COLUMBUS, Ohio, May 10, 2023
/PRNewswire/ -- CF Bankshares Inc. (NASDAQ: CFBK) (the "Company"),
the parent of CFBank, National Association ("CFBank"), today
announced financial results for the first quarter ended
March 31, 2023.
First Quarter 2023 Highlights
- Net Income for Q1 2023 was $4.4
million ($0.68 per
diluted common share). Pre-provision, pre-tax net revenue ("PPNR")
for Q1 2023 was $5.8
million.
- Return on Average Assets (ROA) was 0.98% and PPNR
ROA was 1.26% for the first quarter, while Return on Average
Equity (ROE) was 12.55% and PPNR ROE was 16.25%.
- Book value per share increased to $21.88 at March
31, 2023.
- Net loans and leases increased by $43.8 million during the quarter. Net loans
and leases totaled $1.6 billion at
March 31, 2023.
- Credit quality remains strong with nonperforming loans to total
loans of 0.04% and loans more than 30 days past due at
0.06% of total loans.
- At March 31, 2023, CFBank's
primary and secondary liquidity (cash plus available borrowing
capacity) totaled $565
million. The estimated amount of CFBank's uninsured
customer deposit accounts was $491
million, or approximately 30.5% of total deposit balances,
as of March 31, 2023.
Recent Developments
- On April 6, 2023, the Company's
Board of Directors declared a Cash Dividend of $0.06 per share payable on April 28, 2023 to shareholders of record as of
the close of business on April 17,
2023. This represents a 20% increase over our previous
quarterly dividend.
CEO and Board Chair Commentary
Timothy T. O'Dell, President and
CEO, commented: "First Quarter Earnings of $0.68 per diluted common share equates to ROE of
12.55% and ROA of 0.98% respectively.
During 2022, CFBank fully completed the transition to a
Commercial Banking-driven business model, having exited the
national direct to consumer (DTC) mortgage lending business.
CFBank continues to offer traditional Retail Mortgage loans to
customers within our regional market footprints.
We have and continue to perform a credible job of protecting our
deposit base during a rapidly rising interest rate environment.
Along with the industry, we are experiencing customer deposit
repricing increases, which in turn place pressure on
margins.
In response to these headwinds, your CF team has been focused on
operating efficiencies as well as expanding our fee-income
businesses. Thus far in 2023, we have implemented efficiencies
which are anticipated to have future overhead savings of greater
than $2 million annualized. In
addition to driving overhead reductions and cost efficiencies, we
have responded with additional initiatives that are increasing
loans tied to the prime rate, while also expanding our fee
income businesses like SWAPS, SBA loans, Treasury Management
services, and saleable Residential Mortgage loans. We have also
recently introduced a credit card product targeting our business
customers.
Our core deposit base remains stable, and is continuing to grow,
due to our strong customer relationships. At March 31, 2023, uninsured deposits made up
approximately 30.5% of total deposits. Looking ahead, we would
anticipate deposit re-pricing opportunities to accompany a return
to lower interest rates.
Our CFBank business model is branch light, that is, we operate a
total of eight physical banking locations for our Bank which has
assets approaching $2 Billion. Our
business model trades off having fewer retail banking offices, with
lower overhead costs including brick and mortar and branch staffing
expenses, against traditionally higher deposit and cost of funds.
Additionally, we leverage technology to service our Commercial and
Consumer customers. We believe our model is more effective and
efficient over the long run than carrying the overhead of a large
branch network.
This new year presents a unique set of operating challenges. We
believe, however, there will be significant opportunities for
adding franchise value. Included in these opportunities
is capturing additional high-quality full-service Commercial,
Cash Management plus other desirable business and personal
relationships. We also expect these "new to CF" customers and
relationships will generate future earnings growth and added
franchise value.
Your seasoned CFBank Leadership Team will continue to remain
nimble, as well as responsive to the changing market and interest
rate conditions.
Steady as we go!"
Robert E. Hoeweler, Chairman of
the Board, added: "We are fortunate to have a seasoned leadership
team as we manage through the current banking industry and economic
headwinds. First and foremost, our focus remains on
maintaining solid banking and business fundamentals. As
always, we appreciate the support of our shareholders and
customers."
Overview of Results
Net income for the three months ended March 31, 2023 totaled $4.4 million (or $0.68 per diluted common share) compared to net
income of $4.7 million (or
$0.72 per diluted common share) for
the three months ended December 31,
2022 and net income of $4.5
million (or $0.69 per diluted
common share) for the three months ended March 31, 2022. Pre-provision, pre-tax net
revenue ("PPNR") for the three months ended March 31, 2023 was $5.8
million compared to PPNR of $6.5
million for the three months ended December 31, 2022 and $5.5
million for the three months ended March 31, 2022.
Net Interest Income and Net Interest Margin
Net interest income totaled $12.7
million for the quarter ended March
31, 2023 and decreased $422,000, or 3.2%, compared to $13.2 million in the prior quarter, and increased
$1.9 million, or 18.2%, compared to
$10.8 million in the first quarter of
2022.
The decrease in net interest income compared to the prior
quarter was primarily due to a $2.7
million, or 30.8%, increase in interest expense, partially
offset by a $2.3 million, or 10.4%,
increase in interest income. The increase in interest expense when
compared to the prior quarter was attributed to a 70bps increase in
the average cost of funds on interest-bearing liabilities, coupled
with a $34.4 million, or 2.5%,
increase in average interest-bearing liabilities. The
increase in interest income was primarily attributed to a 44bps
increase in average yield on interest-earning assets. The net
interest margin of 2.93% for the quarter ended March 31, 2023 decreased 15bps compared to the
net interest margin of 3.08% for the prior quarter.
The increase in net interest income compared to the first
quarter of 2022 was primarily due to an $11.0 million, or 83.8%, increase in interest
income, partially offset by a $9.1
million, or 381.2%, increase in interest expense. The
increase in interest income was primarily attributed to a 174bps
increase in the average yield on interest-earning assets, coupled
with a $357.9 million, or 26.0%,
increase in average interest-earning assets outstanding. The
increase in interest expense was attributed to a 234bps increase in
the average cost of funds on interest-bearing liabilities, coupled
with a $353.3 million, or 33.4%,
increase in average interest-bearing liabilities. The net interest
margin of 2.93% for the quarter ended March
31, 2023 decreased 20bps compared to the net interest margin
of 3.13% for the first quarter of 2022.
Noninterest Income
Noninterest income for the quarter ended March 31, 2023 totaled $719,000 and increased $68,000, or 10.5%, compared to $651,000 for the prior quarter. The
increase was primarily due to a $173,000 loss on redemption of life insurance in
the fourth quarter 2022, partially offset by a $118,000 decrease in swap fee income during the
first quarter of 2023.
Noninterest income for the quarter ended March 31, 2023 decreased $327,000, or 31.3%, compared to $1.0 million for the quarter ended March 31, 2022. The decrease was primarily
due to a $560,000 decrease in net
gain on sales of residential mortgage 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
March 31, 2023, December 31, 2022, and March 31, 2022 (in thousands).
|
|
|
|
|
|
|
|
|
|
Three Months
ended
|
|
March 31,
2023
|
|
December 31,
2022
|
|
March 31,
2022
|
Notional amount of
loans sold
|
$
|
1,991
|
|
$
|
2,717
|
|
$
|
85,180
|
The following table represents the revenue recognized on
mortgage activities for the three months ended March 31, 2023, December
31, 2022, and March 31, 2022
(in thousands).
|
|
|
|
|
|
|
|
|
|
Three Months
ended
|
|
March 31,
2023
|
|
December 31,
2022
|
|
March 31,
2022
|
Gain (loss) on loans
sold
|
$
|
(3)
|
|
$
|
(22)
|
|
$
|
61
|
Gain (loss) from change
in fair value of loans held-for-sale
|
|
-
|
|
|
-
|
|
|
(448)
|
Gain (loss) from change
in fair value of derivatives
|
|
-
|
|
|
-
|
|
|
944
|
|
$
|
(3)
|
|
$
|
(22)
|
|
$
|
557
|
Noninterest Expense
Noninterest expense for the quarter ended March 31, 2023 totaled $7.7 million and increased $418,000, or 5.7%, compared to $7.3 million for the prior quarter. The
increase in noninterest expense was primarily due to a $181,000 increase in other noninterest expense
and a $172,000 increase in salaries
and employee benefits. The increase in other noninterest
expense was primarily due to increased fraud losses on customer
accounts during the quarter ended March
31, 2023. The increase in salaries and employee
benefits was primarily due to increases in payroll taxes, which on
a percentage basis is higher in the first quarter of the year.
Noninterest expense for the quarter ended March 31, 2023 increased $1.4 million, or 22.5%, compared to $6.3 million for the quarter ended March 31, 2022. The increase in noninterest
expense was primarily due to a $365,000 increase in salaries and employee
benefits, a $356,000 increase in
other noninterest expense, a $352,000
increase in FDIC premiums, and a $138,000 increase in advertising and promotion
expense. The increase in salaries and employee benefits was
primarily due to the growth of our commercial loan sales and
treasury management sales teams. The increase in other
noninterest expense was primarily due to a $180,000 increase in fraud losses on customer
accounts, coupled with a $119,000
increase in charitable contributions. The increase in FDIC expense
was related to increased assets and deposit levels and assessment
rates, while the increase in advertising and promotion expense was
related to advertising campaigns for our deposit promotions.
Income Tax Expense
Income tax expense was $1.1
million for the quarter ended March
31, 2023 (effective tax rate of 19.5%), compared to
$1.2 million for the prior quarter
(effective tax rate of 20.8%) and $1.0
million for the quarter ended March
31, 2022 (effective tax rate of 18.5%).
Loans and Loans Held For Sale
Net loans and leases totaled $1.6
billion at March 31, 2023 and
increased $43.8 million, or 2.8%,
from December 31, 2022. The increase
in net loans during the quarter was primarily due to a $16.6 million increase in commercial real estate
loan balances, a $9.0 million
increase in single-family residential loan balances, a $5.8 million increase in home equity lines of
credit, a $5.5 million increase in
multi-family loan balances, a $4.2
million increase in construction loan balances, and a
$2.8 million increase in commercial
loan balances. The increases in the aforementioned loan balances
were related to increased sales activity and new relationships.
The following table presents the recorded investment in loans
and leases for certain non-owner-occupied loan types ($ in
thousands).
|
|
|
|
|
|
March 31,
2023
|
December 31,
2022
|
Construction - 1-4
family*
|
$
|
22,099
|
$
|
26,382
|
Construction -
Multi-family*
|
|
107,841
|
|
112,701
|
Construction -
Non-residential*
|
|
54,790
|
|
52,129
|
Hotel/Motel
|
|
17,211
|
|
17,443
|
Industrial /
Warehouse
|
|
24,511
|
|
25,471
|
Land/Land
Development
|
|
30,848
|
|
30,554
|
Medical/Healthcare/Senior Housing
|
|
443
|
|
469
|
Multi-family
|
|
131,178
|
|
111,848
|
Office
|
|
42,949
|
|
43,885
|
Retail
|
|
27,085
|
|
21,252
|
Other
|
$
|
50,549
|
$
|
49,897
|
*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 $718,000, or
0.04%, of total loans at March 31,
2023, a decrease of $43,000
from nonaccrual loans at December 31,
2022. Loans past due more than 30 days totaled $973,000 at March 31,
2023 compared to $2.1 million
at December 31, 2022.
The allowance for credit losses on loans and leases totaled
$15.9 million at March 31, 2023 compared to $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 0.98% at
March 31, 2023 compared to 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 $237,000 in provision for credit
loss expense for the quarter ended March
31, 2023. There was $637,000 in provision for credit loss expense for
the quarter ended December 31, 2022
and no provision for credit loss expense for the quarter ended
March 31, 2022. Net charge-offs
for the quarter ended March 31, 2023
totaled $5,000 compared to net
charge-offs of $262,000 for the prior
quarter.
Deposits
Deposits totaled $1.6 billion at
March 31, 2023, an increase of
$75.9 million, or 5.0%, when compared
to $1.5 billion at December 31, 2022. The increase when
compared to the prior quarter end is primarily due to a
$69.4 million increase in money
market account balances and a $21.3
million increase in certificate of deposit account balances,
partially offset by a $14.7 million
decrease in checking account balances. Noninterest-bearing
deposit accounts totaled $224.1
million at March 31, 2023 and
decreased $39.1 million from
$263.2 million at December 31, 2022. At March 31, 2023, approximately 30.5% of our
deposit balances exceeded the FDIC insurance limit of $250,000, as compared to approximately 31.6% at
December 31, 2022.
Borrowings
FHLB advances and other debt totaled $137.0 million at March
31, 2023, an increase of $27.5
million, or 25.1%, when compared to $109.5 million at December
31, 2022. The increase when compared to the prior
quarter was due to $23.5 million
increase in short-term FHLB advances and a $4 million increase on the Company's line of
credit with a third party financial institution.
Capital
Stockholders' equity totaled $143.3
million at March 31, 2023, an
increase of $4.1 million, or 2.9%,
from $139.2 million at December 31, 2022. The increase in total
stockholders' equity during the three months ended March 31, 2023 was primarily attributed to net
income, partially offset by a $216,000 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
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,
2021.
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,
current and future economic and financial market conditions,
including ongoing increasing interest rate policies, changes in the
interest rate environment due to economic conditions and the fiscal
and monetary policy measures taken by the U.S. government and the
Federal Reserve Board, including changes in the Federal Funds
Target Rate, in response to such economic conditions, which may
adversely impact interest rates, the interest rate yield curve,
interest margins, loan demand and deposit pricing; the effects of
inflationary pressures and the impact of rising interest rates on
our borrowers' liquidity and ability to repay loans; recent and
future bank failures, which may reduce customer confidence, affect
sources of funding and liquidity (including attraction and
retention of deposits), increase regulatory requirements and costs,
adversely affect financial markets and/or have a negative
reputational impact on the banking industry as a whole; 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, 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
|
|
|
|
March
31,
|
|
|
|
2023
|
|
2022
|
|
%
change
|
Total interest
income
|
$
|
24,176
|
|
$
|
13,152
|
|
84 %
|
Total interest
expense
|
|
11,443
|
|
|
2,378
|
|
381 %
|
Net interest
income
|
|
12,733
|
|
|
10,774
|
|
18 %
|
|
|
|
|
|
|
|
|
Provision for credit
losses
|
|
237
|
|
|
-
|
|
n/m
|
Net interest income
after provision for credit losses
|
|
12,496
|
|
|
10,774
|
|
16 %
|
|
|
|
|
|
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
Service
charges on deposit accounts
|
|
304
|
|
|
266
|
|
14 %
|
Net gain
(loss) on sales of residential mortgage loans
|
|
(3)
|
|
|
557
|
|
n/m
|
Swap fee
income
|
|
30
|
|
|
13
|
|
131 %
|
Other
|
|
388
|
|
|
210
|
|
85 %
|
Noninterest
income
|
|
719
|
|
|
1,046
|
|
-31 %
|
|
|
|
|
|
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Salaries
and employee benefits
|
|
3,986
|
|
|
3,621
|
|
10 %
|
Occupancy
and equipment
|
|
381
|
|
|
319
|
|
19 %
|
Data
processing
|
|
549
|
|
|
520
|
|
6 %
|
Franchise
and other taxes
|
|
299
|
|
|
323
|
|
-7 %
|
Professional fees
|
|
606
|
|
|
607
|
|
0 %
|
Director
fees
|
|
170
|
|
|
141
|
|
21 %
|
Postage,
printing, and supplies
|
|
55
|
|
|
43
|
|
28 %
|
Advertising and marketing
|
|
183
|
|
|
45
|
|
307 %
|
Telephone
|
|
64
|
|
|
53
|
|
21 %
|
Loan
expenses
|
|
172
|
|
|
100
|
|
72 %
|
Depreciation
|
|
133
|
|
|
115
|
|
16 %
|
FDIC
premiums
|
|
503
|
|
|
151
|
|
233 %
|
Regulatory
assessment
|
|
58
|
|
|
66
|
|
-12 %
|
Other
insurance
|
|
47
|
|
|
44
|
|
7 %
|
Other
|
|
485
|
|
|
129
|
|
276 %
|
Noninterest
expense
|
|
7,691
|
|
|
6,277
|
|
23 %
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
5,524
|
|
|
5,543
|
|
0 %
|
Income tax
expense
|
|
1,076
|
|
|
1,025
|
|
5 %
|
Net Income
|
$
|
4,448
|
|
$
|
4,518
|
|
-2 %
|
|
|
|
|
|
|
|
|
Share
Data
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
$
|
0.69
|
|
$
|
0.70
|
|
|
Diluted earnings per
common share
|
$
|
0.68
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
Average common shares
outstanding - basic
|
|
6,402,856
|
|
|
6,417,881
|
|
|
Average common shares
outstanding - diluted
|
|
6,542,698
|
|
|
6,548,380
|
|
|
|
|
|
|
|
|
|
|
n/m - not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Financial Condition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in
thousands)
|
Mar
31,
|
|
Dec
31,
|
|
Sept
30,
|
|
Jun
30,
|
|
Mar
31,
|
|
(unaudited)
|
2023
|
|
2022
|
|
2022
|
|
2022
|
|
2022
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
214,248
|
|
$
|
151,787
|
|
$
|
198,066
|
|
$
|
154,850
|
|
$
|
168,290
|
|
Interest-bearing
deposits in other financial institutions
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
Securities available
for sale
|
|
9,661
|
|
|
10,442
|
|
|
11,436
|
|
|
12,220
|
|
|
13,004
|
|
Equity
Securities
|
|
5,000
|
|
|
5,000
|
|
|
5,000
|
|
|
5,000
|
|
|
5,000
|
|
Loans held for
sale
|
|
591
|
|
|
580
|
|
|
-
|
|
|
-
|
|
|
8,470
|
|
Loans and
leases
|
|
1,631,998
|
|
|
1,588,317
|
|
|
1,489,570
|
|
|
1,393,759
|
|
|
1,296,836
|
|
Less allowance
for credit losses on loans and leases
|
|
(15,915)
|
|
|
(16,062)
|
|
|
(15,687)
|
|
|
(15,532)
|
|
|
(15,520)
|
|
Loans and leases,
net
|
|
1,616,083
|
|
|
1,572,255
|
|
|
1,473,883
|
|
|
1,378,227
|
|
|
1,281,316
|
|
FHLB and FRB
stock
|
|
9,203
|
|
|
7,942
|
|
|
7,633
|
|
|
7,332
|
|
|
7,326
|
|
Premises and equipment,
net
|
|
4,118
|
|
|
3,778
|
|
|
3,792
|
|
|
6,110
|
|
|
6,032
|
|
Other assets held for
sale
|
|
5,500
|
|
|
1,930
|
|
|
1,930
|
|
|
-
|
|
|
-
|
|
Operating lease right
of use assets
|
|
1,930
|
|
|
1,357
|
|
|
1,499
|
|
|
1,638
|
|
|
1,782
|
|
Bank owned life
insurance
|
|
25,791
|
|
|
25,641
|
|
|
26,189
|
|
|
26,038
|
|
|
25,889
|
|
Accrued interest
receivable and other assets
|
|
38,085
|
|
|
39,362
|
|
|
34,514
|
|
|
27,962
|
|
|
26,986
|
|
Total assets
|
$
|
1,930,310
|
|
$
|
1,820,174
|
|
$
|
1,764,042
|
|
$
|
1,619,477
|
|
$
|
1,544,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
bearing
|
$
|
224,096
|
|
$
|
263,241
|
|
$
|
270,945
|
|
$
|
244,484
|
|
$
|
253,778
|
|
Interest bearing
|
|
1,379,745
|
|
|
1,264,681
|
|
|
1,219,038
|
|
|
1,133,005
|
|
|
1,045,008
|
|
Total deposits
|
|
1,603,841
|
|
|
1,527,922
|
|
|
1,489,983
|
|
|
1,377,489
|
|
|
1,298,786
|
|
FHLB advances and other
debt
|
|
136,970
|
|
|
109,461
|
|
|
102,803
|
|
|
75,594
|
|
|
83,235
|
|
Advances by borrowers
for taxes and insurance
|
|
2,132
|
|
|
3,513
|
|
|
2,573
|
|
|
1,879
|
|
|
2,078
|
|
Operating lease
liabilities
|
|
5,572
|
|
|
1,438
|
|
|
1,588
|
|
|
1,736
|
|
|
1,889
|
|
Accrued interest
payable and other liabilities
|
|
23,530
|
|
|
23,670
|
|
|
17,311
|
|
|
15,185
|
|
|
14,972
|
|
Subordinated
debentures
|
|
14,932
|
|
|
14,922
|
|
|
14,912
|
|
|
14,903
|
|
|
14,893
|
|
Total liabilities
|
|
1,786,977
|
|
|
1,680,926
|
|
|
1,629,170
|
|
|
1,486,786
|
|
|
1,415,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
143,333
|
|
|
139,248
|
|
|
134,872
|
|
|
132,691
|
|
|
128,342
|
|
Total liabilities and
stockholders' equity
|
$
|
1,930,310
|
|
$
|
1,820,174
|
|
$
|
1,764,042
|
|
$
|
1,619,477
|
|
$
|
1,544,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balance
Sheet and Yield Analysis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Three Months
Ended
|
|
March 31,
2023
|
|
December 31,
2022
|
|
March 31,
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)
|
$
|
15,197
|
|
$
|
215
|
|
|
4.84 %
|
|
$
|
16,178
|
|
$
|
217
|
|
|
4.75 %
|
|
$
|
20,309
|
|
$
|
224
|
|
|
4.36 %
|
Loans and leases and
loans held
for sale (3)
|
|
1,587,536
|
|
|
22,338
|
|
|
5.63 %
|
|
|
1,522,529
|
|
|
19,971
|
|
|
5.25 %
|
|
|
1,262,051
|
|
|
12,828
|
|
|
4.07 %
|
Other earning
assets
|
|
125,780
|
|
|
1,502
|
|
|
4.78 %
|
|
|
161,904
|
|
|
1,603
|
|
|
3.96 %
|
|
|
89,004
|
|
|
38
|
|
|
0.17 %
|
FHLB and FRB
stock
|
|
8,064
|
|
|
121
|
|
|
6.00 %
|
|
|
7,810
|
|
|
110
|
|
|
5.63 %
|
|
|
7,319
|
|
|
62
|
|
|
3.39 %
|
Total interest-earning
assets
|
|
1,736,577
|
|
|
24,176
|
|
|
5.56 %
|
|
|
1,708,421
|
|
|
21,901
|
|
|
5.12 %
|
|
|
1,378,683
|
|
|
13,152
|
|
|
3.82 %
|
Noninterest-earning
assets
|
|
87,766
|
|
|
|
|
|
|
|
|
86,974
|
|
|
|
|
|
|
|
|
77,320
|
|
|
|
|
|
|
Total
assets
|
$
|
1,824,343
|
|
|
|
|
|
|
|
$
|
1,795,395
|
|
|
|
|
|
|
|
$
|
1,456,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
$
|
1,288,161
|
|
|
10,419
|
|
|
3.24 %
|
|
$
|
1,260,255
|
|
|
7,775
|
|
|
2.47 %
|
|
$
|
956,568
|
|
|
1,684
|
|
|
0.70 %
|
FHLB advances and
other
borrowings
|
|
124,610
|
|
|
1,024
|
|
|
3.29 %
|
|
|
118,083
|
|
|
971
|
|
|
3.29 %
|
|
|
102,860
|
|
|
694
|
|
|
2.70 %
|
Total interest-bearing
liabilities
|
|
1,412,771
|
|
|
11,443
|
|
|
3.24 %
|
|
|
1,378,338
|
|
|
8,746
|
|
|
2.54 %
|
|
|
1,059,428
|
|
|
2,378
|
|
|
0.90 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities
|
|
269,780
|
|
|
|
|
|
|
|
|
279,212
|
|
|
|
|
|
|
|
|
270,376
|
|
|
|
|
|
|
Total
liabilities
|
|
1,682,551
|
|
|
|
|
|
|
|
|
1,657,550
|
|
|
|
|
|
|
|
|
1,329,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
141,792
|
|
|
|
|
|
|
|
|
137,845
|
|
|
|
|
|
|
|
|
126,199
|
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
1,824,343
|
|
|
|
|
|
|
|
$
|
1,795,395
|
|
|
|
|
|
|
|
$
|
1,456,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest-earning
assets
|
$
|
323,806
|
|
|
|
|
|
|
|
$
|
330,083
|
|
|
|
|
|
|
|
$
|
319,255
|
|
|
|
|
|
|
Net interest
income/interest rate
spread
|
|
|
|
$
|
12,733
|
|
|
2.32 %
|
|
|
|
|
$
|
13,155
|
|
|
2.58 %
|
|
|
|
|
$
|
10,774
|
|
|
2.92 %
|
Net interest
margin
|
|
|
|
|
|
|
|
2.93 %
|
|
|
|
|
|
|
|
|
3.08 %
|
|
|
|
|
|
|
|
|
3.13 %
|
Average
interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to average
interest-bearing
liabilities
|
|
122.92 %
|
|
|
|
|
|
|
|
|
123.95 %
|
|
|
|
|
|
|
|
|
130.13 %
|
|
|
|
|
|
|
|
|
(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
|
($ in thousands
except per share data)
|
|
Mar
31,
|
|
Dec
31,
|
|
Sept
30,
|
|
Jun
30,
|
|
Mar
31,
|
(unaudited)
|
|
2023
|
|
2022
|
|
2022
|
|
2022
|
|
2022
|
Earnings and
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
12,733
|
|
$
|
13,155
|
|
$
|
13,316
|
|
$
|
11,545
|
|
$
|
10,774
|
Provision for credit
losses
|
|
$
|
237
|
|
$
|
637
|
|
$
|
150
|
|
$
|
-
|
|
$
|
-
|
Noninterest
income
|
|
$
|
719
|
|
$
|
651
|
|
$
|
705
|
|
$
|
808
|
|
$
|
1,046
|
Noninterest
expense
|
|
$
|
7,691
|
|
$
|
7,273
|
|
$
|
8,599
|
|
$
|
6,472
|
|
$
|
6,277
|
Net Income
|
|
$
|
4,448
|
|
$
|
4,671
|
|
$
|
4,249
|
|
$
|
4,726
|
|
$
|
4,518
|
Basic earnings per
common share
|
|
$
|
0.69
|
|
$
|
0.73
|
|
$
|
0.66
|
|
$
|
0.74
|
|
$
|
0.70
|
Diluted earnings per
common share
|
|
$
|
0.68
|
|
$
|
0.72
|
|
$
|
0.65
|
|
$
|
0.72
|
|
$
|
0.69
|
Dividends declared per
share
|
|
$
|
0.05
|
|
$
|
0.05
|
|
$
|
0.05
|
|
$
|
0.04
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios
(annualized)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
|
0.98 %
|
|
|
1.04 %
|
|
|
1.02 %
|
|
|
1.18 %
|
|
|
1.24 %
|
Return on average
equity
|
|
|
12.55 %
|
|
|
13.55 %
|
|
|
12.62 %
|
|
|
14.61 %
|
|
|
14.32 %
|
Average yield on
interest-earning assets
|
|
|
5.56 %
|
|
|
5.12 %
|
|
|
4.54 %
|
|
|
3.88 %
|
|
|
3.82 %
|
Average rate paid on
interest-bearing liabilities
|
|
|
3.24 %
|
|
|
2.54 %
|
|
|
1.50 %
|
|
|
1.05 %
|
|
|
0.90 %
|
Average interest rate
spread
|
|
|
2.32 %
|
|
|
2.58 %
|
|
|
3.04 %
|
|
|
2.83 %
|
|
|
2.92 %
|
Net interest margin,
fully taxable equivalent
|
|
|
2.93 %
|
|
|
3.08 %
|
|
|
3.36 %
|
|
|
3.04 %
|
|
|
3.13 %
|
Efficiency
ratio
|
|
|
57.17 %
|
|
|
52.68 %
|
|
|
61.33 %
|
|
|
52.39 %
|
|
|
53.10 %
|
Noninterest expense to
average assets
|
|
|
1.69 %
|
|
|
1.62 %
|
|
|
2.07 %
|
|
|
1.62 %
|
|
|
1.72 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital leverage
ratio (1)
|
|
|
10.02 %
|
|
|
9.89 %
|
|
|
10.00 %
|
|
|
10.09 %
|
|
|
11.06 %
|
Total risk-based
capital ratio (1)
|
|
|
12.93 %
|
|
|
12.74 %
|
|
|
12.78 %
|
|
|
13.33 %
|
|
|
14.01 %
|
Tier 1 risk-based
capital ratio (1)
|
|
|
11.84 %
|
|
|
11.65 %
|
|
|
11.65 %
|
|
|
12.13 %
|
|
|
12.76 %
|
Common equity tier 1
capital to risk weighted
assets (1)
|
|
|
11.84 %
|
|
|
11.65 %
|
|
|
11.65 %
|
|
|
12.13 %
|
|
|
12.76 %
|
Equity to total assets
at end of period
|
|
|
7.43 %
|
|
|
7.65 %
|
|
|
7.65 %
|
|
|
8.19 %
|
|
|
8.31 %
|
Book value per common
share
|
|
$
|
21.88
|
|
$
|
21.43
|
|
$
|
20.85
|
|
$
|
20.25
|
|
$
|
19.70
|
Tangible book value per
common share
|
|
$
|
21.88
|
|
$
|
21.43
|
|
$
|
20.85
|
|
$
|
20.25
|
|
$
|
19.70
|
Period-end market value
per common share
|
|
$
|
19.50
|
|
$
|
21.18
|
|
$
|
20.62
|
|
$
|
21.00
|
|
$
|
22.30
|
Period-end common
shares outstanding
|
|
|
6,549,991
|
|
|
6,496,824
|
|
|
6,467,278
|
|
|
6,552,020
|
|
|
6,515,927
|
Average basic common
shares outstanding
|
|
|
6,402,856
|
|
|
6,363,552
|
|
|
6,393,531
|
|
|
6,413,884
|
|
|
6,417,881
|
Average diluted common
shares outstanding
|
|
|
6,542,698
|
|
|
6,491,820
|
|
|
6,547,791
|
|
|
6,552,763
|
|
|
6,548,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
|
$
|
718
|
|
$
|
761
|
|
$
|
1,004
|
|
$
|
921
|
|
$
|
1,006
|
Nonperforming loans to
total loans
|
|
|
0.04 %
|
|
|
0.05 %
|
|
|
0.07 %
|
|
|
0.07 %
|
|
|
0.08 %
|
Nonperforming assets to
total assets
|
|
|
0.04 %
|
|
|
0.04 %
|
|
|
0.06 %
|
|
|
0.06 %
|
|
|
0.07 %
|
Allowance for credit
losses on loans and leases to
total loans and leases
|
|
|
0.98 %
|
|
|
1.01 %
|
|
|
1.05 %
|
|
|
1.11 %
|
|
|
1.20 %
|
Allowance for credit
losses on loans and leases to
nonperforming loans and leases
|
|
|
2216.57 %
|
|
|
2110.64 %
|
|
|
1562.45 %
|
|
|
1686.43 %
|
|
|
1542.74 %
|
Net charge-offs
(recoveries)
|
|
$
|
5
|
|
$
|
262
|
|
$
|
(5)
|
|
$
|
(12)
|
|
$
|
(12)
|
Annualized net
charge-offs (recoveries) to average
loans
|
|
|
0.00 %
|
|
|
0.07 %
|
|
|
0.00 %
|
|
|
0.00 %
|
|
|
0.00 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
1,603,237
|
|
$
|
1,537,941
|
|
$
|
1,439,863
|
|
$
|
1,340,330
|
|
$
|
1,254,639
|
Assets
|
|
$
|
1,824,343
|
|
$
|
1,795,395
|
|
$
|
1,662,024
|
|
$
|
1,596,926
|
|
$
|
1,456,003
|
Stockholders'
equity
|
|
$
|
141,792
|
|
$
|
137,845
|
|
$
|
134,639
|
|
$
|
129,423
|
|
$
|
126,199
|
|
|
(1)
|
Regulatory capital
ratios of CFBank
|
GAAP TO NON-GAAP RECONCILIATION
This press release contains certain non-GAAP disclosures for:
(1) PPNR, (2) PPNR return on average assets and (3) 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)
net earnings (2) return on average assets and (3) 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
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
2023
|
|
2022
|
|
2022
|
Net income
|
$
|
4,448
|
|
$
|
4,671
|
|
$
|
4,518
|
Add: Provision for
credit losses
|
|
237
|
|
|
637
|
|
|
-
|
Add: Income tax
expense
|
|
1,076
|
|
|
1,225
|
|
|
1,025
|
Pre-provision, pre-tax
net revenue
|
$
|
5,761
|
|
$
|
6,533
|
|
$
|
5,543
|
|
|
|
|
|
|
|
|
|
Average
Assets
|
$
|
1,824,343
|
|
$
|
1,795,395
|
|
$
|
1,456,003
|
Average Stockholders'
Equity
|
$
|
141,792
|
|
$
|
137,845
|
|
$
|
126,199
|
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
0.98 %
|
|
|
1.04 %
|
|
|
1.24 %
|
PPNR return on average
assets (2)
|
|
1.26 %
|
|
|
1.46 %
|
|
|
1.52 %
|
|
|
|
|
|
|
|
|
|
Return on average
equity (3)
|
|
12.55 %
|
|
|
13.55 %
|
|
|
14.32 %
|
PPNR return on average
equity (4)
|
|
16.25 %
|
|
|
18.96 %
|
|
|
17.57 %
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
View original
content:https://www.prnewswire.com/news-releases/cf-bankshares-inc-parent-of-cfbank-na-reports-results-for-the-1st-quarter-2023-301820814.html
SOURCE CF BANKSHARES INC.