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CF BANKSHARES INC., PARENT OF CFBANK NA, REPORTS RESULTS FOR THE 3rd QUARTER OF 2022

CFBK

COLUMBUS, Ohio, Nov. 7, 2022 /PRNewswire/ -- CF Bankshares Inc. (NASDAQ: CFBK) (the "Company"), the parent of CFBank, National Association ("CFBank"), today announced financial results for the third quarter and year to date (YTD) ended September 30, 2022.

Third Quarter and Year to Date 2022 Highlights

  • Net Income of $4.2 million($0.65per share) and Core Earnings of $5.2 million($0.80per share). Core Earnings represent net income adjusted for non-recurring items totaling $946,000 (after-tax) for the conversion of our operating platform and fixed asset impairment. These non-recurring items are detailed in the tables included with this press release. Core earnings increased $411,000, when compared to the previous sequential quarter.
  • Return on Average Assets (ROA) was 1.02% and Core Return on Average Assets was 1.25% for the third quarter, while Return on Average Equity (ROE) was 12.62% and Core Return on Average Equity was 15.43%.
  • For the first nine months of 2022, Net Income was $13.5 million ($2.06 per share), ROA was 1.14% and ROE was 13.74%.
  • Net interest margin (NIM) increased 32 bps during the quarter to 3.36%.
  • Book value per share increased to $20.85 at September 30, 2022.
  • Net loans and leases grew by $96 million, or 27.8% (annualized), during the quarter. Net loans and leases totaled $1.5 billion at September 30, 2022.
  • During the third quarter, we completed the conversion of our core processing platform, and recognized one-time conversion expenses of approximately $500,000 after-tax. These expenses are expected to be earned back over the life of the contract through reduced data processing charges.
  • Credit quality remains strong with loans more than 30 days past due at 0.09% of total loans. There were no charge-offs during the quarter and year to date through September 30, 2022.

Recent Developments

  • On October 4, 2022, the Company's Board of Directors declared a Cash Dividend of $0.05 per share payable on October 25, 2022 to shareholders of record as of the close of business on October 14, 2022.
  • In October 2022, we opened two new banking locations, Ohio City (Cleveland) and Red Bank (Cincinnati), after opening full-service Retail branches in Polaris (Columbus, Ohio) and Indianapolis earlier this year.

CEO and Board Chair Commentary

Timothy T. O'Dell, President and CEO, commented: "Operating in the currently challenging and volatile rate environment, CFBank is continuing to generate quality growth and business opportunities. Our business model remains focused on working with strong and high performing businesses and entrepreneurs.

Core Earnings are expanding, as we add size and scale, approaching $2 Billion in Total Assets as the next major threshold target. Through the first three quarters of 2022, our Total Assets have grown $260 million. Additional earnings lift has also been provided by interest rate increases and NIM expansion.

Our Commercial loan pipelines remain strong as we attract quality new and full-service business banking relationships. We are pleased with the size and scale of Residential Mortgage Lending, which is focused on Portfolio lending in our Regional markets. We made the decision to exit direct-to-consumer (DTC) originations roughly one year ago, anticipating mortgage market conditions would continue to become less favorable.

Credit Quality along with Underwriting and Lending standards remain strong. CFBank, because of our ability to attract quality loan opportunities, is well positioned in the current market environment by having only a nominally sized Investment portfolio.

Going forward, we expect that attracting deposits will continue to be increasingly challenging. However, we are having successes with our initiatives for growing Public Fund deposits. Indiana (our most recent regional market expansion) is proving to be a good deposit generating market.

In addition, we have expanded our Deposit gathering franchise recently with this year's addition of four new branch locations in: Polaris (Columbus), Indianapolis, Ohio City (Cleveland), and Red Bank (Cincinnati).

CFBank remains very disciplined with sticking to our proven fundamentals. Steady as we go.

We believe from experience that market disruption and volatility will translate into increasing quality business opportunities for us."

Robert E. Hoeweler, Chairman of the Board, added: "Our experienced CF Leadership continues to maintain a strong growth trajectory, guiding our Financial institution forward prudently during this challenging economic environment.

We focus on providing financial solutions, coupled with ease of doing business delivery. Our success results through fostering mutually beneficial partnerships with our Customers, Communities, Shareholders and Employees."

Our Best is yet Ahead!

Overview of Results

Net income for the three months ended September 30, 2022 totaled $4.2 million (or $0.65 per diluted common share) compared to net income of $4.7 million (or $0.72 per diluted common share) for the three months ended June 30, 2022 and net income of $4.1 million (or $0.61 per diluted common share) for the three months ended September 30, 2021.

Net income for the nine months ended September 30, 2022 totaled $13.5 million (or $2.06 per diluted common share) compared to net income of $14.0 million (or $2.10 per diluted common share) for the nine months ended September 30, 2021.

Net income for the three months ended September 30, 2022 was negatively impacted by one-time conversion costs of $627,000 pre-tax ($496,000 after tax) and impairment expense of $570,000 pre-tax ($450,000 after tax) related to the pending sale of our headquarters building in Worthington as we prepare to move our headquarters office to New Albany, Ohio. The conversion costs related to the conversion of our core processing system. We do not anticipate to incur material additional costs going forward related to the conversion of our core processing system.

Net Interest Income and Net Interest Margin

Net interest income totaled $13.3 million for the quarter ended September 30, 2022 and increased $1.8 million, or 15.3%, compared to $11.5 million in the prior quarter, and increased $2.9 million, or 27.9%, compared to $10.4 million in the third quarter of 2021.

The increase in net interest income compared to the prior quarter was primarily due to a $3.3 million, or 22.4%, increase in interest income, partially offset by a $1.5 million, or 48.4%, increase in interest expense. The increase in interest income was primarily attributed to a $68.2 million, or 4.5%, increase in average interest-earning assets outstanding, coupled with a 66bps increase in average yield on interest-earning assets. The increase in interest expense when compared to the prior quarter was attributed to a $47.3 million, or 3.9%, increase in average interest-bearing liabilities, coupled with a 45bps increase in the average cost of funds on interest-bearing liabilities. The net interest margin of 3.36% for the quarter ended September 30, 2022 increased 32bps compared to the net interest margin of 3.04% for the prior quarter.

The increase in net interest income compared to the third quarter of 2021 was primarily due to an $5.3 million, or 41.7%, increase in interest income, partially offset by a $2.4 million, or 104.8%, increase in interest expense. The increase in interest income was primarily attributed to a $286.2 million, or 22.1%, increase in average interest-earning assets outstanding, coupled with a 62bps increase in the average yield on interest-earning assets. The increase in interest expense was attributed to a $267.6 million, or 27.3%, increase in average interest-bearing liabilities, coupled with a 57bps increase in the average cost of funds on interest-bearing liabilities. The net interest margin of 3.36% for the quarter ended September 30, 2022 increased 15bps compared to the net interest margin of 3.21% for the third quarter of 2021.

Noninterest Income

Noninterest income for the quarter ended September 30, 2022 totaled $705,000 and decreased $103,000, or 12.7%, compared to $808,000 for the prior quarter. The decrease was primarily due to a $121,000 decrease in the net gain on sales of residential mortgage loans, partially offset by a $19,000 increase in swap fee income.

Noninterest income for the quarter ended September 30, 2022 decreased $1.4 million, or 66.1%, compared to $2.1 million for the quarter ended September 30, 2021. The decrease was primarily due to a $1.9 million decrease in gain on sales of deposits which was recognized in connection with the sale of our Columbiana County, Ohio branches in Q3 2021. This was partially offset by a $135,000 increase in net gain on sales of commercial loans and a $55,000 increase in service charges on deposit accounts.

During the second quarter 2022, we exited the DTC mortgage originations business in favor of portfolio lending in our Regional markets with servicing retained. There were no loans sold during the three months ended September 30, 2022. The following table represents the notional amount of loans sold during the three months ended June 30, 2022, and September 30, 2021.







Three Months ended







June 30, 2022


September 30, 2021

Notional amount of loans sold






$

9,368


$

498,968

The following table represents the revenue recognized on mortgage activities for the three months ended June 30, 2022, and September 30, 2021 (in thousands).


Three Months ended


June 30, 2022


September 30, 2021

Gain (loss) on loans sold

$

(103)


$

6,415

Gain (loss) from change in fair value of loans held-for-sale


92



(1,916)

Gain (loss) from change in fair value of derivatives


132



(4,767)


$

121


$

(268)

Noninterest Expense

Noninterest expense for the quarter ended September 30, 2022 totaled $8.6 million and increased $2.1 million, or 32.9%, compared to $6.5 million for the prior quarter. The increase in noninterest expense was primarily due to a $597,000 increase in data processing expense and a $570,000 impairment of property and equipment. The increase in data processing expense was primarily related one-time charges for the conversion of our core processing system during the third quarter of 2022. The impairment of property and equipment was related to the pending sale of our headquarters building in Worthington as we prepare to move our headquarters office to New Albany, Ohio.

Noninterest expense for the quarter ended September 30, 2022 increased $1.2 million, or 15.7%, compared to $7.4 million for the quarter ended September 30, 2021. The increase in noninterest expense was primarily due to a $606,000 increase in data processing expense and a $570,000 impairment of property and equipment. As mentioned above, the increase in data processing expense was primarily related to the conversion of our core processing system during the third quarter of 2022 and the impairment of property and equipment was related to the pending sale of the Worthington headquarters building.

Income Tax Expense

Income tax expense was $1.0 million for the quarter ended September 30, 2022 (effective tax rate of 19.4%), compared to $1.2 million for the prior quarter (effective tax rate of 19.6%) and $985,000 for the quarter ended September 30, 2021 (effective tax rate of 19.5%).

Loans and Loans Held For Sale

Net loans and leases totaled $1.5 billion at September 30, 2022 and increased $95.7 million, or 6.9%, from the prior quarter and increased $259.7 million, or 21.4%, from December 31, 2021. The increase in net loans during the quarter was primarily due to a $31.5 million increase in single-family residential loan balances, a $21.0 million increase in commercial real estate loan balances, a $19.7 million increase in multi-family loan balances, a $15.2 million increase in commercial loan balances, a $6.1 million increase in construction loan balances, and a $2.6 million increase in home equity lines of credit. The increases in the aforementioned loan balances were related to increased sales activity and new relationships.

The increase in net loans from December 31, 2021 was primarily due to a $92.7 million increase in single-family residential loan balances, a $78.3 million increase in commercial loan balances, a $46.6 million increase in construction loan balances, a $20.9 million increase in multi-family loan balances, a $16.3 million increase in commercial real estate loan balances, and a $5.3 million increase in home equity lines of credit. The increases in the aforementioned loan balances were related to increased sales activity and new relationships.

The following table presents the recorded investment in loans and leases for certain non-owner-occupied loan types ($ in thousands).


September 30, 2022


June 30, 2022


March 31, 2022

Construction - 1-4 family

$

56,397


$

42,281


$

34,386

Construction - Multi-family


79,714



56,071



57,363

Construction - Non-residential


40,744



30,220



35,381

Hotel/Motel


16,976



17,023



17,078

Industrial / Warehouse


23,658



26,362



27,902

Land/Land Development


20,996



27,895



29,315

Medical/Healthcare/Senior Housing


495



3,253



3,297

Multi-family


82,939



84,580



60,990

Office


45,070



40,526



41,254

Retail


25,029



26,631



30,630

Other

$

51,655


$

61,089


$

57,186

Asset Quality

Nonaccrual loans were $1.0 million, or 0.07%, of total loans at September 30, 2022, an increase of $83,000 from nonaccrual loans at June 30, 2022 and an increase of $7,000 from nonaccrual loans at December 31, 2021. Loans past due more than 30 days totaled $1.3 million at September 30, 2022 compared to $716,000 at June 30, 2022 and $3.6 million at December 31, 2021.

The allowance for loan and lease losses (ALLL) totaled $15.7 million at September 30, 2022 compared to $15.5 million at both June 30, 2022 and December 31, 2021. The ratio of the ALLL to total loans was 1.05% at September 30, 2022 compared to 1.11% at June 30, 2022 and 1.26% at December 31, 2021.

There was $150,000 in provision for loan and lease losses expense for the quarter ended September 30, 2022. There was no provision for loan losses expense for the quarters ended June 30, 2022 and September 30, 2021. Net recoveries for the quarter ended September 30, 2022 totaled $5,000 compared to net recoveries of $12,000 for the prior quarter and net charge-offs of $8,000 for the quarter ended September 30, 2021.

Deposits

Deposits totaled $1.5 billion at September 30, 2022, an increase of $112.5 million, or 8.2%, when compared to $1.4 billion at June 30, 2022, and an increase of $243.6 million, or 19.6%, when compared to $1.2 billion at December 31, 2021. The increase when compared to the prior quarter end is primarily due to a $103.7 million increase in money market account balances and a $39.0 million increase in checking account balances, partially offset by a $30.1 million decrease in certificate of deposit account balances. The increase when compared to December 31, 2021 is primarily due to a $242.0 million increase in money market account balances and a $15.5 million increase in certificate of deposit account balances, partially offset by a $12.9 million decrease in checking account balances. The increase in money market account balances during the first nine months of 2022 was primarily driven by several new Public Funds deposit relationships totaling approximately $147 million. Noninterest-bearing deposit accounts increased $26.4 million to $270.9 million from $244.5 million at June 30, 2022, and decreased $14.0 million from $284.9 million at December 31, 2021.

Borrowings

FHLB advances and other debt totaled $102.8 million at September 30, 2022, an increase of $27.2 million when compared to $75.6 million at June 30, 2022 and an increase of $13.1 million when compared to $89.7 million at December 31, 2021. The increase when compared to the prior quarter was due to an increase of $25.0 million in FHLB advances and an increase of $2.2 million on the Company's line of credit with a third party financial institution. The increase when compared to December 31, 2021 was primarily due to a $15.0 million increase in FHLB advances, partially offset by net reductions of $1.5 million on the Company's line of credit with a third party financial institution.

Capital

Stockholders' equity totaled $134.9 million at September 30, 2022, an increase of $2.2 million, or 1.6%, from $132.7 million at June 30, 2022. Stockholders' equity increased $9.6 million, or 7.6%, from $125.3 million at December 31, 2021. The increase in total stockholders' equity during the three months ended September 30, 2022 was primarily attributed to net income, partially offset by a $217,000 other comprehensive loss and share repurchases of $1.7 million. The increase in total stockholders' equity during the nine months ended September 30, 2022 was primarily attributed to net income, partially offset by share repurchases of $2.3 million and a $1.5 million other comprehensive loss. The other comprehensive loss was the result of the mark-to-market adjustment of our investment portfolio.

Use of Non-GAAP Financial Measures

This earnings release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). Management uses these "non-GAAP" financial measures in its analysis of the Company's performance and believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers. These disclosures should not be viewed as substitutes for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Non-GAAP financial measures included in this earnings release include Core Earnings, Core Earnings Per Share, Core Return on Average Assets and Core Return on Average Equity. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included at the end of this earnings release under the heading "GAAP TO NON-GAAP RECONCILIATION."

About CF Bankshares Inc. and CFBank

CF Bankshares Inc. (the Company) is a holding company that owns 100% of the stock of CFBank, National Association (CFBank). CFBank is a nationally chartered boutique Commercial bank operating primarily in Four (4) Major Metro Markets: Columbus, Cleveland, and Cincinnati, Ohio, and Indianapolis, Indiana. The current Leadership Team and Board recapitalized the Company and CFBank in 2012 during the financial crisis, repositioning CFBank as a full-service Commercial Bank model. Since the 2012 recapitalization, CFBank has achieved a CAGR of nearly 25%.

CFBank focuses on serving the financial needs of closely held businesses and entrepreneurs, by providing a comprehensive Commercial, Retail, and Mortgage Lending services presence. In all regional markets, CFBank provides commercial loans and equipment leases, commercial and residential real estate loans and treasury management depository services, residential mortgage lending, and full-service commercial and retail banking services and products. CFBank is differentiated by our penchant for individualized service coupled with direct customer access to decision-makers, and ease of doing business. CFBank matches the sophistication of much larger banks, without the bureaucracy.

CFBank ranked #7 on American Banker's listing of Top 200 Publicly Traded Community Banks based on 3-year average return on equity as of December 31, 2021 and has been recognized as a Small Cap All-Star performer by Piper Sandler in 2021, 2020, and 2019. In addition, CFBank was ranked #4 in Performance and #2 in Growth Strategy by Bank Director magazine based on 2020 performance and growth.

Additional information about the Company and CFBank is available at www.CF.Bank

FORWARD LOOKING STATEMENTS

This press release and other materials we have filed or may file with the Securities and Exchange Commission ("SEC") contain or may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Reform Act of 1995, which are made in good faith by us. Forward-looking statements include, but are not limited to: (1) projections of revenues, income or loss, earnings or loss per common share, capital structure and other financial items; (2) plans and objectives of the management or Boards of Directors of CF Bankshares Inc. or CFBank; (3) statements regarding future events, actions or economic performance; and (4) statements of assumptions underlying such statements. Words such as "estimate," "strategy," "may," "believe," "anticipate," "expect," "predict," "will," "intend," "plan," "targeted," and the negative of these terms, or similar expressions, are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Various risks and uncertainties may cause actual results to differ materially from those indicated by our forward-looking statements, including, without limitation, impacts from the ongoing COVID-19 pandemic on local, national and global economic conditions in general and on our industry and business in particular, including adverse impacts on our customer's operations, financial condition and ability to repay loans, changes in interest rates or disruptions in the mortgage market, and inflationary pressures, and those additional risks detailed from time to time in our reports filed with the SEC, including those risk factors identified in "Item 1A. Risk Factors" of Part I of our Annual Report on Form 10-K filed with SEC for the year ended December 31, 2021, as supplemented by the risk factors identified in "Item 1A. Risk Factors" of Part II of our Quarterly Reports on Form 10-Q filed with the SEC for the quarters ended March 31, 2022 and June 30, 2022.

Forward-looking statements are not guarantees of performance or results. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. We caution you, however, that assumptions or bases almost always vary from actual results, and the differences between assumptions or bases and actual results can be material. The forward-looking statements included in this press release speak only as of the date hereof. We undertake no obligation to publicly release revisions to any forward-looking statements to reflect events or circumstances after the date of such statements, except to the extent required by law.

















Consolidated Statements of Income
















($ in thousands, except share data)
















(unaudited)

Three months ended




Nine months ended




September 30,




September 30,




2022


2021


% change


2022


2021


% change

Total interest income

$

18,006


$

12,703


42 %


$

45,863



39,221


17 %

Total interest expense


4,690



2,290


105 %



10,228



8,151


25 %

Net interest income


13,316



10,413


28 %



35,635



31,070


15 %

















Provision for loan and lease losses


150



-


n/m



150



(1,600)


n/m

Net interest income after provision for loan and lease losses


13,166



10,413


26 %



35,485



32,670


9 %

















Noninterest income
















Service charges on deposit accounts


268



213


26 %



823



612


34 %

Net gain on sales of residential mortgage loans


-



(268)


n/m



678



5,348


-87 %

Net gain on sale of commercial loans


134



(1)


n/m



277



1,158


-76 %

Swap fee income


24



-


n/m



42



182


-77 %

Gain on redemption of life insurance


-



-


n/m



-



383


n/m

Gain on sale of deposits


-



1,893


-100 %



-



1,893


n/m

Other


279



240


16 %



739



682


8 %

Noninterest income


705



2,077


-66 %



2,559



10,258


-75 %

















Noninterest expense
















Salaries and employee benefits


4,112



4,250


-3 %



11,311



13,410


-16 %

Occupancy and equipment


324



254


28 %



955



835


14 %

Data processing


1,126



520


117 %



2,175



1,580


38 %

Franchise and other taxes


178



241


-26 %



839



723


16 %

Professional fees


896



959


-7 %



2,148



3,555


-40 %

Director fees


171



156


10 %



465



466


0 %

Postage, printing, and supplies


45



34


32 %



126



120


5 %

Advertising and marketing


108



45


140 %



287



2,572


-89 %

Telephone


66



65


2 %



180



191


-6 %

Loan expenses


296



99


199 %



502



187


168 %

Depreciation


134



108


24 %



375



311


21 %

FDIC premiums


312



476


-34 %



690



1,095


-37 %

Regulatory assessment


70



66


6 %



201



196


3 %

Other insurance


45



45


0 %



135



113


19 %

Impairment of property and equipment


570



-


n/m



570



-


n/m

Other


146



111


32 %



389



311


25 %

Noninterest expense


8,599



7,429


16 %



21,348



25,665


-17 %

















Income before income taxes


5,272



5,061


4 %



16,696



17,263


-3 %

Income tax expense


1,023



985


4 %



3,203



3,277


-2 %

Net Income

$

4,249


$

4,076


4 %


$

13,493


$

13,986


-4 %

















Share Data
















Basic earnings per common share

$

0.66


$

0.63




$

2.11


$

2.14



Diluted earnings per common share

$

0.65


$

0.61




$

2.06


$

2.10



















Average common shares outstanding - basic


6,393,531



6,510,504





6,408,342



6,528,126



Average common shares outstanding - diluted


6,547,791



6,657,250





6,549,691



6,672,314



















n/m - not meaningful
































Consolidated Statements of Financial Condition
































($ in thousands)

Sept 30,


Jun 30,


Mar 31,


Dec 31,


Sept 30,


(unaudited)

2022


2022


2022


2021


2021


Assets
















Cash and cash equivalents

$

198,066


$

154,850


$

168,290


$

166,591


$

68,161


Interest-bearing deposits in other financial institutions


100



100



100



100



100


Securities available for sale


11,436



12,220



13,004



16,347



17,128


Equity Securities


5,000



5,000



5,000



5,000



5,000


Loans held for sale


-



-



8,470



27,988



77,946


Loans and leases


1,489,570



1,393,759



1,296,836



1,229,657



1,139,199


Less allowance for loan and lease losses


(15,687)



(15,532)



(15,520)



(15,508)



(15,487)


Loans and leases, net


1,473,883



1,378,227



1,281,316



1,214,149



1,123,712


FHLB and FRB stock


7,633



7,332



7,326



7,315



6,475


Premises and equipment, net


3,792



6,110



6,032



5,869



3,944


Other assets held for sale


1,930



-



-



-



-


Operating lease right of use assets


1,499



1,638



1,782



1,925



1,462


Bank owned life insurance


26,189



26,038



25,889



25,743



25,582


Accrued interest receivable and other assets


34,514



27,962



26,986



24,562



25,446


Total assets

$

1,764,042


$

1,619,477


$

1,544,195


$

1,495,589


$

1,354,956


































Liabilities and Stockholders' Equity
















Deposits
















Noninterest bearing

$

270,945


$

244,484


$

253,778


$

284,935


$

243,153


Interest bearing


1,219,038



1,133,005



1,045,008



961,417



913,637


Total deposits


1,489,983



1,377,489



1,298,786



1,246,352



1,156,790


FHLB advances and other debt


102,803



75,594



83,235



89,727



41,218


Advances by borrowers for taxes and insurance


2,573



1,879



2,078



2,752



1,756


Operating lease liabilities


1,588



1,736



1,889



2,032



1,578


Accrued interest payable and other liabilities


17,311



15,185



14,972



14,513



15,571


Subordinated debentures


14,912



14,903



14,893



14,883



14,874


Total liabilities


1,629,170



1,486,786



1,415,853



1,370,259



1,231,787


















Stockholders' equity


134,872



132,691



128,342



125,330



123,169


Total liabilities and stockholders' equity

$

1,764,042


$

1,619,477


$

1,544,195


$

1,495,589


$

1,354,956





























Average Balance Sheet and Yield Analysis





















































For Three Months Ended


September 30, 2022


June 30, 2022


September 30, 2021


Average


Interest


Average


Average


Interest


Average


Average


Interest


Average


Outstanding


Earned/


Yield/


Outstanding


Earned/


Yield/


Outstanding


Earned/


Yield/


Balance


Paid


Rate


Balance


Paid


Rate


Balance


Paid


Rate


(Dollars in thousands)

Interest-earning assets:



























Securities (1) (2)

$

17,044


$

219



4.64 %


$

17,744


$

221



4.58 %


$

22,312


$

230



4.13 %

Loans and leases and loans held for sale (3)


1,424,326



16,876



4.74 %



1,327,636



14,042



4.23 %



1,223,868



12,397



4.05 %

Other earning assets


135,240



813



2.40 %



162,912



364



0.89 %



45,174



21



0.19 %

FHLB and FRB stock


7,192



98



5.45 %



7,329



78



4.26 %



6,221



55



3.54 %

Total interest-earning assets


1,583,802



18,006



4.54 %



1,515,621



14,705



3.88 %



1,297,575



12,703



3.92 %

Noninterest-earning assets


78,222









81,305









81,674







Total assets

$

1,662,024








$

1,596,926








$

1,379,249


































Interest-bearing liabilities:



























Deposits

$

1,154,605



3,992



1.38 %


$

1,108,079



2,501



0.90 %


$

912,533



1,777



0.78 %

FHLB advances and other borrowings


93,397



698



2.99 %



92,612



659



2.85 %



67,853



513



3.02 %

Total interest-bearing liabilities


1,248,002



4,690



1.50 %



1,200,691



3,160



1.05 %



980,386



2,290



0.93 %




























Noninterest-bearing liabilities


279,383









266,812









277,469







Total liabilities


1,527,385









1,467,503









1,257,855


































Equity


134,639









129,423









121,394







Total liabilities and equity

$

1,662,024








$

1,596,926








$

1,379,249


































Net interest-earning assets

$

335,800








$

314,930








$

317,189







Net interest income/interest rate spread




$

13,316



3.04 %





$

11,545



2.83 %





$

10,413



2.99 %

Net interest margin








3.36 %









3.04 %









3.21 %

Average interest-earning assets



























to average interest-bearing liabilities


126.91 %









126.23 %









132.35 %








(1) Average balance is computed using the carrying value of securities. Average yield is computed using the historical amortized cost average balance for available for sale securities.

(2) Average yields and interest earned are stated on a fully taxable equivalent basis.

(3) Average balance is computed using the recorded investment in loans net of the ALLL and includes nonperforming loans.























Consolidated Financial Highlights





















At or for the three months ended


At or for the nine months ended

($ in thousands except per share data)


Sept 30,


Jun 30,


Mar 31,


Dec 31,


Sept 30,



September 30,

(unaudited)


2022


2022


2022


2021


2021



2022



2021

Earnings and Dividends






















Net interest income


$

13,316


$

11,545


$

10,774


$

10,969


$

10,413


$

35,635


$

31,070

Provision for loan and lease losses


$

150


$

-


$

-


$

-


$

-


$

150


$

(1,600)

Noninterest income


$

705


$

808


$

1,046


$

1,382


$

2,077


$

2,559


$

10,258

Noninterest expense


$

8,599


$

6,472


$

6,277


$

6,796


$

7,429


$

21,348


$

25,665

Net Income


$

4,249


$

4,726


$

4,518


$

4,467


$

4,076


$

13,493


$

13,986

Basic earnings per common share


$

0.66


$

0.74


$

0.70


$

0.69


$

0.63


$

2.11


$

2.14

Diluted earnings per common share


$

0.65


$

0.72


$

0.69


$

0.68


$

0.61


$

2.06


$

2.10

Dividends declared per share


$

0.05


$

0.04


$

0.04


$

0.04


$

0.03


$

0.13


$

0.09























Performance Ratios (annualized)






















Return on average assets



1.02 %



1.18 %



1.24 %



1.29 %



1.18 %



1.14 %



1.25 %

Return on average equity



12.62 %



14.61 %



14.32 %



14.50 %



13.43 %



13.74 %



15.96 %

Average yield on interest-earning assets



4.54 %



3.88 %



3.82 %



4.02 %



3.92 %



4.08 %



3.72 %

Average rate paid on interest-bearing liabilities



1.50 %



1.05 %



0.90 %



0.88 %



0.93 %



1.17 %



0.97 %

Average interest rate spread



3.04 %



2.83 %



2.92 %



3.14 %



2.99 %



2.91 %



2.75 %

Net interest margin, fully taxable equivalent



3.36 %



3.04 %



3.13 %



3.36 %



3.21 %



3.17 %



2.94 %

Efficiency ratio



61.33 %



52.39 %



53.10 %



55.02 %



59.48 %



55.89 %



62.10 %

Noninterest expense to average assets



2.07 %



1.62 %



1.72 %



1.97 %



2.15 %



1.81 %



2.30 %























Capital






















Tier 1 capital leverage ratio (1)



10.00 %



10.09 %



11.06 %



11.29 %



11.04 %



10.00 %



11.04 %

Total risk-based capital ratio (1)



12.78 %



13.33 %



14.01 %



14.02 %



14.22 %



12.78 %



14.22 %

Tier 1 risk-based capital ratio (1)



11.65 %



12.13 %



12.76 %



12.77 %



12.97 %



11.65 %



12.97 %

Common equity tier 1 capital to risk weighted assets (1)



11.65 %



12.13 %



12.76 %



12.77 %



12.97 %



11.65 %



12.97 %

Equity to total assets at end of period



7.65 %



8.19 %



8.31 %



8.38 %



9.09 %



7.65 %



9.09 %

Book value per common share


$

20.85


$

20.25


$

19.70


$

19.28


$

18.69


$

20.85


$

18.69

Tangible book value per common share


$

20.85


$

20.25


$

19.70


$

19.28


$

18.69


$

20.85


$

18.69

Period-end market value per common share


$

20.62


$

21.00


$

22.30


$

20.53


$

20.45


$

20.62


$

20.45

Period-end common shares outstanding



6,467,278



6,552,020



6,515,927



6,500,248



6,588,343



6,467,278



6,588,343

Average basic common shares outstanding



6,393,531



6,413,884



6,417,881



6,448,896



6,510,504



6,408,342



6,528,126

Average diluted common shares outstanding



6,547,791



6,552,763



6,548,380



6,585,511



6,657,250



6,549,691



6,672,314























Asset Quality






















Nonperforming loans


$

1,004


$

921


$

1,006


$

997


$

1,011


$

1,004


$

1,011

Nonperforming loans to total loans



0.07 %



0.07 %



0.08 %



0.08 %



0.09 %



0.07 %



0.09 %

Nonperforming assets to total assets



0.06 %



0.06 %



0.07 %



0.07 %



0.07 %



0.06 %



0.07 %

Allowance for loan and lease losses to total loans



1.05 %



1.11 %



1.20 %



1.26 %



1.36 %



1.05 %



1.36 %

Allowance for loan and lease losses to nonperforming loans



1562.45 %



1686.43 %



1542.74 %



1555.47 %



1531.85 %



1562.45 %



1531.85 %

Net charge-offs (recoveries)


$

(5)


$

(12)


$

(12)


$

(21)


$

8


$

(29)


$

(65)

Annualized net charge-offs (recoveries) to average loans



0.00 %



0.00 %



0.00 %



(0.01 %)



0.00 %



0.00 %



(0.01 %)























Average Balances






















Loans


$

1,439,863


$

1,340,330


$

1,254,639


$

1,173,853


$

1,065,069


$

1,346,613


$

1,006,514

Assets


$

1,662,024


$

1,596,926


$

1,456,003


$

1,381,158


$

1,379,249


$

1,573,180


$

1,487,855

Stockholders' equity


$

134,639


$

129,423


$

126,199


$

123,232


$

121,394


$

130,889


$

116,830


(1) Regulatory capital ratios of CFBank

GAAP TO NON-GAAP RECONCILIATION

This press release contains certain non-GAAP disclosures for: (1) Core Earnings, (2) Core Earnings Per Share, (3) Core Return on Average Assets and (4) Core Return on Average Equity. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operations performance and to enhance investors' overall understanding of such financial performance. Accordingly, we disclose the non-GAAP measures in addition to the related GAAP measures of: (1) Net Income, (2) Earnings Per Share (3) Return on Average Assets and (4) Return on Average Equity.

The table below presents the reconciliation of these GAAP financial measures to the related non-GAAP financial measures ($ in thousands except per share data):










Core Earnings, Core Earnings Per Share, Core Return









on Average Assets and Core Return on Average Equity (unaudited)



















Three Months Ended


September 30,


June 30,


September 30,


2022


2022


2021

Net income (GAAP)

$

4,249


$

4,726


$

4,076

Conversion expenses


627



74



-

Impairment of property and equipment


570



-



-

Gain on sale of deposits


-



-



(1,893)

Income tax effect of non-recurring items


(251)



(16)



398

Core earnings (Non-GAAP)

$

5,195


$

4,784


$

2,581










Diluted earnings per share (GAAP)

$

0.65


$

0.72


$

0.61

Conversion expenses


0.10



0.01



-

Impairment of property and equipment


0.09



-



-

Gain on sale of deposits


-



-



(0.28)

Income tax effect of non-recurring items


(0.04)



-



0.06

Diluted core earnings per share (Non-GAAP)

$

0.80


$

0.73


$

0.39










Return on average assets (a) (GAAP)


1.02 %



1.18 %



1.18 %

Core return on average assets (b) (Non-GAAP)


1.25 %



1.20 %



0.75 %










Return on average equity (c) (GAAP)


12.62 %



14.61 %



13.43 %

Core return on average equity (d) (Non-GAAP)


15.43 %



14.79 %



8.50 %



















(a) Annualized net income divided by average assets









(b) Annualized core earnings divided by average assets









(c) Annualized net income divided by average stockholders' equity









(d) Annualized core earnings divided by average stockholders' equity









Cision View original content:https://www.prnewswire.com/news-releases/cf-bankshares-inc-parent-of-cfbank-na-reports-results-for-the-3rd-quarter-of-2022-301669546.html

SOURCE CF Bankshares Inc.



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