CFBK CF Bankshares Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 12, 2025

CF BANKSHARES INC.

(Exact name of registrant as specified in its charter)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

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

Item 2.02. Results of Operations and Financial Condition.

On February 12, 2025, CF Bankshares Inc. (the “Company”) issued a press release announcing financial results for the fourth quarter and year ended December 31, 2024 (the “Earnings Release”). A copy of the Earnings Release is included as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits

‎

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Parent of CFBank, NA







CF BANKSHARES INC., PARENT OF CFBANK NA, REPORTS RESULTS FOR THE 4th QUARTER AND FULL YEAR 2024.



Columbus, Ohio – February 12, 2025  – CF Bankshares Inc. (NASDAQ: CFBK) (the “Company”), the parent of CFBank, National Association (“CFBank”), today announced financial results for the fourth quarter and the full year ended December 31, 2024.



Fourth Quarter and Full Year 2024 Highlights



Recent Developments

CEO and Board Chair Commentary

Timothy T. O’Dell, President and CEO, commented: “Fourth Quarter 2024 Net Income was $4.4 million, which is net of a $1 million after-tax impact from additional Credit Loss Reserves. 

The business and operating environment which we and other Banks experienced during 2024, remained volatile and punctuated by periods of elevated interest rates.  

I am particularly pleased that our CF Team remained nimble, adjusting successfully to this period of interest rate volatility which included an inverted interest rate yield curve. 

Our fourth quarter results reflect improving results and stabilized performance achieved through ongoing operating adjustments made to our business and pricing models. We believe these recent results will bode well for continued success in 2025. 

Performance results for the fourth quarter of 2024 included PPNR of $6.5 million, which represented a 12% increase over the prior quarter. Also, during the fourth quarter, NIM expanded by 16bps, while Net Interest Income increased by roughly $1 million during the fourth quarter as compared to the third quarter. 

Additionally, NIB deposits grew by $38 million, or 16%, during the year, as a result of our strategic focus on growing Commercial Treasury Management Deposit business relationships. Full year deposit-related service fee income increased nearly $1 million, up 60%, during 2024 and increased 37% during the fourth quarter of 2024 when compared to the fourth quarter of 2023.

Having opportunistically added more proven Bankers, CFBank has in place stronger and deeper Regional Banking Teams entering the new year.  Our business opportunities and Pipelines continue to be strong, as evidenced by our ability to outrun heavy loan payoff’s driven by CRE Development Construction projects successfully moving onto permanent financing. 

We believe a more stabilized operating and interest rate environment, coupled with our deepened team and continued strong business opportunities, positions CFBank well for 2025!

Our Bests are yet ahead!”

Robert E. Hoeweler, Chairman of the Board, added: “Our team is navigating through some of the most challenging and disruptive financial times in memory. At times it is amazing to witness how our entire team navigates seamlessly through these challenges. Our focus remains providing our customers with comprehensive solutions to their financial needs while building long-term mutually beneficial relationships.”

Overview of Results 

Net income for the three months ended December 31, 2024 totaled $4.4 million (or $0.68 per diluted common share) compared to net income of $4.2 million (or $0.65 per diluted common share) for the three months ended September 30, 2024 and net income of $4.2  million (or $0.65 per diluted common share) for the three months ended December 31, 2023.  Pre-provision, pre-tax net revenue (“PPNR”) for the three months ended December 31, 2024 was $6.5 million compared to PPNR of $5.8 million for the three months ended September 30, 2024 and PPNR of $6.0 million for the three months ended December 31, 2023.

Net income for the year ended December 31, 2024 totaled $13.4 million (or $2.06 per diluted common share) compared to net income of $16.9 million (or $2.63 per diluted common share) for the year ended December 31, 2023. PPNR for the year ended December 31, 2024 was $22.9 million compared to PPNR of $23.3 million for the year ended December 31, 2023.

Net Interest Income and Net Interest Margin

Net interest income totaled $12.5 million for the quarter ended December 31, 2024 and increased $1.0 million, or 9.4%, compared to $11.5 million for the prior quarter, and increased $779,000, or 6.6%, compared to $11.8 million for the fourth quarter of 2023.

The increase in net interest income compared to the prior quarter was primarily due to a $1.1 million, or 5.8%, decrease in interest expense, partially offset by a $4,000 decrease in interest income.  The decrease in interest expense when compared to the prior quarter was attributed to a 30bps decrease in the average cost of funds on interest-bearing liabilities, partially offset by  an  $8.5 million, or 0.5%, increase in average interest-bearing liabilities. The decrease in interest income was primarily

attributed to a 14bps decrease in the average yield on interest-earning assets,  partially offset by  a  $42.4 million, or 2.2%, increase in average interest-earning assets. The net interest margin of 2.57% for the quarter ended December 31, 2024 increased 16bps compared to the net interest margin of 2.41% for the prior quarter.

The increase in net interest income compared to the fourth quarter of 2023 was primarily due to a $499,000, or 2.8%, decrease in interest expense, coupled with a $280,000, or 0.9%, increase in interest income.  The decrease in interest expense was attributed to a 9bps decrease in the average cost of funds on interest-bearing liabilities, coupled with a $13.5 million, or 0.8%, decrease in average interest-bearing liabilities. The increase in interest income was primarily attributed to an $18.0 million, or 0.9%, increase in average interest-earning assets outstanding. The net interest margin of 2.57% for the quarter ended December 31, 2024 increased 13bps compared to the net interest margin of 2.44% for the fourth quarter of 2023.

Noninterest Income

Noninterest income for the quarter ended December 31, 2024 totaled $1.4  million and decreased $160,000, or 10.0%, compared to $1.6 million for the prior quarter.  The decrease was primarily due to a $183,000 decrease in swap fee income.

Noninterest income for the quarter ended December 31, 2024 increased $413,000, or 40.0%, compared to $1.0 million for the quarter ended December 31, 2023.  The increase was primarily due to a $181,000 increase in service charges on deposit accounts, a $123,000 increase in other noninterest income, and a $114,000 increase in net gain on sales of residential mortgage loans.

The following table represents the notional amount of loans sold during the three months ended December 31, 2024, September 30, 2024, and December 31, 2023 (in thousands).







Noninterest Expense

Noninterest expense for the quarter ended December 31, 2024 totaled $7.4 million and increased $207,000, or 2.9%, compared to $7.2 million for the prior quarter.  The increase in noninterest expense was primarily due to a $228,000 increase in loan expense, and a $168,000 in professional fee expense, partially offset by a $132,000 decrease in other noninterest expense and a $78,000 decrease in FDIC premiums. 

Noninterest expense for the quarter ended December 31, 2024 increased $688,000, or 10.2%, compared to $6.7 million for the quarter ended December 31, 2023.  The increase in noninterest expense was primarily due to a $352,000 increase in loan expense, a $226,000 increase in salaries and employee benefits, and a $225,000 increase in professional fee expense, partially offset by a $174,000 decrease in FDIC premiums.    

Income Tax Expense

Income tax expense was $748,000 for the quarter ended December 31, 2024 (effective tax rate of 14.5%), compared to $1.1 million for the prior quarter (effective tax rate of 20.4%) and $932,000 for the quarter ended December 31, 2023 (effective tax rate of 18.0%).  The reduction in the effective tax rate for the quarter ended December 31, 2024 was primarily related to tax-credit investments.

Loans and Loans Held For Sale

Net loans and leases totaled $1.7 billion at December 31, 2024 and increased $4.9 million, or 0.3%, from the prior quarter and increased $27.9 million, or 1.6%, from December 31, 2023.  The increase in loans and leases balances was primarily due to a $30.7 million increase in construction loan balances, a $12.3 million increase in commercial real estate loan balances, and a $4.4 million increase in single-family residential loan balances, partially offset by a $26.1 million decrease in multi-family loan balances and a  $14.1 million decrease in commercial and industrial (C&I) loan balances. 

The increase in net loans and leases from December 31, 2023 was primarily due to a $27.0 million increase in commercial real estate loan balances, a $19.7 million increase in multi-family loan balances, an $11.4 million increase in construction loan balances, and a $3.6 million increase in home equity lines of credit, partially offset by a $21.1 million decrease in commercial and industrial (C&I) loan balances, and a $12.7 million decrease in single-family residential loan balances.    

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





*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 $14.5 million, or 0.84%  of total loans at December 31, 2024, a decrease of $59,000 from $14.6 million at September 30, 2024 and an increase of $8.8 million from  $5.7 million at December 31, 2023. 

The increase in nonaccrual loans when compared to December 31, 2023 was primarily driven by four commercial loans, totaling $11.3 million, and three single-family residential loans, totaling $1.1 million, becoming nonaccrual during the year ended December 31, 2024, partially offset by $3.5 million in charge-offs.  Loans 30 days or more past due totaled $12.1 million at December 31, 2024, compared to $7.7 million at September 30, 2024 and $2.0 million at December 31, 2023.    

The allowance for credit losses on loans and leases totaled $17.5 million at December 31, 2024 compared to  $16.8 million at September 30, 2024 and $16.9 million at December 31, 2023.  The ratio of the allowance for credit losses on loans and leases to total loans and leases was 1.00% at December 31, 2024, compared to 0.97% at September 30, 2024 and 0.99% at December 31, 2023. 

There was $1.4 million in provision for credit losses expense for the quarter ended December 31, 2024, compared to $558,000 for the quarter ended September 30, 2024 and $875,000 for the quarter ended December 31, 2023.  The increase in the provision for credit losses when compared to the prior quarter was primarily driven by additional reserves placed on two individually-evaluated commercial loan participations in the fourth quarter of 2024.    Net charge-offs for the quarter ended December 31, 2024 totaled $95,000, compared to net charge-offs of $3.3 million for the prior quarter and net charge-offs of $623,000 for the quarter ended December 31, 2023.

Deposits

Deposits totaled $1.76 billion at December 31, 2024, an increase of $10.2 million, or 0.6%, compared to $1.75 billion at September 30, 2024, and  an increase of $11.7 million, or 0.7%, when compared to $1.74 billion at December 31, 2023.  The increase when compared to September 30, 2024 was primarily due to a $15.9 million increase in noninterest-bearing account balances, partially offset by a $5.7 million decrease in interest-bearing accounts balances.  The increase when compared to December 31, 2023, was primarily due to a  $37.8 million increase in noninterest-bearing account balances,  partially offset by a $26.0 million decrease in interest-bearing account balances.  The decrease in interest-bearing account balances when compared to December 31, 2023 included a $19.5 million reduction in brokered deposits.

At December 31, 2024, approximately 29.8% of our deposit balances exceeded the FDIC insurance limit of $250,000, as compared to approximately 30.2% at September 30, 2024 and approximately 29.2% at December 31, 2023.

Borrowings

FHLB advances and other debt totaled  $92.7 million at December 31, 2024 and decreased $16.0 million, or 14.7%, when compared to  $108.7 million at September 30, 2024 and decreased $17.3 million, or 15.7%, when compared to $110.0 million

at December 31, 2023. The decrease when compared to September 30, 2024 was primarily due to $16.0 million of fixed rate FHLB advances maturing during the fourth quarter of 2024.  The decrease when compared to December 31, 2023 was primarily due to $18.5 million of fixed rate FHLB advances maturing, partially offset by a $1.2 million increase on the Company’s line of credit with a third party financial institution.    

Capital

Stockholders’ equity totaled $168.4 million at December 31, 2024, an increase of $4.4 million, or 2.7%, when compared to $164.0 million at September 30, 2024, and an increase of $13.0 million, or 8.4%, from $155.4 million at December 31, 2023.  The increase in total stockholders’ equity during the three months ended December 31, 2024 was primarily attributed to net income, partially offset by $453,000 in dividend payments. The increase in stockholders’ equity during the year ended December 31, 2024 was primarily attributed to net income, partially offset by $1.6 million in dividend payments.

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”).  Non-GAAP financial measures included in this earnings release include Pre-Provision, Pre-Tax Net Revenue (PPNR).  Management uses this "non-GAAP" financial measure in its analysis of the Company’s performance and believes that this non-GAAP financial measure provides a greater understanding of ongoing operations and enhances 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.  A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure 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 of 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.

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, 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.