banking industry faces challenges related to liquidity management and concentration in certain sectors.
• Competition for deposits may intensify due to increased focus on FDIC insurance limits.
• Continued cost pressures from inflation and potential for higher provisioning for credit losses could impact profitability.
• Cybersecurity threats and the need for robust cybersecurity programs are ongoing concerns.

Future Outlook

The company intends to continue its strategy of organic and in-organic growth, expanding its footprint in dynamic markets and investing in its people.

Management Comments

• The virtual annual meeting format increases our ability to engage with all stockholders, regardless of size, resources or physical location.
• The Board believes strong corporate governance is critical to achieving the Company's long-term goals and maintaining the trust and confidence of investors, employees, customers, regulatory agencies, and other stakeholders.

Industry Context

The document addresses the banking industry's challenges in 2023, including bank failures, increased competition for deposits, and uncertainties related to inflation and regulatory assessments. CrossFirst's response included expanding liquidity, proactive client outreach, and expense savings strategies.

Comparison to Industry Standards

• The peer group used to set 2023 compensation consisted of 17 regional banks between $4.4 billion and $13.7 billion in assets, with positive cumulative earnings, relevant geography and business profile.
• Companies in the peer group include Veritex Holdings, Inc., Origin Bancorp, Inc., Mercantile Bank Corporation, 1st Source Corporation, QCR Holdings, Inc., Stock Yards Bancorp, Inc., First Busey Corporation, Nicolet Bankshares, Inc., Stellar Bancorp, Inc., First Financial Corporation, Triumph Bancorp, Inc., First Foundation, Inc., Byline Bancorp, Inc., Equity Bancshares, Inc., Old Second Bancorp, Inc., Enterprise Financial Services Corp., and National Bank Holdings Corporation.

Corporate Governance

Related Party Transactions

• Certain officers, directors, and principal stockholders are clients of the Bank, with transactions including deposits, loans, and other financial services.
• Mr. Hansen's son-in-law is a partner at Polsinelli LLP, a law firm engaged by the Company for loan documentation assistance; the Company spent approximately $190,000 in legal fees in 2023 with Polsinelli.
• Messrs. Kuykendall, Stogner, Swinson, Rauckman, Geist or their affiliated entities, Mr. Maddox and Pamela Breuckmann, Mr. Maddoxs significant other, purchased shares of Series A Preferred Stock, from the Company for $1,000 per share in connection with a private offering of the Series A Preferred Stock.

Stakeholder Impact

• The company's performance and governance practices impact shareholders, employees, customers, regulatory agencies, and other stakeholders.
• Executive compensation programs are designed to align with stockholder interests and reward performance.
• The Board believes strong corporate governance is critical to maintaining the trust and confidence of investors, employees, customers, regulatory agencies, and other stakeholders.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its Annual Meeting on May 14, 2024.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Board of Directors, Director Election, FORVIS, Auditor Ratification, Financial Performance, Acquisitions, Capital Ratios, Corporate Governance, Executive Compensation, Risk Management, CrossFirst Bankshares, Banking Industry