Investment Thesis

Formed in 2007, CrossFirst Bankshares, Inc. (CFB) is a $5.5 billion asset bank holding company based in Kansas City with seven full service offices in Kansas City, Wichita, Tulsa, Oklahoma City and Dallas. The company holds the number eight deposit market share position in Kansas City, which is actually pretty remarkable given how relatively young the bank is compared to national peers. The bank’s lending profile is much more commercially focused as about 34% of loans are C&I credits and 40% are commercial real estate loans. The vast majority of CFB’s growth has been organic, but that could change if management is serious about making a splash in Texas.

In May of 2020, CFB announced that then-President and CEO George Jones would be transitioning his role to Mike Maddox in June. Jones will continue to be on the Board of Directors until 2021 as Vice Chairman and also continue his focus on expansion into the Dallas market.

If you follow banking and know the players, CFB seems to be well-positioned to capitalize on any open windows of opportunities from the ever-plagued Texas Capital Bancshares (TCBI). Remember, former CEO and now Vice Chairman, George Jones, was the former CEO and one of the founders of TCBI.

When thinking about CFB today, I am pretty neutral. I think the bank has a great future, but asset quality trends will be critical over the near term as CFB’s economically sensitive loan exposure is higher than peers. However, when thinking over the longer term, CFB is a likely beneficiary of potential disruption opportunities in the Texas market. In my mind, the recent CEO transition was smooth, and I am confident that management will continue to focus on market share gain and efficiency efforts.

It’s hard to get a sense of how credit