COLUMBUS,
Ohio, July 28, 2020
/PRNewswire/ -- CF Bankshares Inc. (formerly known as Central
Federal Corporation) (NASDAQ: CFBK) (the "Company"), the parent of
CFBank, today announced financial results for the second quarter
and year to date ended June 30,
2020.
Second Quarter 2020 Highlights
- Net income of $10.1 million,
an increase of 342% when compared to the same quarter of
2019.
- Pre-Provision, Pre-Tax Net Revenue ("PPNR") of $15.8 million compared to $2.9 million in Q2 2019, which represents a 453%
increase.
- Return of average assets (ROA) was 3.70% for the quarter and
PPNR return on average assets was 5.81%.
- Return on average equity (ROE) for the quarter was 47.0%
compared to 18.8% for the same quarter of 2019.
- Total assets topped $1 Billion
as of June 30, 2020.
- Book value per common share increased to $14.14 at June 30,
2020, which represents a $1.29
per share increase during the second quarter.
- Noninterest-bearing deposit balances increased 42% during
the 2nd quarter.
- Funded $126.2 million of
Paycheck Protection Program ("PPP") Loans to 558
borrowers.
Timothy T. O'Dell, President and
CEO, commented, "We are extremely pleased with our record Q2 net
income of $10.1 million, up 342% over
Q2 2019. During the first six months of this year, we have
surpassed our full year net income for 2019. For the second
quarter, we achieved ROA of 3.7% coupled with ROE of 47%. Our
record earnings also reflected increased provisioning, with over
$3 million added to ALLL during Q2
(43% increase to ALLL).
"Our Q2 highlights also included our total assets topping
$1 billion and book value surpassing
$14/share. During the second
quarter, we also achieved noninterest income of nearly $20 million, driven mostly through successful
expansion of our national mortgage lending business.
"You might recall, we went somewhat against the prevailing
grain/consensus earlier when we invested in expanding our mortgage
lending business. However, based upon earlier mortgage lending
industry experience, and our commitment to expanding Noninterest
Income, we concluded that having a strong mortgage lending business
coupled with our Commercial Banking businesses would provide
business balance and diversification along with providing for
increased customer acquisition and greater cross-selling
opportunities. We believe the result of quality customer
acquisition drives increased franchise value.
"Among our key initiatives for the second half of 2020, we will
be looking to capitalize on cross-selling to new Commercial and
Consumer banking customers. Our successes with the PPP
lending program opened doors to relationships with new to CFBank
businesses, resulting in new commercial, deposit and cash
management business. Given the expected continuation of the
current low interest rate environment, we remain optimistic about
the outlook for our mortgage lending business.
"During the second half of 2020, we feel we are well positioned
to continue capitalizing on our strong first half momentum, by
investing in growing our core lines of businesses. Also, we are
focused on increasing our market presence in those regional metro
markets that we serve along with expanding our deposit gathering
franchise. The impact of COVID-19 on our borrowers and credit
quality, remains unclear. Our credit quality at June 30, 2020 remained strong, and our loan
deferrals are modest at approximately 12% of outstanding loan
balances at June 30, 2020. We
anticipate gaining greater clarity as we move forward in Q3 and
Q4. During Q2 we increased our ALLL by roughly 43%, while
producing record earnings. We will continue to monitor and
adjust as we gain additional insights and experience.
"Onward & Upward!"
Robert E. Hoeweler, Chairman of
the Board, added: "In late 2012 our group of investors provided
funds and management to recapitalize the Company and CFBank. The
assets of CFBank had decreased to approximately $230 million at the time of the recapitalization.
Since then, we have increased CFBank's assets over four fold to
$1.15 billion assets in just under 8
years. Our team has achieved this growth through very difficult
economic times. Our growth was accomplished with a firm commitment
to attracting top performing customers and strong credit
quality. We have built a banking team of which we are very
proud. I would like to give thanks to Tim
O'Dell for his clear vision and leadership for these past 8
years, thanks to my fellow directors for their support of
management, and thanks to our employees for their dedication, long
hours, and hard work. We are proud of reaching over a billion in
assets but we are just getting started."
Overview of Results
Net income for the three months ended June 30, 2020 totaled $10.1 million (or $1.53 per diluted common share) and increased
$7.8 million, or 341.6%, compared to
net income of $2.3 million (or
$0.55 per diluted common share) for
the three months ended June 30,
2019.
Net income for the six months ended June
30, 2020 totaled $12.1 million
(or $1.82 per diluted common share)
and increased $8.1 million, or
204.8%, compared to net income of $4.0
million (or $0.93 per diluted
common share) for the six months ended June
30, 2019.
Net interest income. Net interest income
totaled $6.3 million for the quarter
ended June 30, 2020 and increased
$1.1 million, or 20.2%, compared to
net interest income of $5.2 million
for the quarter ended June 30,
2019. The increase in net interest income was primarily due
to a $1.4 million, or 16.0%, increase
in interest income, partially offset by a $309,000, or 9.4%, increase in interest
expense. The increase in interest income was primarily
attributed to a $360.7 million, or
53.2%, increase in average interest-earning assets outstanding,
resulting primarily from an increase in net loans and loans held
for sale, partially offset by a 121bps decrease in average yield on
interest-earning assets. The increase in interest expense was
attributed to a $290.8 million, or
53.7%, increase in average interest-bearing liabilities, partially
offset by a 70bps decrease in the average cost of funds on
interest-bearing liabilities. The net interest margin of
2.42% for the quarter ended June 30,
2020 decreased 66bps compared to the net interest margin of
3.08% for the quarter ended June 30,
2019.
Net interest income totaled $12.4
million for the six months ended June
30, 2020 and increased $2.1
million, or 20.1%, compared to net interest income of
$10.3 million for the six months
ended June 30, 2019. The
increase in net interest income was primarily due to a $3.4 million, or 20.1%, increase in interest
income, partially offset by a $1.3
million, or 21.1%, increase in interest expense. The
increase in interest income was primarily attributed to a
$288.7 million, or 43.9%, increase in
average interest-earning assets outstanding, resulting primarily
from an increase in net loans and loans held for sale, partially
offset by an 81bps decrease in average yield on interest-earning
assets. The increase in interest expense was attributed to a
$241.6 million, or 46.4%, increase in
average interest-bearing liabilities, partially offset by a 41bps
decrease in the average cost of funds on interest-bearing
liabilities. The net interest margin of 2.62% for the six
months ended June 30, 2020 decreased
52bps compared to the net interest margin of 3.14% for the six
months ended June 30, 2019.
Provision for loan and lease losses. The
provision for loan and lease losses expense for the quarter ended
June 30, 2020 was $3.1 million compared to no provision for loan
and lease losses expense for the quarter ended June 30, 2019. The increase in the provision for
loan and lease losses was a reflection of the increased economic
stress associated with the pandemic and specific consideration of
its impact on certain industries. Net charge-offs for the
quarter ended June 30, 2020 totaled
$91,000, compared to net recoveries
of $5,000 for the quarter ended
June 30, 2019.
The provision for loan and lease losses expense for the six
months ended June 30, 2020 was
$3.1 million compared to no provision
for loan and lease losses expense for the six months ended
June 30, 2019. As noted above,
the increase in the provision for loan and lease losses was a
reflection of the increased economic stress associated with the
pandemic and specific consideration of its impact on certain
industries. Net charge-offs for the six months ended
June 30, 2020 totaled $156,000, compared to net recoveries of
$17,000 for the six months ended
June 30, 2019.
Noninterest income. Noninterest
income for the quarter ended June 30,
2020 totaled $19.9 million and
increased $17.3 million, or 674.1%,
compared to $2.6 million for the
quarter ended June 30, 2019.
The increase was primarily due to a $17.3 million increase in net gain on sale of
loans. The increase in net gain on sale of loans was
primarily a result of increased sales volume related to our
residential mortgage lending business.
Noninterest income for the six months ended June 30, 2020 totaled $23.3 million and increased $19.0 million, or 447.1%, compared to
$4.3 million for the quarter ended
June 30, 2019. The increase was
primarily due to an $18.6 million
increase in net gain on sale of loans, coupled with a $407,000 increase in swap fee income. The
increase in net gain on sale of loans was primarily a result of
increased sales volume related to our residential mortgage lending
business. The increase in swap fee income was due to an
increase in customer swap transactions.
Noninterest expense. Noninterest
expense for the quarter ended June 30,
2020 totaled $10.3 million and
increased $5.4 million, or 109.1%,
compared to $4.9 million for the
quarter ended June 30, 2019.
The increase in noninterest expense during the three months ended
June 30, 2020 was primarily due to a
$3.6 million increase in salaries and
employee benefits expense, an $826,000 increase in professional fees expense,
and a $632,000 increase in
advertising and marketing expense. The increase in salaries and
employee benefits expense was primarily due to the expansion of our
residential mortgage lending business, consistent with our focus on
driving noninterest income, coupled with an increase in personnel
to support our growth, infrastructure and risk management
practices. The increase in professional fees was related to
increased activities, volumes and outsourcing in our residential
mortgage business. The increase in advertising and marketing
expense was primarily due to increased expenditures related to
leads-based marketing to drive revenue growth in our residential
mortgage lending business.
Noninterest expense for the six months ended June 30, 2020 totaled $17.4 million and increased $7.8 million, or 80.3%, compared to $9.6 million for the six months ended
June 30, 2019. The increase in
noninterest expense during the six months ended June 30, 2020 was primarily due to a $4.2 million increase in salaries and employee
benefits expense, a $1.5 million
increase in professional fees expense, and a $1.3 million increase in advertising and
marketing expense. The increase in salaries and employee benefits
expense was primarily due to the expansion of our residential
mortgage lending business, consistent with our focus on driving
noninterest income, coupled with an increase in personnel to
support our growth, infrastructure and risk management
practices. The increase in professional fees was related to
increased activities, volumes and outsourcing in our residential
mortgage business. The increase in advertising and marketing
expense was primarily due to increased expenditures related to
leads-based marketing to drive revenue growth in our residential
mortgage lending business.
Income tax expense. Income tax expense was
$2.6 million for the quarter ended
June 30, 2020, an increase of
$2.0 million, compared to
$583,000 for the quarter ended
June 30, 2019. The effective
tax rate for the quarter ended June 30,
2020 was approximately 20.7%, as compared to approximately
20.4% for the quarter ended June 30,
2019.
Income tax expense was $3.2
million for the six months ended June
30, 2020, an increase of $2.2
million, compared to $1.0
million for the quarter ended June
30, 2019. The effective tax rate for the quarter ended
June 30, 2020 was approximately
20.7%, as compared to approximately 20.2% for the quarter ended
June 30, 2019.
Balance Sheet Activity
General. Assets totaled $1.1 billion at June 30,
2020 and increased $265.5
million, or 30.2%, from $880.5
million at December 31,
2019. The increase was primarily due to a $183.2 million increase in net loan balances, a
$31.5 million increase in cash and
cash equivalents, and a $30.2 million
increase in loans held for sale.
Cash and cash equivalents. Cash and
cash equivalents totaled $77.4
million at June 30, 2020, and
increased $31.5 million, or 68.7%,
from $45.9 million at December 31, 2019. The increase in cash and
cash equivalents was primarily attributed to increases in FHLB
advances and other borrowings and deposits, partially offset by an
increase in net loans and loans held for sale.
Securities. Securities available for sale
totaled $10.8 million at June 30, 2020, and increased $2.6 million, or 32.2%, compared to $8.2 million at December
31, 2019. The increase was due to security purchases,
partially offset by principal maturities.
Loans held for sale. Loans held for sale
totaled $165.9 million at
June 30, 2020 and increased
$30.2 million, or 22.2%, from
$135.7 million at December 31, 2019.
Loans and Leases. Net loans and leases
totaled $846.5 million at
June 30, 2020, and increased
$183.2 million, or 27.6%, from
$663.3 million at December 31, 2019. The increase was
primarily due to a $156.9 million
increase in commercial loan balances, a $24.7 million increase in commercial real estate
loan balances, an $8.0 million
increase in single-family residential loan balances, and a
$7.4 million increase in multi-family
loan balances, partially offset by an $8.1
million decrease in construction loan balances. The
increases in the aforementioned loan balances were primarily due to
the origination and funding of $126.2
million of loans under the SBA's Paycheck Protection Program
(PPP), coupled with increased sales activity and new
relationships. The decrease in construction loan balances was
primarily due to the completion of construction projects.
The following table presents the recorded investment in loans
and leases for certain non-owner occupied loan types ($ in
thousands)
|
|
|
|
|
|
|
June 30,
2020
|
|
March 31,
2020
|
Construction - 1-4
family
|
$
|
10,555
|
|
$
|
11,551
|
Construction -
Multi-family
|
|
30,404
|
|
|
27,385
|
Construction -
Non-residential
|
|
26,333
|
|
|
24,292
|
Hotel/Motel
|
|
12,983
|
|
|
14,681
|
Industrial /
Warehouse
|
|
38,361
|
|
|
38,219
|
Land/Land
Development
|
|
27,871
|
|
|
27,912
|
Medical/Healthcare/Senior Housing
|
|
5,582
|
|
|
5,632
|
Multi-family
|
|
42,651
|
|
|
47,275
|
Office
|
|
26,972
|
|
|
28,656
|
Retail
|
|
32,042
|
|
|
36,154
|
Other
|
$
|
29,430
|
|
$
|
15,524
|
Allowance for loan and lease losses (ALLL).
The allowance for loan and lease losses totaled $10.1 million at June 30,
2020, and increased $3.0
million, or 41.6%, from $7.1 million at December 31, 2019. The increase in the ALLL
is due to $3.1 million in the
provision for loan and lease losses expense, partially offset by
net charge-offs during the six months ended June 30, 2020. The ratio of the ALLL to
total loans was 1.18% at June 30,
2020, compared to 1.06% at December
31, 2019. The ratio of the ALLL to total loans,
excluding loan balances subject to SBA guarantees, was 1.40% at
June 30, 2020, compared to 1.07% at
December 31, 2019.
Deposits. Deposits totaled
$849.0 million at June 30, 2020, an increase of $102.7 million, or 13.8%, from $746.3 million at December
31, 2019. The increase is due to a $70.0 million increase in interest-bearing
deposit accounts and a $32.7 million
increase in noninterest-bearing account balances.
Interest-bearing deposit accounts increased to $700.8 million at June 30,
2020, from $630.8 million at
December 31, 2019. The increase
in interest-bearing accounts is primarily attributed to a
$36.2 million increase in certificate
of deposit account balances, a $16.9
million increase in money market account balances, and a
$14.7 million increase in
interest-bearing checking account balances. The increase in
certificate of deposit account balances was due to increases in
retail and listing service certificates of deposits, partially
offset by a decrease in brokered certificates of deposit. The
increases in retail certificate of deposits and money market
account balances were primarily due to increases in customer
relationships and balances from on-going sales and marketing
activities. The increase in interest-bearing checking is primarily
related to the balances in the Insured Cash Sweep (ICS) programs
offered through Promontory Interfinancial Network. The
increase in noninterest bearing checking account balances was
primarily driven by PPP loan proceeds being deposited into
customers' accounts.
Stockholders' equity. Stockholders'
equity totaled $92.6 million at
June 30, 2020, an increase of
$11.9 million, or 14.8%, from
$80.7 million at December 31, 2019. The increase in total
stockholders' equity was primarily attributed to net
income.
About CF Bankshares Inc. and CFBank
CF Bankshares Inc., formerly known as Central Federal
Corporation, is a financial holding company that owns 100% of the
stock of CFBank, National Association (CFBank). CFBank is a
boutique Commercial bank headquartered in Columbus, Ohio. CFBank has focused on
bettering the Ohio economy and
serving the financial needs of closely held businesses since 1892.
Over a century has passed, and yet, our focus remains the same:
guide fellow Ohioans to financial stability and success with
agility, ease, and care. CFBank grew from a Federal Savings
Association to a National Bank in December of 2016. As CFBank has
expanded, we've maintained our penchant for individualized service
and direct customer access to decision makers. CFBank now has
locations in four major metro Ohio
markets - Columbus, Cleveland, Cincinnati, and Akron, as well as branch locations in
Columbiana Country (two locations). In every location, CFBank
provides commercial loans and leases, commercial and residential
real estate loans and treasury management depository services,
corporate treasury management, residential lending, and full
service retail banking services and products. In addition, CFBank
also has a national residential lending platform. CFBank is
also glad to offer its clients the convenience of online internet
banking, mobile banking, and remote deposit.
Additional information about the Company and CFBank is available
at www.CFBankOnline.com
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) and PPNR Return on
Average Assets. 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."
FORWARD LOOKING STATEMENTS
This earnings 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 the
effects of various governmental responses to the pandemic,
including stimulus packages and programs; potential
litigation or other risks related to participating in the U.S.
Small Business Administration Paycheck Protection Program; and
those additional risks detailed from time to time in our reports
filed with the SEC, including those 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,
2019, and in "Item 1A. Risk Factors" of Part II of our
Quarterly Report on Form 10-Q filed with the SEC for the quarter
ended March 31, 2020.
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 earnings 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,
|
|
|
|
2020
|
|
2019
|
|
%
change
|
|
2020
|
|
2019
|
|
%
change
|
Total interest
income
|
$
|
9,868
|
|
$
|
8,505
|
|
16%
|
|
$
|
19,814
|
|
$
|
16,446
|
|
20%
|
Total interest
expense
|
|
3,585
|
|
|
3,276
|
|
9%
|
|
|
7,408
|
|
|
6,117
|
|
21%
|
Net interest
income
|
|
6,283
|
|
|
5,229
|
|
20%
|
|
|
12,406
|
|
|
10,329
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
and lease losses
|
|
3,125
|
|
|
-
|
|
n/m
|
|
|
3,125
|
|
|
-
|
|
n/m
|
Net interest income
after provision for loan and lease
losses
|
|
3,158
|
|
|
5,229
|
|
-40%
|
|
|
9,281
|
|
|
10,329
|
|
-10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts
|
|
139
|
|
|
138
|
|
1%
|
|
|
290
|
|
|
262
|
|
11%
|
Net gain
on sales of loans
|
|
19,625
|
|
|
2,362
|
|
731%
|
|
|
22,469
|
|
|
3,865
|
|
481%
|
Swap fee
income
|
|
14
|
|
|
-
|
|
n/m
|
|
|
407
|
|
|
-
|
|
n/m
|
Other
|
|
78
|
|
|
65
|
|
20%
|
|
|
134
|
|
|
132
|
|
2%
|
Noninterest
income
|
|
19,856
|
|
|
2,565
|
|
674%
|
|
|
23,300
|
|
|
4,259
|
|
447%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries
and employee benefits
|
|
6,250
|
|
|
2,643
|
|
136%
|
|
|
9,295
|
|
|
5,144
|
|
81%
|
Occupancy and equipment
|
|
247
|
|
|
228
|
|
8%
|
|
|
500
|
|
|
446
|
|
12%
|
Data
processing
|
|
427
|
|
|
293
|
|
46%
|
|
|
874
|
|
|
609
|
|
44%
|
Franchise and other taxes
|
|
184
|
|
|
106
|
|
74%
|
|
|
363
|
|
|
212
|
|
71%
|
Professional fees
|
|
1,182
|
|
|
356
|
|
232%
|
|
|
2,187
|
|
|
644
|
|
240%
|
Director
fees
|
|
221
|
|
|
133
|
|
66%
|
|
|
379
|
|
|
264
|
|
44%
|
Postage,
printing and supplies
|
|
58
|
|
|
59
|
|
-2%
|
|
|
116
|
|
|
126
|
|
-8%
|
Advertising and marketing
|
|
1,248
|
|
|
616
|
|
103%
|
|
|
2,523
|
|
|
1,242
|
|
103%
|
Telephone
|
|
52
|
|
|
45
|
|
16%
|
|
|
106
|
|
|
90
|
|
18%
|
Loan
expenses
|
|
65
|
|
|
45
|
|
44%
|
|
|
162
|
|
|
91
|
|
78%
|
Foreclosed assets, net
|
|
-
|
|
|
-
|
|
n/m
|
|
|
-
|
|
|
(9)
|
|
n/m
|
Depreciation
|
|
94
|
|
|
78
|
|
21%
|
|
|
180
|
|
|
149
|
|
21%
|
FDIC
premiums
|
|
134
|
|
|
152
|
|
-12%
|
|
|
291
|
|
|
304
|
|
-4%
|
Regulatory assessment
|
|
45
|
|
|
40
|
|
13%
|
|
|
90
|
|
|
82
|
|
10%
|
Other
insurance
|
|
27
|
|
|
24
|
|
13%
|
|
|
54
|
|
|
47
|
|
15%
|
Other
|
|
79
|
|
|
113
|
|
-30%
|
|
|
237
|
|
|
184
|
|
29%
|
Noninterest
expense
|
|
10,313
|
|
|
4,931
|
|
109%
|
|
|
17,357
|
|
|
9,625
|
|
80%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
12,701
|
|
|
2,863
|
|
344%
|
|
|
15,224
|
|
|
4,963
|
|
207%
|
Income tax
expense
|
|
2,633
|
|
|
583
|
|
352%
|
|
|
3,150
|
|
|
1,002
|
|
214%
|
Net Income
|
|
10,068
|
|
|
2,280
|
|
342%
|
|
$
|
12,074
|
|
$
|
3,961
|
|
205%
|
Accretion of discount
and value of warrants exercised
related to Series B preferred stock
|
|
-
|
|
|
157
|
|
n/m
|
|
|
-
|
|
|
183
|
|
n/m
|
Earnings allocated to
participating securities (Series C
preferred stock)
|
|
(1,218)
|
|
|
-
|
|
n/m
|
|
|
(1,866)
|
|
|
-
|
|
n/m
|
Net Income
attributable to common stockholders
|
$
|
8,850
|
|
$
|
2,437
|
|
263%
|
|
$
|
10,208
|
|
$
|
4,144
|
|
146%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
$
|
1.54
|
|
$
|
0.55
|
|
|
|
$
|
1.84
|
|
$
|
0.95
|
|
|
Diluted earnings per
common share
|
$
|
1.53
|
|
$
|
0.55
|
|
|
|
$
|
1.82
|
|
$
|
0.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares
outstanding - basic
|
|
5,739,097
|
|
|
4,412,726
|
|
|
|
|
5,536,521
|
|
|
4,384,395
|
|
|
Average common shares
outstanding - diluted
|
|
5,802,578
|
|
|
4,452,637
|
|
|
|
|
5,601,447
|
|
|
4,435,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/m - not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Financial Condition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in
thousands)
|
Jun
30,
|
|
Mar
31,
|
|
Dec
31,
|
|
Sept
30,
|
|
Jun
30,
|
|
(unaudited)
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
77,376
|
|
$
|
75,352
|
|
$
|
45,879
|
|
$
|
37,299
|
|
$
|
34,323
|
|
Interest-bearing
deposits in other financial institutions
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
Securities available
for sale
|
|
10,802
|
|
|
11,390
|
|
|
8,174
|
|
|
9,183
|
|
|
10,189
|
|
Loans held for
sale
|
|
165,891
|
|
|
115,197
|
|
|
135,711
|
|
|
82,382
|
|
|
52,184
|
|
Loans and
leases
|
|
856,636
|
|
|
714,941
|
|
|
670,441
|
|
|
637,516
|
|
|
605,724
|
|
Less allowance
for loan and lease losses
|
|
(10,107)
|
|
|
(7,073)
|
|
|
(7,138)
|
|
|
(7,057)
|
|
|
(7,029)
|
|
Loans and leases,
net
|
|
846,529
|
|
|
707,868
|
|
|
663,303
|
|
|
630,459
|
|
|
598,695
|
|
FHLB and FRB
stock
|
|
5,216
|
|
|
4,510
|
|
|
4,008
|
|
|
3,969
|
|
|
3,816
|
|
Premises and
equipment, net
|
|
4,005
|
|
|
4,040
|
|
|
3,991
|
|
|
4,052
|
|
|
4,032
|
|
Operating lease right
of use assets
|
|
1,588
|
|
|
1,685
|
|
|
1,780
|
|
|
1,874
|
|
|
1,967
|
|
Bank owned life
insurance
|
|
5,416
|
|
|
5,381
|
|
|
5,345
|
|
|
5,309
|
|
|
5,272
|
|
Accrued interest
receivable and other assets
|
|
29,165
|
|
|
19,842
|
|
|
12,254
|
|
|
11,810
|
|
|
10,415
|
|
Total
assets
|
$
|
1,146,088
|
|
$
|
945,365
|
|
$
|
880,545
|
|
$
|
786,437
|
|
$
|
720,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
bearing
|
$
|
148,188
|
|
$
|
104,322
|
|
$
|
115,530
|
|
$
|
110,378
|
|
$
|
106,716
|
|
Interest bearing
|
|
700,850
|
|
|
644,183
|
|
|
630,793
|
|
|
575,569
|
|
|
521,870
|
|
Total deposits
|
|
849,038
|
|
|
748,505
|
|
|
746,323
|
|
|
685,947
|
|
|
628,586
|
|
FHLB advances and
other debt
|
|
165,806
|
|
|
82,594
|
|
|
29,017
|
|
|
22,500
|
|
|
18,500
|
|
Advances by borrowers
for taxes and insurance
|
|
782
|
|
|
636
|
|
|
929
|
|
|
509
|
|
|
340
|
|
Operating lease
liabilities
|
|
1,750
|
|
|
1,856
|
|
|
1,960
|
|
|
2,062
|
|
|
2,163
|
|
Accrued interest
payable and other liabilities
|
|
21,320
|
|
|
14,078
|
|
|
6,846
|
|
|
6,741
|
|
|
5,698
|
|
Subordinated
debentures
|
|
14,825
|
|
|
14,815
|
|
|
14,806
|
|
|
14,796
|
|
|
14,786
|
|
Total liabilities
|
|
1,053,521
|
|
|
862,484
|
|
|
799,881
|
|
|
732,555
|
|
|
670,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
92,567
|
|
|
82,881
|
|
|
80,664
|
|
|
53,882
|
|
|
50,920
|
|
Total liabilities and
stockholders' equity
|
$
|
1,146,088
|
|
$
|
945,365
|
|
$
|
880,545
|
|
$
|
786,437
|
|
$
|
720,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
|
2020
|
|
|
2019
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
6,283
|
|
$
|
6,123
|
|
$
|
6,040
|
|
$
|
5,331
|
|
$
|
5,229
|
|
$
|
12,406
|
|
$
|
10,329
|
Provision for loan
and lease losses
|
|
$
|
3,125
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
3,125
|
|
$
|
-
|
Noninterest
income
|
|
$
|
19,856
|
|
$
|
3,444
|
|
$
|
4,174
|
|
$
|
3,287
|
|
$
|
2,565
|
|
$
|
23,300
|
|
$
|
4,259
|
Noninterest
expense
|
|
$
|
10,313
|
|
$
|
7,044
|
|
$
|
6,426
|
|
$
|
5,328
|
|
$
|
4,931
|
|
$
|
17,357
|
|
$
|
9,625
|
Net Income
|
|
$
|
10,068
|
|
$
|
2,006
|
|
$
|
3,023
|
|
$
|
2,617
|
|
$
|
2,280
|
|
$
|
12,074
|
|
$
|
3,961
|
Basic earnings per
common share
|
|
$
|
1.54
|
|
$
|
0.31
|
|
$
|
0.51
|
|
$
|
0.59
|
|
$
|
0.55
|
|
$
|
1.84
|
|
$
|
0.95
|
Diluted earnings per
common share
|
|
$
|
1.53
|
|
$
|
0.30
|
|
$
|
0.51
|
|
$
|
0.59
|
|
$
|
0.55
|
|
$
|
1.82
|
|
$
|
0.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios
(annualized)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
|
3.70%
|
|
|
0.90%
|
|
|
1.45%
|
|
|
1.41%
|
|
|
1.28%
|
|
|
2.43%
|
|
|
1.15%
|
Return on average
equity
|
|
|
47.02%
|
|
|
9.81%
|
|
|
16.83%
|
|
|
20.12%
|
|
|
18.77%
|
|
|
28.84%
|
|
|
16.73%
|
Average yield on
interest-earning assets
|
|
|
3.80%
|
|
|
4.66%
|
|
|
4.94%
|
|
|
5.00%
|
|
|
5.01%
|
|
|
4.19%
|
|
|
5.00%
|
Average rate paid on
interest-bearing
liabilities
|
|
|
1.72%
|
|
|
2.21%
|
|
|
2.36%
|
|
|
2.45%
|
|
|
2.42%
|
|
|
1.94%
|
|
|
2.35%
|
Average interest rate
spread
|
|
|
2.08%
|
|
|
2.45%
|
|
|
2.58%
|
|
|
2.55%
|
|
|
2.59%
|
|
|
2.25%
|
|
|
2.65%
|
Net interest margin,
fully taxable
equivalent
|
|
|
2.42%
|
|
|
2.87%
|
|
|
3.04%
|
|
|
3.02%
|
|
|
3.08%
|
|
|
2.62%
|
|
|
3.14%
|
Efficiency
ratio
|
|
|
39.45%
|
|
|
73.63%
|
|
|
62.91%
|
|
|
61.82%
|
|
|
63.27%
|
|
|
48.61%
|
|
|
65.98%
|
Noninterest expense
to average assets
|
|
|
3.79%
|
|
|
3.15%
|
|
|
3.09%
|
|
|
2.87%
|
|
|
2.77%
|
|
|
3.50%
|
|
|
2.78%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital
leverage ratio (1)
|
|
|
10.44%
|
|
|
10.68%
|
|
|
10.58%
|
|
|
10.03%
|
|
|
9.44%
|
|
|
10.44%
|
|
|
9.44%
|
Total risk-based
capital ratio (1)
|
|
|
14.01%
|
|
|
13.23%
|
|
|
12.96%
|
|
|
12.09%
|
|
|
11.95%
|
|
|
14.01%
|
|
|
11.95%
|
Tier 1 risk-based
capital ratio (1)
|
|
|
12.77%
|
|
|
12.29%
|
|
|
11.97%
|
|
|
11.01%
|
|
|
10.79%
|
|
|
12.77%
|
|
|
10.79%
|
Common equity tier 1
capital to risk
weighted assets (1)
|
|
|
12.77%
|
|
|
12.29%
|
|
|
11.97%
|
|
|
11.01%
|
|
|
10.79%
|
|
|
12.77%
|
|
|
10.79%
|
Equity to total
assets at end of period
|
|
|
8.08%
|
|
|
8.77%
|
|
|
9.16%
|
|
|
6.85%
|
|
|
7.06%
|
|
|
8.08%
|
|
|
7.06%
|
Book value per common
share
|
|
$
|
14.14
|
|
$
|
12.85
|
|
$
|
12.40
|
|
$
|
12.00
|
|
$
|
11.39
|
|
$
|
14.14
|
|
$
|
11.39
|
Tangible book value
per common
share
|
|
$
|
14.14
|
|
$
|
12.85
|
|
$
|
12.40
|
|
$
|
12.00
|
|
$
|
11.39
|
|
$
|
14.14
|
|
$
|
11.39
|
Period-end market
value per common
share
|
|
$
|
10.43
|
|
$
|
10.52
|
|
$
|
13.95
|
|
$
|
12.45
|
|
$
|
12.04
|
|
$
|
10.43
|
|
$
|
12.04
|
Period-end common
shares outstanding
|
|
|
6,546,596
|
|
|
5,337,598
|
|
|
5,376,454
|
|
|
4,490,275
|
|
|
4,471,365
|
|
|
6,546,596
|
|
|
4,471,365
|
Average basic common
shares
outstanding
|
|
|
5,739,097
|
|
|
5,333,947
|
|
|
5,062,244
|
|
|
4,488,399
|
|
|
4,412,726
|
|
|
5,536,521
|
|
|
4,384,395
|
Average diluted
common shares
outstanding
|
|
|
5,802,578
|
|
|
5,400,318
|
|
|
5,111,603
|
|
|
4,525,449
|
|
|
4,452,637
|
|
|
5,601,447
|
|
|
4,435,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
|
$
|
581
|
|
$
|
696
|
|
$
|
2,439
|
|
$
|
2,423
|
|
$
|
2,418
|
|
$
|
581
|
|
$
|
2,418
|
Nonperforming loans
to total loans
|
|
|
0.07%
|
|
|
0.10%
|
|
|
0.36%
|
|
|
0.38%
|
|
|
0.40%
|
|
|
0.07%
|
|
|
0.40%
|
Nonperforming assets
to total assets
|
|
|
0.05%
|
|
|
0.07%
|
|
|
0.28%
|
|
|
0.31%
|
|
|
0.34%
|
|
|
0.05%
|
|
|
0.34%
|
Allowance for loan
and lease losses to
total loans
|
|
|
1.18%
|
|
|
0.99%
|
|
|
1.06%
|
|
|
1.11%
|
|
|
1.16%
|
|
|
1.18%
|
|
|
1.16%
|
Allowance for loan
and lease losses to
nonperforming loans
|
|
|
1739.59%
|
|
|
1016.24%
|
|
|
292.66%
|
|
|
291.25%
|
|
|
290.69%
|
|
|
1739.59%
|
|
|
290.69%
|
Net charge-offs
(recoveries)
|
|
$
|
91
|
|
$
|
65
|
|
$
|
(81)
|
|
$
|
(28)
|
|
$
|
(5)
|
|
$
|
156
|
|
$
|
(17)
|
Annualized net
charge-offs (recoveries)
to average loans
|
|
|
0.04%
|
|
|
0.04%
|
|
|
(0.05%)
|
|
|
(0.02%)
|
|
|
0.00%
|
|
|
0.04%
|
|
|
(0.01%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
809,217
|
|
$
|
679,720
|
|
$
|
648,160
|
|
$
|
618,586
|
|
$
|
590,088
|
|
$
|
744,468
|
|
$
|
573,808
|
Assets
|
|
$
|
1,088,656
|
|
$
|
895,625
|
|
$
|
832,486
|
|
$
|
741,716
|
|
$
|
712,132
|
|
$
|
992,141
|
|
$
|
691,585
|
Stockholders'
equity
|
|
$
|
85,652
|
|
$
|
81,816
|
|
$
|
71,849
|
|
$
|
52,018
|
|
$
|
48,576
|
|
$
|
83,735
|
|
$
|
47,359
|
|
(1)
Regulatory capital ratios of CFBank
|
GAAP TO NON-GAAP RECONCILIATION
This press release contains certain non-GAAP disclosures for:
(1) PPNR and (2) PPNR return on average assets. 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 and (2) return on
average assets.
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")
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and PPNR Return on
Average Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
|
$
|
10,068
|
|
$
|
2,006
|
|
$
|
2,280
|
|
$
|
12,074
|
|
$
|
3,961
|
Add: Provision for
credit losses
|
|
3,125
|
|
|
-
|
|
|
-
|
|
|
3,125
|
|
|
-
|
Add: Income tax
expense
|
|
2,633
|
|
|
517
|
|
|
583
|
|
|
3,150
|
|
|
1,002
|
Pre-provision,
pre-tax net revenue
|
$
|
15,826
|
|
$
|
2,523
|
|
$
|
2,863
|
|
$
|
18,349
|
|
$
|
4,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Assets
|
$
|
1,088,656
|
|
$
|
895,625
|
|
$
|
712,132
|
|
$
|
992,141
|
|
$
|
691,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
3.70%
|
|
|
0.90%
|
|
|
1.28%
|
|
|
2.43%
|
|
|
1.15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PPNR return on
average assets (2)
|
|
5.81%
|
|
|
1.13%
|
|
|
1.61%
|
|
|
3.70%
|
|
|
1.44%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized net income divided by
average assets
|
(2) Annualized PPNR divided by
average assets
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/cf-bankshares-inc-announces-record-net-income-for-2nd-quarter-with-first-half-2020-net-income-surpassing-full-year-2019-net-income-results-301101106.html
SOURCE CF Bankshares Inc.