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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  _______  to _______

Commission file number 001-39028

CROSSFIRST BANKSHARES, INC.

(Exact Name of Registrant as Specified in its Charter)

Kansas

    

26-3212879

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

11440 Tomahawk Creek Parkway

Leawood

,

KS

66211

(Address of principal executive offices)

(Zip Code)

(913) 901-4516

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol

    

Name of each exchange on which registered

Common Stock, par value $0.01 per share

CFB

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes    No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No 

As of April 26, 2024, the registrant had 49,292,977 shares of common stock, par value $0.01, outstanding.

CROSSFIRST BANKSHARES, INC.

Form 10-Q for the Quarter Ended March 31, 2024

Index

Part I. Financial Information

Item 1. Consolidated Financial Statements

Cautionary Note Regarding Forward-Looking Information

3

Consolidated Statements of Financial Condition – Unaudited

4

Consolidated Statements of Operations – Unaudited

5

Consolidated Statements of Comprehensive Income – Unaudited

6

Consolidated Statements of Stockholders’ Equity – Unaudited

7

Consolidated Statements of Cash Flows – Unaudited

8

Notes to Consolidated Financial Statements – Unaudited

9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

36

Item 3. Quantitative and Qualitative Disclosures about Market Risk

52

Item 4. Controls and Procedures

54

Part II. Other Information

Item 1. Legal Proceedings

54

Item 1A. Risk Factors

54

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

54

Item 5. Other Information

55

Item 6. Exhibit Index

56

Signature

57

2

Cautionary Note Regarding Forward-Looking Information

All statements contained in this quarterly report on Form 10-Q that do not directly and exclusively relate to historical facts constitute forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized,” “position” and “outlook,” or the negative of these words or other comparable words or phrases of a future or forward-looking nature. For example, our forward-looking statements include, without limitation, statements regarding our business plans, expectations, or opportunities for growth; our expense control initiatives and the results expected to be realized from those initiatives; our anticipated financial results, expenses, cash requirements and sources of liquidity; our capital allocation strategies and plans; and our anticipated future financial performance.

Unless we state otherwise or the context otherwise requires, references in this Form 10-Q to “we,” “our,” “us,” and the “Company” refer to CrossFirst Bankshares, Inc., and its consolidated subsidiaries. References in this Form 10-Q to “CrossFirst Bank” and the “Bank” refer to CrossFirst Bank, our wholly owned consolidated bank subsidiary.

These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s belief, certain assumptions made by management, and financial trends that may affect our financial condition, results of operations, business strategy or financial needs, many of which, by their nature, are inherently uncertain and beyond our control. Our actual results could differ materially from those anticipated in such forward-looking statements. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, 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, including, without limitation: uncertain or unfavorable business or economic conditions and any regulatory responses thereto, including uncertainty and volatility in the financial markets, possible slowing or recessionary economic conditions and continuing or increasing inflation; geographic concentration of our markets; changes in market interest rates that affect the pricing of our products and our net interest income; our ability to effectively execute our growth strategy and manage our growth, including identifying, consummating and integrating suitable mergers, acquisitions or other business combinations, entering new lines of business or offering new or enhanced services or products; fluctuations in the fair value of our investments; our ability to successfully manage our credit risk, particularly in our commercial real estate, energy and commercial-based loan portfolios, and the sufficiency of our allowance for credit losses; declines in the values of the real estate and other collateral securing loans in our portfolio; an increase in non-performing assets; borrower and depositor concentration risks; risks associated with originating Small Business Administration loans; our dependence on our management team, including our ability to attract, hire and retain key employees and their client and community relationships; our ability to raise and maintain sufficient liquidity and capital; competition from banks, credit unions, FinTech companies and other financial services providers; the effectiveness of our risk management framework; accounting estimates; our ability to maintain effective internal control over financial reporting; our ability to keep pace with technological changes; system failures, service denials, cyber incidents or other failures, disruptions or security breaches; employee error, employee or client misconduct, fraud committed against the Company or our clients, or incomplete or inaccurate information about clients and counterparties; disruptions to our business caused by our third-party service providers; our ability to maintain our reputation; environmental liability or failure to comply with regulatory requirements affecting foreclosed properties; costs and effects of litigation, investigations or similar matters to which we may be subject; risk exposure from transactions with financial counterparties; severe weather, natural disasters, pandemics or other health crises, acts of war or terrorism, climate change and responses thereto, or other external events; compliance with (and changes in) laws, rules, regulations, interpretations or policies relating to or affecting financial institutions, including stringent capital requirements, higher FDIC insurance premiums and assessments, consumer protection laws and privacy laws and accounting, tax, trade, monetary and fiscal matters, including the policies of the Federal Reserve and as a result of government initiatives; systemic risks across the banking industry associated with the soundness of other financial institutions; volatility in our stock price and other risks associated with our common stock; changes in our dividend or share repurchase policies and practices; or other external events. Additional discussion of these and other risk factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Form 10-K”), filed with the Securities and Exchange Commission (“SEC”) on February 29, 2024, and in our other filings with the SEC.

These forward-looking statements are made as of the date hereof, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in our business, results of operations or financial condition over time, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

3

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Financial Condition - Unaudited

    

March 31, 2024

    

December 31, 2023

    

(Dollars in thousands)

Assets

 

  

 

  

 

Cash and cash equivalents

$

206,773

$

255,229

Available-for-sale securities - taxable

 

441,157

 

413,217

Available-for-sale securities - tax-exempt

 

345,446

 

353,436

Loans, net of unearned fees

 

6,249,187

 

6,127,690

Allowance for credit losses on loans

74,856

73,462

Loans, net of the allowance for credit losses on loans

6,174,331

6,054,228

Premises and equipment, net

 

70,580

 

70,869

Restricted equity securities

 

3,752

 

3,950

Interest receivable

 

37,833

 

37,294

Foreclosed assets held for sale

 

5,377

 

Goodwill and other intangible assets, net

 

30,404

 

31,335

Bank-owned life insurance

 

71,266

 

70,810

Other

 

92,813

 

90,312

Total assets

$

7,479,732

$

7,380,680

Liabilities and stockholders’ equity

 

  

 

  

Deposits

 

  

 

  

Non-interest-bearing

$

954,240

$

990,458

Savings, NOW and money market

 

3,795,770

 

3,669,726

Time

 

1,837,136

 

1,831,092

Total deposits

 

6,587,146

 

6,491,276

Federal Home Loan Bank advances

 

77,840

 

77,889

Other borrowings

 

8,911

 

8,950

Interest payable and other liabilities

 

90,864

 

94,422

Total liabilities

 

6,764,761

 

6,672,537

Stockholders’ equity

 

  

 

  

Preferred stock, $0.01 par value: Authorized - 5,000,000 shares; issued - 7,750 at March 31, 2024 and December 31, 2023

 

 

Common stock, $0.01 par value: Authorized - 200,000,000 shares; issued - 53,503,391 and 53,326,641 shares at March 31, 2024 and December 31, 2023 respectively

 

535

 

533

Treasury stock, at cost: 4,102,925 and 3,990,753 shares held at March 31, 2024 and December 31, 2023 respectively

 

(59,720)

 

(58,251)

Additional paid-in capital

 

544,206

 

543,556

Retained earnings

 

290,419

 

272,351

Accumulated other comprehensive loss

 

(60,469)

 

(50,046)

Total stockholders’ equity

 

714,971

 

708,143

Total liabilities and stockholders’ equity

$

7,479,732

$

7,380,680

See Notes to Consolidated Financial Statements - Unaudited

4

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Operations - Unaudited

Three Months Ended March 31, 

    

2024

2023

Interest Income

 

  

Loans, including fees

$

110,099

$

89,618

Available-for-sale securities - taxable

 

4,528

 

1,849

Available-for-sale securities - tax-exempt

 

2,553

 

3,794

Deposits with financial institutions

 

1,981

 

2,014

Dividends on bank stocks

 

78

 

262

Total interest income

 

119,239

 

97,537

Interest Expense

 

  

 

  

Deposits

 

62,111

 

36,725

Fed funds purchased and repurchase agreements

 

 

46

Federal Home Loan Bank Advances

 

471

 

2,391

Other borrowings

 

63

 

154

Total interest expense

 

62,645

 

39,316

Net Interest Income

 

56,594

 

58,221

Provision for Credit Losses

 

1,655

 

4,421

Net Interest Income after Provision for Credit Losses

 

54,939

 

53,800

Non-Interest Income

 

  

 

  

Service charges and fees on client accounts

 

2,104

 

1,829

ATM and credit card interchange income

 

1,487

 

1,264

Gain on sale of loans

 

537

 

187

Income from bank-owned life insurance

 

456

 

411

Swap fees and credit valuation adjustments, net

 

158

 

90

Other non-interest income

 

847

 

640

Total non-interest income

 

5,589

 

4,421

Non-Interest Expense

 

  

 

  

Salaries and employee benefits

 

23,585

 

22,622

Occupancy

 

3,206

 

2,974

Professional fees

 

972

 

2,618

Deposit insurance premiums

 

1,906

 

1,531

Data processing

 

970

 

1,242

Advertising

 

558

 

752

Software and communication

 

1,824

 

1,651

Foreclosed assets, net

 

229

 

149

Core deposit intangible amortization

 

931

822

Other non-interest expense

3,324

 

3,731

Total non-interest expense

 

37,505

 

38,092

Net Income Before Taxes

 

23,023

 

20,129

Income tax expense

 

4,800

 

4,021

Net Income

$

18,223

$

16,108

Basic Earnings Per Common Share

$

0.36

$

0.33

Diluted Earnings Per Common Share

$

0.36

$

0.33

See Notes to Consolidated Financial Statements - Unaudited

5

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Comprehensive Income - Unaudited

Three Months Ended March 31, 

    

2024

2023

Net Income

$

18,223

$

16,108

Other Comprehensive (Loss) Income

 

  

 

  

Unrealized (loss) gain on available-for-sale securities

 

(10,870)

 

14,951

Less: income tax (benefit) expense

 

(2,196)

 

3,657

Unrealized (loss) gain on available-for-sale securities

 

(8,674)

 

11,294

Reclassification adjustment for realized gain included in income

 

2

 

63

Less: income tax expense

 

 

15

Less: reclassification adjustment for realized gain included in income, net of income tax

 

2

 

48

Unrealized (loss) gain on cash flow hedges

 

(3,205)

 

1,540

Less: income tax (benefit) expense

 

(744)

 

369

Unrealized (loss) gain on cash flow hedges, net of income tax

 

(2,461)

 

1,171

Reclassification adjustment for loss on cash flow hedges

 

(928)

 

Less: income tax benefit

 

(214)

 

Less: reclassification adjustment for loss on cash flow hedges, net of income tax

 

(714)

 

Other comprehensive (loss) income

 

(10,423)

 

12,417

Comprehensive Income

$

7,800

$

28,525

See Notes to Consolidated Financial Statements - Unaudited

6

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Stockholders’ Equity - Unaudited

    

    

    

    

    

    

Accumulated

    

Additional

Other

 

Preferred Stock

Common Stock

Treasury

Paid-in

Retained

Comprehensive

 

    

Shares

    

Amount

    

Shares

    

Amount

    

Stock

    

Capital

    

Earnings

    

Loss

    

Total

 

(Dollars in thousands)

Balance at December 31, 2022

 

$

 

48,448,215

$

530

$

(64,127)

$

530,658

$

206,095

$

(64,557)

 

$

608,599

Net income

 

 

 

 

 

 

 

16,108

 

 

16,108

Other comprehensive gain - available-for-sale securities

 

 

 

 

 

 

 

 

11,246

 

11,246

Other comprehensive gain - cash flow hedges

 

 

 

 

 

 

 

 

1,171

 

1,171

Issuance of preferred shares

7,750

 

 

 

 

 

7,750

 

7,750

Issuance of shares from equity-based awards

 

 

 

152,403

 

2

 

 

(623)

 

 

 

(621)

Stock-based compensation

 

 

 

 

 

 

1,238

 

 

 

1,238

Balance at March 31, 2023

 

7,750

$

 

48,600,618

$

532

$

(64,127)

$

539,023

$

222,203

$

(52,140)

 

$

645,491

    

    

    

    

    

    

    

    

Accumulated

    

Additional

Other

 

Preferred Stock

Common Stock

Treasury

Paid-in

Retained

Comprehensive

 

    

Shares

    

Amount

    

Shares

    

Amount

    

Stock

    

Capital

    

Earnings

    

Loss

    

Total

(Dollars in thousands)

Balance at December 31, 2023

 

7,750

$

 

49,335,888

$

533

$

(58,251)

$

543,556

$

272,351

$

(50,046)

$

708,143

Net income

 

 

 

 

 

 

 

18,223

 

 

18,223

Other comprehensive loss - available-for-sale securities

 

 

 

 

 

 

 

 

(8,676)

 

(8,676)

Other comprehensive loss - cash flow hedges

 

 

 

 

 

 

 

 

(1,747)

 

(1,747)

Preferred dividends $20.00 per share

 

 

 

 

 

 

 

(155)

 

 

(155)

Issuance of shares from equity-based awards

 

 

 

176,750

 

2

 

 

(620)

 

 

 

(618)

Open market common shares repurchases

 

 

(112,172)

 

 

(1,469)

 

 

 

 

(1,469)

Stock-based compensation

 

 

 

 

 

 

1,270

 

 

 

1,270

Balance March 31, 2024

 

7,750

$

 

49,400,466

$

535

$

(59,720)

$

544,206

$

290,419

$

(60,469)

$

714,971

See Notes to Consolidated Financial Statements - Unaudited

7

CROSSFIRST BANKSHARES, INC.

Consolidated Statements of Cash Flows - Unaudited

For the Three Months Ended March 31, 

    

2024

    

2023

    

(Dollars in thousands)

Operating Activities

 

  

 

  

 

Net income

$

18,223

$

16,108

Adjustments to reconcile net income to net cash provided by operating activities:

 

  

 

  

Depreciation and amortization

 

2,414

 

2,318

Provision for credit losses

 

1,655

 

4,421

Accretion of discounts on loans

 

(488)

 

(547)

Accretion of discounts and amortization of premiums on securities

 

285

 

926

Stock-based compensation

 

1,270

 

1,238

Gain on disposal of fixed assets

 

 

(4)

Loss on sale of foreclosed assets and related impairments

 

 

102

Gain on sale of loans

 

(537)

 

(187)

Origination of loans held for sale

(1,612)

Proceeds from sale of loans held for sale

2,913

Deferred income taxes

 

3,224

 

1,640

Net increase in bank owned life insurance

 

(456)

 

(411)

Net realized gains on equity securities

(22)

Net realized gains on available-for-sale securities

 

(2)

 

(63)

Dividends on FHLB stock

 

(71)

 

(261)

Changes in:

 

  

 

  

Interest receivable

 

(539)

 

(878)

Other assets

 

1,762

 

2,615

Other liabilities

 

(8,218)

 

(2,693)

Net cash provided by operating activities

 

19,801

 

24,324

Investing Activities

 

  

 

  

Net change in loans

 

(128,665)

 

(275,817)

Purchases of available-for-sale and equity securities

 

(45,693)

 

(93,488)

Proceeds from maturities of available-for-sale securities

 

13,465

 

5,714

Proceeds from sale of available-for-sale and equity securities

 

 

37,069

Proceeds from the sale of foreclosed assets

 

 

173

Purchase of premises and equipment

 

(1,114)

 

(2,662)

Proceeds from the sale of premises and equipment and related insurance claims

 

 

4

Purchase of restricted equity securities

 

 

(8,226)

Proceeds from sale of restricted equity securities

 

291

 

4,334

Terminated cash flow hedges

(122)

Net cash used in investing activities

 

(161,838)

 

(332,899)

Financing Activities

 

  

 

  

Net increase (decrease) in demand deposits, savings, NOW and money market accounts

 

89,826

 

(244,454)

Net increase in time deposits

 

6,044

 

430,407

Net decrease in federal funds sold

 

 

(20,000)

Repayment of Federal Home Loan Bank advances

 

(114)

 

(12,643)

Net proceeds of lines of credit

 

 

110,969

Proceeds from issuance of preferred shares, net of issuance cost

7,750

Issuance of common shares, net of issuance cost

 

2

 

2

Proceeds from employee stock purchase plan

 

240

 

167

Repurchase of common stock

 

(1,402)

 

Acquisition of common stock for tax withholding obligations

 

(860)

 

(790)

Dividends paid on preferred stock

(155)

Net cash provided by financing activities

 

93,581

 

271,408

Decrease in Cash and Cash Equivalents

 

(48,456)

 

(37,167)

Cash and Cash Equivalents, Beginning of Period

 

255,229

 

300,138

Cash and Cash Equivalents, End of Period

$

206,773

$

262,971

Supplemental Cash Flows Information

 

  

 

  

Interest paid

$

61,253

$

35,459

Income taxes paid

 

 

24

Repossessed assets in settlement of loans

5,377

See Notes to Consolidated Financial Statements - Unaudited

8

CROSSFIRST BANKSHARES, INC.

Notes to Consolidated Financial Statements - Unaudited

Note 1:   Nature of Operations and Summary of Significant Accounting Policies

Organization and Nature of Operations

CrossFirst Bankshares, Inc. (“Bankshares”) is a bank holding company whose principal activities are the ownership and management of its wholly-owned subsidiary, CrossFirst Bank (the “Bank”). In addition, the Bank has three subsidiaries, including CrossFirst Investments, Inc. (“CFI”), which holds investments in marketable securities, CFBSA I, LLC and CFBSA II, LLC.

The Bank is engaged in providing a full range of banking and financial services to individual and corporate clients primarily through its branches in: (i) Leawood, Kansas; (ii) Wichita, Kansas; (iii) Kansas City, Missouri; (iv) Oklahoma City, Oklahoma; (v) Tulsa, Oklahoma; (vi) Dallas, Texas; (vii) Fort Worth, Texas; (viii) Frisco, Texas; (ix) Phoenix, Arizona; (x) Tucson, Arizona; (xi) Colorado Springs, Colorado; (xii) Denver, Colorado; and (xiii) Clayton, New Mexico.

Basis of Presentation

The accompanying interim unaudited consolidated financial statements serve to update the CrossFirst Bankshares, Inc. Annual Report on Form 10-K for the year ended December 31, 2023 and include the consolidated accounts of Bankshares, the Bank, CFI, CFBSA I, LLC and CFBSA II, LLC (together, referred to herein as the “Company”). The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and where applicable, with general practices in the banking industry or guidelines prescribed by bank regulatory agencies. However, they may not include all information and notes necessary to constitute a complete set of financial statements under GAAP applicable to annual periods and accordingly should be read in conjunction with the financial information contained in the Company's most recent Annual Report on Form 10-K. The unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results presented. All such adjustments are of a normal recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications of prior years' amounts are made whenever necessary to conform to current period presentation. The results of operations for the interim period are not necessarily indicative of the results that may be expected for the full year or any other interim period. All amounts are in thousands, except share data, or as otherwise noted.

GAAP requires management to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures of contingent assets and liabilities. By their nature, estimates are based on judgment and available information. Management has made significant estimates in certain areas, such as the fair values of financial instruments, and the allowance for credit losses (“ACL”). Because of the inherent uncertainties associated with any estimation process and future changes in market and economic conditions, it is possible that actual results could differ significantly from those estimates.

The Company's significant accounting policies followed in the preparation of the unaudited consolidated financial statements are disclosed in Note 1 of the audited financial statements and notes for the year ended December 31, 2023 and are contained in the Company's Annual Report on Form 10-K for that period. There have been no significant changes to the application of significant accounting policies since December 31, 2023.

Related Party Transactions

The Bank extends credit and receives deposits from related parties. In management’s opinion, the loans and deposits were made in the ordinary course of business and made on similar terms as those prevailing at the time with other persons. Related party loans totaled $10 million and $12 million, while related party deposits totaled $105 million and $106 million, at March 31, 2024 and December 31, 2023, respectively. Related parties also owned $6 million of the

9

Company’s Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share (“Series A Preferred Stock”), at March 31, 2024.

Recent Accounting Pronouncements

Accounting pronouncements not yet adopted by the Company

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosures on both an annual and interim basis about significant segment expenses, including for companies with only one reportable segment. This ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which requires updates to rate reconciliation disclosures and information on income taxes paid on an annual basis. This ASU is effective on a prospective basis with retrospective application permitted for annual periods beginning after December 15, 2024. The Company is evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures.

Note 2:   Securities

Available-for-Sale (“AFS”) Securities

AFS securities are summarized as follows as of the dates indicated:

    

March 31, 2024

Gross

Gross

Unrealized

Unrealized

Approximate

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

(Dollars in thousands)

Federal agency obligations

$

9,989

$

42

$

$

10,031

Mortgage-backed - GSE residential

251,994

280

23,614

228,660

Collateralized mortgage obligations - GSE residential

 

71,105

 

301

 

1,138

 

70,268

State and political subdivisions

 

394,166

 

297

 

46,680

 

347,783

Small Business Administration loan pools

123,224

325

2,256

121,293

Corporate bonds

 

9,731

 

 

1,163

 

8,568

Total available-for-sale securities

$

860,209

$

1,245

$

74,851

$

786,603

    

December 31, 2023

Gross

Gross

 

Unrealized

Unrealized

Approximate

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

(Dollars in thousands)

Federal agency obligations

 

$

9,988

$

84

$

$

10,072

U.S. Treasury securities

4,965

3

4,968

Mortgage-backed - GSE residential

 

233,203

629

21,370

212,462

Collateralized mortgage obligations - GSE residential

 

50,125

493

674

49,944

State and political subdivisions

 

396,349

497

40,949

355,897

Small Business Administration loan pools

125,017

722

961

124,778

Corporate bonds

 

9,740

1,208

8,532

Total available-for-sale securities

 

$

829,387

$

2,428

$

65,162

$

766,653

The carrying value of securities pledged as collateral was $46 million and $40 million at March 31, 2024 and December 31, 2023, respectively.

10

As of March 31, 2024 and December 31, 2023, the AFS securities had $6 million and $7 million, respectively, of accrued interest, excluded from the amortized cost basis, and presented in “interest receivable” on the consolidated statements of financial condition.

The following tables summarize the gross realized gains and losses from sales or maturities of AFS securities as of the dates shown:

For the Three Months Ended

March 31, 2024

Gross Realized Gains

    

Gross Realized Losses

    

Net Realized Gain

(Dollars in thousands)

Available-for-sale securities

$

2

$

$

2

For the Three Months Ended

March 31, 2023

Gross Realized Gains

    

Gross Realized Losses

    

Net Realized Gain

(Dollars in thousands)

Available-for-sale securities

$

193

$

(130)

$

63

The following tables summarize AFS securities gross unrealized losses, as of the dates shown, along with the length of time in an unrealized loss position: