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CF BANKSHARES INC., PARENT OF CFBANK NA, REPORTS RESULTS FOR THE 2ND QUARTER 2023.

CFBK

COLUMBUS, Ohio, Aug. 3, 2023 /PRNewswire/ -- CF Bankshares Inc. (NASDAQ: CFBK) (the "Company"), the parent of CFBank, National Association ("CFBank"), today announced financial results for the second quarter ended June 30, 2023.

Second Quarter and First Half 2023 Highlights

  • Net Income was $4.2 million($0.66per diluted common share) for the second quarter and $8.7 million YTD ($1.35 per diluted common share). Pre-provision, pre-tax net revenue ("PPNR") for Q2 2023 was $5.3 millionand$11.1 millionYTD.
  • Return on Average Assets (ROA) was 0.88% and PPNR ROA was 1.11% for the second quarter, while Return on Average Equity (ROE) was 11.60% and PPNR ROE was 14.54%.
  • Book value per share increased to $22.49 at June 30, 2023.
  • Noninterest income for Q2 2023 was up 36% when compared to Q1 2023.
  • Deposit balances increased $56 million, or 4% during the quarter.
  • Credit quality remains strong with nonperforming loans to total loans of 0.05% and loans more than 30 days past due at 0.11% of total loans.
  • At June 30, 2023, CFBank's primary and secondary liquidity (cash plus available borrowing capacity) totaled $638 million. The estimated amount of CFBank's uninsured customer deposit accounts was $480 million, or approximately 28.9% of total deposit balances, as of June 30, 2023.

Recent Developments

  • On July 10, 2023, the Company's Board of Directors declared a Cash Dividend of $0.06 per share payable on August 1, 2023 to shareholders of record as of the close of business on July 21, 2023.

CEO and Board Chair Commentary

Timothy T. O'Dell, President and CEO, commented: "Our CFBK Earnings were $4.2 Million, or $0.66 cents per share, for Q2. Our Book Value at June 30, 2023 was $22.49 per share.

Our CF Team has been proactive in responding early on to Margin pressures boosting loan pricing and deposit requirements beginning early this year.

Loan growth has been modest during the first half of the year. Presently, we are pleased to report that both our Loan and Deposit Pipelines are increasing. Our objective and expectation for the second half of 2023 is to outrun elevated loan payoffs experienced during the second quarter and anticipated during the third quarter of this year. These payoffs are mostly Commercial Real Estate loans moving to permanent financing sources. Our business objectives include taking advantage of continuing quality new business relationship opportunities throughout all of our markets during the second half of this year.

In addition to significant commercial loan payoffs during the second quarter, our Residential Mortgage Lending Business also experienced roughly $10 Million of low-rate loans being paid off. We successfully replaced this low-rate runoff at higher interest rates, while absorbing the remaining unrecognized loan origination expenses during Q2. We expect this to provide a future lift to our Margin and Earnings.

We continue to opportunistically make investments in our CF Banking Team, focused on adding proven revenue generators for growing our Deposit and Fee Income businesses.

The current operating environment, with high interest rates coupled with an inverted yield curve, remains highly challenging. However, we believe that we are adjusting successfully and, as a general statement, seeing signs of improving stabilization along with positive impacts from our ongoing loan pricing initiatives. Our total assets continue to increase, to $1.96 Billion at June 30, 2023, and we anticipate surpassing $2 Billion in total assets during 2023.

"We remain very encouraged going forward by our continued access to quality new full relationship Loan and Deposit business. Additionally, we are gaining traction in growing our Fee Income businesses including good acceptance of our recently launched Business Credit Card product offering.

Steady as we go!"

Robert E. Hoeweler, Chairman of the Board, added: "Our over-achieving Business principle is to serve well the needs of our customers and our communities. Our concentration on the basics, the blocking and tackling of banking if you will, has us well positioned. Our seasoned CFBank Leadership Team has once again successfully reacted to the current economic situation quickly and decisively as reflected in our Q2 results."

Overview of Results

Net income for the three months ended June 30, 2023 totaled $4.2 million (or $0.66 per diluted common share) compared to net income of $4.4 million (or $0.68 per diluted common share) for the three months ended March 31, 2023 and net income of $4.7 million (or $0.72 per diluted common share) for the three months ended June 30, 2022. Pre-provision, pre-tax net revenue ("PPNR") for the three months ended June 30, 2023 was $5.3 million compared to PPNR of $5.8 million for the three months ended March 31, 2023 and $5.9 million for the three months ended June 30, 2022.

Net income for the six months ended June 30, 2023 totaled $8.7 million (or $1.35 per diluted common share) compared to net income of $9.2 million (or $1.41 per diluted common share) for the six months ended June 30, 2022.

Net Interest Income and Net Interest Margin

Net interest income totaled $11.5 million for the quarter ended June 30, 2023 and decreased $1.2 million, or 9.8%, compared to $12.7 million in the prior quarter, and decreased $59,000, or 0.5%, compared to $11.5 million in the second quarter of 2022.

The decrease in net interest income compared to the prior quarter was primarily due to a $3.2 million, or 28.8%, increase in interest expense, partially offset by a $2.0 million, or 8.5%, increase in interest income. The increase in interest expense when compared to the prior quarter was attributed to a 65bps increase in the average cost of funds on interest-bearing liabilities, coupled with a $101.4 million, or 7.2%, increase in average interest-bearing liabilities. The increase in interest income was primarily attributed to an $80.3 million, or 4.6%, increase in average interest-earning assets, coupled with 20bps increase in average yield on interest-earning assets. The net interest margin of 2.52% for the quarter ended June 30, 2023 decreased 41bps compared to the net interest margin of 2.93% for the prior quarter.

The decrease in net interest income compared to the second quarter of 2022 was primarily due to a $11.6 million, or 366.4%, increase in interest expense, partially offset by a $11.5 million, or 78.3%, increase in interest income. The increase in interest expense was attributed to a 284bps increase in the average cost of funds on interest-bearing liabilities, coupled with a $313.5 million, or 26.1%, increase in average interest-bearing liabilities. The increase in interest income was primarily attributed to a 188bps increase in the average yield on interest-earning assets, coupled with a $301.3 million, or 19.9%, increase in average interest-earning assets outstanding. The net interest margin of 2.52% for the quarter ended June 30, 2023 decreased 52bps compared to the net interest margin of 3.04% for the second quarter of 2022.

Noninterest Income

Noninterest income for the quarter ended June 30, 2023 totaled $978,000 and increased $259,000, or 36.0%, compared to $719,000 for the prior quarter. The increase was primarily due to a $112,000 increase in swap fee income and a $75,000 increase in service charges on deposit accounts.

Noninterest income for the quarter ended June 30, 2023 increased $170,000, or 21.0%, compared to $808,000 for the quarter ended June 30, 2022. The increase was primarily due to a $167,000 increase in other noninterest income related to commercial loan servicing fees, a $137,000 increase in swap fee income, partially offset by a $143,000 decrease in net gain on sale of commercial loans.

During the second quarter 2022, we exited the DTC mortgage loan business in favor of traditional Retail mortgage lending to customers in our Regional markets. The following table represents the notional amount of loans sold during the three months ended June 30, 2023, March 31, 2023, and June 30, 2022 (in thousands).


Three Months ended


June 30, 2023


March 31, 2023


June 30, 2022

Notional amount of loans sold

$

3,171


$

1,991


$

9,368

The following table represents the revenue recognized on mortgage activities for the three months ended June 30, 2023, March 31, 2023, and June 30, 2022 (in thousands).


Three Months ended


June 30, 2023


March 31, 2023


June 30, 2022

Gain (loss) on loans sold

$

40


$

(3)


$

(103)

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


-



-



92

Gain (loss) from change in fair value of derivatives


-



-



132


$

40


$

(3)


$

121

Noninterest Expense

Noninterest expense for the quarter ended June 30, 2023 totaled $7.2 million and decreased $518,000, or 6.7%, compared to $7.7 million for the prior quarter. The decrease in noninterest expense was primarily due to a $303,000 decrease in other noninterest expense and a $208,000 decrease in salaries and employee benefits. The decrease in other noninterest expense was primarily due to fraud losses on customer accounts that occurred in the first quarter of 2023. The decrease in salaries and employee benefits was primarily due to a decrease in the number of employees coupled with lower payroll taxes.

Noninterest expense for the quarter ended June 30, 2023 increased $701,000, or 10.8%, compared to $6.5 million for the quarter ended June 30, 2022. The increase in noninterest expense was primarily due to a $292,000 increase in FDIC premiums and a $200,000 increase in salaries and employee benefits. The increase in FDIC expense was related to increased assets and deposit levels and assessment rates. The increase in salaries and employee benefits was primarily due to a decline in deferred salary costs related to lower origination volumes.

Income Tax Expense

Income tax expense was $1.1 million for the quarter ended June 30, 2023 (effective tax rate of 20.0%), compared to $1.1 million for the prior quarter (effective tax rate of 19.5%) and $1.2 million for the quarter ended June 30, 2022 (effective tax rate of 19.6%).

Loans and Loans Held For Sale

Net loans and leases totaled $1.6 billion at June 30, 2023 and increased $15.1 million, or 0.9%, from the prior quarter and increased $58.9 million, or 3.7%, from December 31, 2022. The increase in net loans during the quarter was primarily due to a $9.6 million increase in commercial loan balances, a $5.9 million increase in construction loan balances, and a $1.2 million increase in commercial real estate loan balances, partially offset by a $1.0 million decrease in single-family residential loan balances. The increases in the aforementioned loan balances were related to increased sales activity and new relationships.

The increase in net loans and leases from December 31, 2022 was primarily due to a $17.8 million increase in commercial real estate loan balances, a $12.4 million increase in commercial loan balances, a $10.1 million increase in construction loan balances, an $8.0 million increase in single-family residential loan balances, a $5.8 million increase in home equity lines of credit, and a $5.4 million increase in multi-family loan balances. 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).


June 30, 2023

March 31, 2023

Construction - 1-4 family*

$

13,968

$

22,099

Construction - Multi-family*


122,211


107,841

Construction - Non-residential*


55,886


54,790

Hotel/Motel


17,134


17,211

Industrial / Warehouse


26,543


24,511

Land/Land Development


21,557


30,848

Medical/Healthcare/Senior Housing


417


443

Multi-family


140,797


131,178

Office


43,152


42,949

Retail


26,900


27,085

Other


51,368


50,549


*CFBank possesses a core competency and deep expertise in Construction Lending. The construction lending business sector has produced many full banking relationships with proven developers with long successful track records.

Asset Quality

Nonaccrual loans were $799,000, or 0.05%, of total loans at June 30, 2023, an increase of $81,000 from nonaccrual loans at March 31, 2023 and an increase of $38,000 from nonaccrual loans at December 31, 2022. Loans past due more than 30 days totaled $1.9 million at June 30, 2023 compared to $1.0 million at March 31, 2023 and $2.1 million at December 31, 2022.

The allowance for credit losses on loans and leases totaled $16.0 million at June 30, 2023 compared to $15.9 million at March 31, 2023 and $16.1 million at December 31, 2022. The ratio of the allowance for credit losses on loans and leases to total loans and leases was 0.97% at June 30, 2023 compared to 0.98% at March 31, 2023 and 1.01% at December 31, 2022.

On January 1, 2023, the Company adopted CECL, which resulted in an increase to the reserve for credit losses of $49,000. There was $12,000 in provision for credit loss expense for the quarter ended June 30, 2023, a $237,000 provision for credit loss expense for the quarter ended March 31, 2023 and no provision for credit loss expense for the quarter ended June 30, 2022. Net recoveries for the quarter ended June 30, 2023 totaled $108,000 compared to net charge-offs of $5,000 for the prior quarter and net recoveries of $12,000 for the quarter ended June 30, 2022.

Subsequent to June 30, 2023, CFBank was notified of a potential credit issue with the borrower on a participation loan of which we are not the lead bank. The balance of CFBank's participation was $2.9 million as of June 30, 2023. The lead bank is currently gathering additional information to determine the impact.

Deposits

Deposits totaled $1.7 billion at June 30, 2023, an increase of $56.2 million, or 3.5%, when compared to $1.6 billion at March 31, 2023, and an increase of $132.2 million, or 8.6%, when compared to $1.5 billion at December 31 2022. The increase when compared to the prior quarter end is primarily due to a $35.2 million increase in certificate of deposit account balances and a $28.6 million increase in money market account balances, partially offset by a $6.5 million decrease in checking account balances and a $1.1 million decrease in savings account balances.

The increase in deposits when compared to December 31, 2022 is primarily due to a $98.0 million increase in money market account balances and a $56.5 million increase in certificate of deposit account balances, partially offset by a $21.1 million decrease in checking account balances and a $1.2 million decrease in savings account balances.

Noninterest-bearing deposit accounts totaled $217.0 million at June 30, 2023 and decreased $7.1 million from $224.1 million at March 31, 2023 and decreased $46.2 million from $263.2 million at December 31, 2022. At June 30, 2023, approximately 28.8% of our deposit balances exceeded the FDIC insurance limit of $250,000, as compared to approximately 30.5% at March 31, 2023 and 31.6% at December 31, 2022.

Borrowings

FHLB advances and other debt totaled $110.0 million at June 30, 2023, a decrease of $27.0 million, or 19.7%, when compared to $137.0 million at March 31, 2023 and an increase of $517,000 when compared to $109.5 million at December 31, 2022. The decrease when compared to the prior quarter was due to the repayment of an FHLB short-term advance. The increase when compared to December 31, 2022 was due to a $4.0 million increase on the Company's line of credit with a third party financial institution, partially offset by a $3.5 million decrease in FHLB advances.

Capital

Stockholders' equity totaled $147.3 million at June 30, 2023, an increase of $4.0 million, or 2.8%, from $143.3 million at March 31, 2023. Stockholders' equity increased $8.1 million, or 5.8%, from $139.2 million at December 31, 2022. The increase in total stockholders' equity during the three months ended June 30, 2023 was primarily attributed to net income, partially offset by a $148,000 increase in other comprehensive loss. The increase in total stockholders' equity during the six months ended June 30, 2023 was primarily attributed to net income, partially offset by a $364,000 increase in 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 Tangible book value per common share, Pre-Provision, Pre-Tax Net Revenue (PPNR), PPNR Return on Average Assets (PPNR ROA) and PPNR Return on Average Equity (PPNR ROE). 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 in excess 20%.

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 was recognized in CB Resource Inc.'s Durable Performance Index which highlighted banks who have maintained above average performance based on 11 key performance indicators over the three-year period ended September 30, 2022. In addition, 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, 2022.

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 those 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, 2022, 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 quarter ended March 31, 2023.

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




Six months ended




June 30,




June 30,




2023


2022


%
change


2023


2022


%
change

Total interest income

$

26,225


$

14,705


78 %


$

50,401



27,857


81 %

Total interest expense


14,739



3,160


366 %



26,182



5,538


373 %

Net interest income


11,486



11,545


-1 %



24,219



22,319


9 %

















Provision for credit losses


12



-


n/m



249



-


n/m

Net interest income after provision for credit losses


11,474



11,545


-1 %



23,970



22,319


7 %

















Noninterest income
















Service charges on deposit accounts


379



289


31 %



683



555


23 %

Net gain on sales of residential mortgage loans


40



121


-67 %



37



678


-95 %

Net gain on sale of commercial loans


-



143


-100 %



-



143


-100 %

Swap fee income


142



5


2740 %



172



18


856 %

Other


417



250


67 %



805



460


75 %

Noninterest income


978



808


21 %



1,697



1,854


-8 %

















Noninterest expense
















Salaries and employee benefits


3,778



3,578


6 %



7,764



7,199


8 %

Occupancy and equipment


456



312


46 %



837



631


33 %

Data processing


487



529


-8 %



1,036



1,049


-1 %

Franchise and other taxes


328



338


-3 %



627



661


-5 %

Professional fees


632



645


-2 %



1,238



1,252


-1 %

Director fees


164



153


7 %



334



294


14 %

Postage, printing, and supplies


37



38


-3 %



92



81


14 %

Advertising and marketing


71



134


-47 %



254



179


42 %

Telephone


72



61


18 %



136



114


19 %

Loan expenses


187



106


76 %



359



206


74 %

Depreciation


148



126


17 %



281



241


17 %

FDIC premiums


519



227


129 %



1,022



378


170 %

Regulatory assessment


60



65


-8 %



118



131


-10 %

Other insurance


52



46


13 %



99



90


10 %

Other


182



114


60 %



667



243


174 %

Noninterest expense


7,173



6,472


11 %



14,864



12,749


17 %

















Income before income taxes


5,279



5,881


-10 %



10,803



11,424


-5 %

Income tax expense


1,056



1,155


-9 %



2,132



2,180


-2 %

Net Income

$

4,223


$

4,726


-11 %


$

8,671


$

9,244


-6 %

















Share Data
















Basic earnings per common share

$

0.66


$

0.74




$

1.35


$

1.44



Diluted earnings per common share

$

0.66


$

0.72




$

1.35


$

1.41



















Average common shares outstanding - basic


6,418,305



6,413,884





6,410,624



6,415,871



Average common shares outstanding - diluted


6,433,623



6,552,763





6,431,508



6,550,620



















n/m - not meaningful
















Consolidated Statements of Financial Condition
































($ in thousands)

Jun 30,


Mar 31,


Dec 31,


Sept 30,


Jun 30,


(unaudited)

2023


2023


2022


2022


2022


Assets
















Cash and cash equivalents

$

231,600


$

214,248


$

151,787


$

198,066


$

154,850


Interest-bearing deposits in other financial institutions


100



100



100



100



100


Securities available for sale


8,966



9,661



10,442



11,436



12,220


Equity Securities


5,000



5,000



5,000



5,000



5,000


Loans held for sale


1,355



591



580



-



-


Loans and leases


1,647,103



1,631,998



1,588,317



1,489,570



1,393,759


Less allowance for credit losses on loans and leases


(15,960)



(15,915)



(16,062)



(15,687)



(15,532)


Loans and leases, net


1,631,143



1,616,083



1,572,255



1,473,883



1,378,227


FHLB and FRB stock


8,736



9,203



7,942



7,633



7,332


Premises and equipment, net


4,085



4,118



3,778



3,792



6,110


Other assets held for sale


-



1,930



1,930



1,930



-


Operating lease right of use assets


5,313



5,500



1,357



1,499



1,638


Bank owned life insurance


25,946



25,791



25,641



26,189



26,038


Accrued interest receivable and other assets


40,605



38,085



39,362



34,514



27,962


Total assets

$

1,962,849


$

1,930,310


$

1,820,174


$

1,764,042


$

1,619,477


































Liabilities and Stockholders' Equity
















Deposits
















Noninterest bearing

$

216,966


$

224,096


$

263,241


$

270,945


$

244,484


Interest bearing


1,443,117



1,379,745



1,264,681



1,219,038



1,133,005


Total deposits


1,660,083



1,603,841



1,527,922



1,489,983



1,377,489


FHLB advances and other debt


109,978



136,970



109,461



102,803



75,594


Advances by borrowers for taxes and insurance


2,034



2,132



3,513



2,573



1,879


Operating lease liabilities


5,388



5,572



1,438



1,588



1,736


Accrued interest payable and other liabilities


23,084



23,530



23,670



17,311



15,185


Subordinated debentures


14,941



14,932



14,922



14,912



14,903


Total liabilities


1,815,508



1,786,977



1,680,926



1,629,170



1,486,786


















Stockholders' equity


147,341



143,333



139,248



134,872



132,691


Total liabilities and stockholders' equity

$

1,962,849


$

1,930,310


$

1,820,174


$

1,764,042


$

1,619,477


Average Balance Sheet and Yield Analysis





















































For Three Months Ended


June 30, 2023


March 31, 2023


June 30, 2022


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)

$

14,406


$

213



4.94 %


$

15,197


$

215



4.84 %


$

17,744


$

221



4.58 %

Loans and leases and loans held
for sale (3)


1,627,516



23,684



5.82 %



1,587,536



22,338



5.63 %



1,327,636



14,042



4.23 %

Other earning assets


165,843



2,190



5.28 %



125,780



1,502



4.78 %



162,912



364



0.89 %

FHLB and FRB stock


9,133



138



6.04 %



8,064



121



6.00 %



7,329



78



4.26 %

Total interest-earning assets


1,816,898



26,225



5.76 %



1,736,577



24,176



5.56 %



1,515,621



14,705



3.88 %

Noninterest-earning assets


92,456









87,766









81,305







Total assets

$

1,909,354








$

1,824,343








$

1,596,926


































Interest-bearing liabilities:



























Deposits

$

1,388,672



13,660



3.93 %


$

1,288,161



10,419



3.24 %


$

1,108,079



2,501



0.90 %

FHLB advances and other
borrowings


125,505



1,079



3.44 %



124,610



1,024



3.29 %



92,612



659



2.85 %

Total interest-bearing liabilities


1,514,177



14,739



3.89 %



1,412,771



11,443



3.24 %



1,200,691



3,160



1.05 %




























Noninterest-bearing liabilities


249,608









269,780









266,812







Total liabilities


1,763,785









1,682,551









1,467,503


































Equity


145,569









141,792









129,423







Total liabilities and equity

$

1,909,354








$

1,824,343








$

1,596,926


































Net interest-earning assets

$

302,721








$

323,806








$

314,930







Net interest income/interest rate
spread




$

11,486



1.87 %





$

12,733



2.32 %





$

11,545



2.83 %

Net interest margin








2.52 %









2.93 %









3.04 %

Average interest-earning assets



























to average interest-bearing
liabilities


119.99 %









122.92 %









126.23 %









(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 allowance for credit losses on loans and leases and includes nonperforming loans and leases.

Consolidated Financial Highlights





















At or for the three months ended


At or for the six months
ended

($ in thousands except per share data)


Jun 30,


Mar 31,


Dec 31,


Sept 30,


Jun 30,



June 30,

(unaudited)


2023


2023


2022


2022


2022



2023



2022

Earnings and Dividends






















Net interest income


$

11,486


$

12,733


$

13,155


$

13,316


$

11,545


$

24,219


$

22,319

Provision for credit losses


$

12


$

237


$

637


$

150


$

-


$

249


$

-

Noninterest income


$

978


$

719


$

651


$

705


$

808


$

1,697


$

1,854

Noninterest expense


$

7,173


$

7,691


$

7,273


$

8,599


$

6,472


$

14,864


$

12,749

Net Income


$

4,223


$

4,448


$

4,671


$

4,249


$

4,726


$

8,671


$

9,244

Basic earnings per common share


$

0.66


$

0.69


$

0.73


$

0.66


$

0.74


$

1.35


$

1.44

Diluted earnings per common share


$

0.66


$

0.68


$

0.72


$

0.65


$

0.72


$

1.35


$

1.41

Dividends declared per share


$

0.06


$

0.05


$

0.05


$

0.05


$

0.04


$

0.11


$

0.08























Performance Ratios (annualized)






















Return on average assets



0.88 %



0.98 %



1.04 %



1.02 %



1.18 %



0.93 %



1.21 %

Return on average equity



11.60 %



12.55 %



13.55 %



12.62 %



14.61 %



12.07 %



14.47 %

Average yield on interest-earning assets



5.76 %



5.56 %



5.12 %



4.54 %



3.88 %



5.66 %



3.85 %

Average rate paid on interest-bearing
liabilities



3.89 %



3.24 %



2.54 %



1.50 %



1.05 %



3.58 %



0.98 %

Average interest rate spread



1.87 %



2.32 %



2.58 %



3.04 %



2.83 %



2.08 %



2.87 %

Net interest margin, fully taxable
equivalent



2.52 %



2.93 %



3.08 %



3.36 %



3.04 %



2.72 %



3.08 %

Efficiency ratio



57.55 %



57.17 %



52.68 %



61.33 %



52.39 %



57.35 %



52.74 %

Noninterest expense to average assets



1.50 %



1.69 %



1.62 %



2.07 %



1.62 %



1.59 %



1.67 %























Capital






















Tier 1 capital leverage ratio (1)



9.82 %



10.02 %



9.89 %



10.00 %



10.09 %



9.82 %



10.09 %

Total risk-based capital ratio (1)



13.24 %



12.93 %



12.74 %



12.78 %



13.33 %



13.24 %



13.33 %

Tier 1 risk-based capital ratio (1)



12.15 %



11.84 %



11.65 %



11.65 %



12.13 %



12.15 %



12.13 %

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



12.15 %



11.84 %



11.65 %



11.65 %



12.13 %



12.15 %



12.13 %

Equity to total assets at end of period



7.51 %



7.43 %



7.65 %



7.65 %



8.19 %



7.51 %



8.19 %

Book value per common share


$

22.49


$

21.88


$

21.43


$

20.85


$

20.25


$

22.49


$

20.25

Tangible book value per common share


$

22.49


$

21.88


$

21.43


$

20.85


$

20.25


$

22.49


$

20.25

Period-end market value per common
share


$

15.00


$

19.50


$

21.18


$

20.62


$

21.00


$

15.00


$

21.00

Period-end common shares outstanding



6,550,950



6,549,991



6,496,824



6,467,278



6,552,020



6,550,950



6,552,020

Average basic common shares
outstanding



6,418,305



6,402,856



6,363,552



6,393,531



6,413,884



6,410,624



6,415,871

Average diluted common shares
outstanding



6,433,623



6,542,698



6,491,820



6,547,791



6,552,763



6,431,508



6,550,620























Asset Quality






















Nonperforming loans


$

799


$

718


$

761


$

1,004


$

921


$

799


$

921

Nonperforming loans to total loans



0.05 %



0.04 %



0.05 %



0.07 %



0.07 %



0.05 %



0.07 %

Nonperforming assets to total assets



0.04 %



0.04 %



0.04 %



0.06 %



0.06 %



0.04 %



0.06 %

Allowance for credit losses on loans and
leases to total loans and leases



0.97 %



0.98 %



1.01 %



1.05 %



1.11 %



0.97 %



1.11 %

Allowance for credit losses on loans and
leases to nonperforming loans and leases



1997.50 %



2216.57 %



2110.64 %



1562.45 %



1686.43 %



1997.50 %



1686.43 %

Net charge-offs (recoveries)


$

(108)


$

5


$

262


$

(5)


$

(12)


$

(103)


$

(24)

Annualized net charge-offs (recoveries)
to average loans



(0.03 %)



0.00 %



0.07 %



0.00 %



0.00 %



(0.01 %)



0.00 %























Average Balances






















Loans


$

1,642,961


$

1,603,237


$

1,537,941


$

1,439,863


$

1,340,330


$

1,623,207


$

1,297,484

Assets


$

1,909,354


$

1,824,343


$

1,795,395


$

1,662,024


$

1,596,926


$

1,867,082


$

1,526,465

Stockholders' equity


$

145,569


$

141,792


$

137,845


$

134,639


$

129,423


$

143,689


$

127,811


(1) Regulatory capital ratios of CFBank

GAAP TO NON-GAAP RECONCILIATION

This press release contains certain non-GAAP disclosures for: (1) Tangible book value per common share (2) PPNR, (3) PPNR return on average assets and (4) PPNR 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. In particular, the use of PPNR is prevalent among banking regulators, investors, and analysts. Accordingly, we disclose the non-GAAP measures in addition to the related GAAP measures of: (1) book value per common share (2) net earnings (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:

Pre-provision, pre-tax net revenue ("PPNR"),












PPNR Return on Average Assets and PPNR Return on Average Equity























Three Months Ended


Six months ended


June 30,


March 31,


June 30,


June 30,


2023


2023


2022


2023


2022

Net income

$

4,223


$

4,448


$

4,726


$

8,671


$

9,244

Add: Provision for credit losses


12



237



-



249



-

Add: Income tax expense


1,056



1,076



1,155



2,132



2,180

Pre-provision, pre-tax net revenue

$

5,291


$

5,761


$

5,881


$

11,052


$

11,424
















Average Assets

$

1,909,354


$

1,824,343


$

1,596,926


$

1,867,082


$

1,526,465

Average Stockholders' Equity

$

145,569


$

141,792


$

129,423


$

143,689


$

127,811
















Return on average assets (1)


0.88 %



0.98 %



1.18 %



0.93 %



1.21 %

PPNR return on average assets (2)


1.11 %



1.26 %



1.47 %



1.18 %



1.50 %
















Return on average equity (3)


11.60 %



12.55 %



14.61 %



12.07 %



14.47 %

PPNR return on average equity (4)


14.54 %



16.25 %



18.18 %



15.38 %



17.88 %
















(1) Annualized net income divided by average assets









(2) Annualized PPNR divided by average assets









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









(4) Annualized PPNR 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-2nd-quarter-2023-301892130.html

SOURCE CF BANKSHARES INC.