Core Insights - CF Bankshares Inc. (CFBK) operates in a competitive banking landscape with peers such as Citizens Community Bancorp, Colony Bankcorp, Community West Bancshares, Citizens Holding Company, and C&F Financial Corporation [1] - CFBK's Return on Invested Capital (ROIC) is -1.19%, significantly below its Weighted Average Cost of Capital (WACC) of 24.98%, indicating inefficiencies in capital utilization [2][5] - The ROIC to WACC ratio for CFBK is -0.048, further emphasizing the company's struggle to generate returns relative to its capital costs [2] - Citizens Community Bancorp (CZWI) has a ROIC of 0.80% and a WACC of 18.82%, resulting in a ROIC to WACC ratio of 0.042, indicating low efficiency in capital utilization [3] - Colony Bankcorp (CBAN) shows a negative ROIC of -0.63% and a WACC of 12.69%, with a ROIC to WACC ratio of -0.050, reflecting similar inefficiencies as CFBK [3] - Community West Bancshares (CWBC) has a ROIC of 4.54% and a WACC of 11.57%, achieving a ROIC to WACC ratio of 0.392, indicating better capital efficiency [4] - C&F Financial Corporation (CFFI) stands out with a ROIC of 6.28% and a WACC of 13.55%, resulting in the highest ROIC to WACC ratio of 0.463 among peers, demonstrating superior capital efficiency [4][5]

Group 1 - Rush Street Interactive (RSI) has seen a 12.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Udemy (UDMY) has experienced a 9.3% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Envista (NVST) has reported an 8.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] Group 2 - Dorman Products (DORM) has seen a 7.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3] - CF Bankshares (CFBK) has experienced a 6.4% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3]

[PART I. Financial Information](index=2&type=section&id=PART%20I.%20Financial%20Information) [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements for CF Bankshares Inc. and its subsidiary CFBank, National Association, for periods ended June 30, 2025, and December 31, 2024 [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) Details assets, liabilities, and stockholders' equity for CF Bankshares Inc. and its subsidiary as of June 30, 2025, and December 31, 2024 Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :---------------------------------------------------------------- | :-------------------------- | :------------------ | | **ASSETS** | | | | Cash and cash equivalents | $275,684 | $235,272 | | Loans and leases, net | $1,754,808 | $1,722,019 | | Total assets | $2,133,537 | $2,065,523 | | **LIABILITIES** | | | | Total deposits | $1,809,848 | $1,755,795 | | FHLB advances and other debt | $100,947 | $92,680 | | Total liabilities | $1,956,514 | $1,897,086 | | **STOCKHOLDERS' EQUITY** | | | | Total stockholders' equity | $177,023 | $168,437 | - Total assets increased by **$68.0 million (3.3%)** from December 31, 2024, to June 30, 2025, primarily driven by increases in cash and cash equivalents and net loans and leases[6](index=6&type=chunk) - Total stockholders' equity increased by **$8.6 million (5.1%)** from December 31, 2024, to June 30, 2025[6](index=6&type=chunk) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) The Consolidated Statements of Income detail the Company's revenues, expenses, and net income for the three and six months ended June 30, 2025, and 2024 Income Statement Highlights (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net interest income | $14,001 | $11,367 | $26,910 | $22,651 | | Provision for credit losses | $1,427 | $3,561 | $2,009 | $4,798 | | Noninterest income | $1,580 | $1,218 | $2,786 | $2,123 | | Noninterest expense | $7,754 | $7,092 | $15,708 | $14,279 | | Net income | $5,035 | $1,695 | $9,465 | $4,765 | | Net income attributable to common stockholders | $4,880 | $1,641 | $9,173 | $4,644 | | Basic EPS | $0.77 | $0.26 | $1.46 | $0.74 | | Diluted EPS | $0.77 | $0.26 | $1.45 | $0.74 | - Net income for the three months ended June 30, 2025, **increased significantly** to **$5.0 million ($0.77 diluted EPS)** from **$1.7 million ($0.26 diluted EPS)** in the prior year, driven by higher net interest income and lower provision for credit losses[8](index=8&type=chunk) - For the six months ended June 30, 2025, net income **more than doubled** to **$9.5 million ($1.45 diluted EPS)** from **$4.8 million ($0.74 diluted EPS)** in the same period last year[8](index=8&type=chunk) [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The Consolidated Statements of Comprehensive Income present net income and other comprehensive income (loss) components, primarily unrealized gains/losses on available-for-sale securities, for the three and six months ended June 30, 2025, and 2024 Comprehensive Income Highlights (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------------------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $5,035 | $1,695 | $9,465 | $4,765 | | Unrealized holding gains arising during the period related to securities available for sale, net of tax | $158 | $44 | $236 | $53 | | Comprehensive income | $5,193 | $1,739 | $9,701 | $4,818 | - Comprehensive income for the three months ended June 30, 2025, was **$5.2 million**, up from **$1.7 million** in the prior year, reflecting increased net income and unrealized gains on available-for-sale securities[10](index=10&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines the changes in each component of stockholders' equity for the three and six months ended June 30, 2025, and 2024, including net income, other comprehensive income, stock-based compensation, treasury stock transactions, and dividends Stockholders' Equity Changes (in thousands) | Metric (in thousands) | Balance at January 1, 2025 | Balance at June 30, 2025 | | :-------------------------------- | :------------------------- | :----------------------- | | Voting Common Stock | $55 | $60 | | Non-Voting Common Stock | $13 | $9 | | Additional Paid-In Capital | $92,225 | $92,928 | | Retained Earnings | $88,290 | $96,846 | | Accumulated Other Comprehensive Loss | ($1,803) | ($1,567) | | Treasury Stock | ($10,343) | ($11,253) | | Total Stockholders' Equity | $168,437 | $177,023 | - Total stockholders' equity increased by **$8.6 million** to **$177.0 million** at June 30, 2025, from **$168.4 million** at January 1, 2025, primarily due to net income and restricted stock expense, partially offset by cash dividends and treasury stock purchases[13](index=13&type=chunk) - The Company declared cash dividends of **$0.14 per common share** and **$14.00 per Series D preferred stock** for the six months ended June 30, 2025[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows provide a breakdown of cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Cash Flow Highlights (in thousands) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash from operating activities | $10,162 | $2,820 | | Net cash (used by) from investing activities | ($28,370) | $933 | | Net cash from (used by) financing activities | $58,620 | ($23,573) | | Net change in cash and cash equivalents | $40,412 | ($19,820) | | Ending cash and cash equivalents | $275,684 | $241,775 | - Net cash from operating activities **significantly increased** to **$10.2 million** for the six months ended June 30, 2025, from **$2.8 million** in the prior year[17](index=17&type=chunk) - Net cash from financing activities showed a **substantial inflow of $58.6 million** in 2025, a **reversal from a $23.6 million outflow** in 2024, primarily due to a net change in deposits and FHLB advances[17](index=17&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed information and explanations regarding the accounting policies, financial instruments, and other significant items presented in the consolidated financial statements [NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%201%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the basis of presentation for the financial statements, key accounting policies for loans, allowances for credit losses, foreclosed assets, tax credits, and recent accounting pronouncements - The Company adopted ASU No. 2023-07, "Segment Reporting," effective January 1, 2024, and determined all business activities meet aggregation criteria, operating as a single segment[37](index=37&type=chunk)[38](index=38&type=chunk)[41](index=41&type=chunk) - The Company did not record an allowance for credit losses on available-for-sale securities as unrealized losses were due to interest rate changes, not credit quality[26](index=26&type=chunk) - Foreclosed assets at June 30, 2025, consisted of one single-family residential property valued at **$524 thousand**, with no foreclosed assets at December 31, 2024[29](index=29&type=chunk) [NOTE 2 – REVENUE RECOGNITION](index=16&type=section&id=NOTE%202%20%E2%80%93%20REVENUE%20RECOGNITION) This note describes the Company's revenue recognition policies, primarily focusing on noninterest income from contracts with customers, such as service charges on deposit accounts - The majority of the Company's revenue is from financial instruments (loans, securities, derivatives) rather than contracts with customers[48](index=48&type=chunk) - Revenue from contracts with customers, recognized within Noninterest income, includes service charges on deposit accounts, recognized when performance obligations are completed (e.g., monthly maintenance or transaction completion)[49](index=49&type=chunk) [NOTE 3 – SECURITIES](index=17&type=section&id=NOTE%203%20%E2%80%93%20SECURITIES) This note provides details on the Company's available-for-sale securities portfolio, including amortized cost, fair value, and unrealized gains and losses Securities Portfolio Summary (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Amortized Cost | $10,980 | $10,965 | | Total Fair Value | $8,996 | $8,683 | | Gross Unrealized Losses | $1,984 | $2,283 | - At June 30, 2025, **88.9%** of available-for-sale securities were reported at less than historical cost, with unrealized losses primarily due to changes in market interest rates, not credit quality[56](index=56&type=chunk)[57](index=57&type=chunk) - Fair value of securities pledged as collateral for public deposits was **$746 thousand** at June 30, 2025[53](index=53&type=chunk) [NOTE 4 – LOANS AND LEASES](index=18&type=section&id=NOTE%204%20%E2%80%93%20LOANS%20AND%20LEASES) This note details the composition of the loan and lease portfolio, the methodology for the allowance for credit losses, and information on credit quality indicators such as nonaccrual loans, past due loans, and risk classifications Loan and Lease Portfolio Composition (in thousands) | Loan Type (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Commercial | $421,809 | $418,804 | | Single-family residential | $437,659 | $465,517 | | Multi-family residential | $156,634 | $150,434 | | Commercial Real Estate | $506,621 | $460,064 | | Construction | $204,835 | $202,166 | | Home equity lines of credit | $42,805 | $39,520 | | Other Consumer | $3,567 | $2,988 | | Subtotal | $1,773,930 | $1,739,493 | | Less: ACL – Loans | ($19,122) | ($17,474) | | Loans and leases, net | $1,754,808 | $1,722,019 | - The Allowance for Credit Losses on Loans (ACL – Loans) increased by **$1.6 million (9.4%)** to **$19.1 million** at June 30, 2025, from **$17.5 million** at December 31, 2024[69](index=69&type=chunk)[71](index=71&type=chunk) - Nonaccrual loans increased to **$16.6 million** at June 30, 2025, from **$14.5 million** at December 31, 2024, primarily due to a commercial loan and a commercial real estate loan becoming nonaccrual[75](index=75&type=chunk)[78](index=78&type=chunk) [NOTE 5 – LEASES](index=29&type=section&id=NOTE%205%20%E2%80%93%20LEASES) This note describes the Company's operating lease arrangements, including right-of-use assets, lease liabilities, and associated costs - All of the Company's leases are classified as operating leases, with a weighted-average remaining lease term of **8.4 years** and a weighted-average discount rate of **7.51%** at June 30, 2025[100](index=100&type=chunk)[101](index=101&type=chunk) Operating Lease Costs (in thousands) | Operating Lease Costs (in thousands) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Operating lease costs | $165 | $327 | | Variable lease costs | $198 | $397 | [NOTE 6 – FAIR VALUE](index=30&type=section&id=NOTE%206%20%E2%80%93%20FAIR%20VALUE) This note provides information on fair value measurements, categorizing financial instruments into Level 1, 2, or 3 based on the observability of inputs used in valuation techniques, and details assets and liabilities measured at fair value on both recurring and non-recurring bases Fair Value Measurements (in thousands) | Financial Assets (in thousands) | June 30, 2025 (Level 2) | December 31, 2024 (Level 2) | | :------------------------------ | :---------------------- | :-------------------------- | | Securities available for sale | $8,996 | $8,683 | | Loans held for sale | $1,613 | $2,623 | | Derivative assets | $3,585 | $3,730 | | Financial Liabilities (in thousands) | | | | Derivative liabilities | $3,585 | $3,730 | - The Company had no assets or liabilities measured at fair value using Level 1 or Level 3 inputs on a recurring basis at June 30, 2025, or December 31, 2024[110](index=110&type=chunk) - Collateral dependent impaired commercial loans were measured at fair value on a non-recurring basis using Level 3 inputs, totaling **$1.1 million** at June 30, 2025[111](index=111&type=chunk)[114](index=114&type=chunk) [NOTE 7 – SUBORDINATED DEBENTURES](index=34&type=section&id=NOTE%207%20%E2%80%93%20SUBORDINATED%20DEBENTURES) This note details the Company's subordinated debentures, including the 2003 trust preferred securities and the 2018 fixed-to-floating rate subordinated notes, outlining their terms, interest rates, and balances - The 2003 subordinated debentures, with a balance of **$5.2 million**, reset quarterly to SOFR plus **3.112% (7.41%** at June 30, 2025) and mature on December 30, 2033[121](index=121&type=chunk) - The 2018 fixed-to-floating rate subordinated notes, with a balance of **$9.9 million** (net of unamortized debt issuance costs), reset quarterly to SOFR plus **4.402% (8.70%** at June 30, 2025) and mature on December 30, 2028[123](index=123&type=chunk) [NOTE 8 – FHLB ADVANCES AND OTHER DEBT](index=34&type=section&id=NOTE%208%20%E2%80%93%20FHLB%20ADVANCES%20AND%20OTHER%20DEBT) This note provides information on FHLB advances and other debt, including maturities, interest rates, and collateral pledged FHLB Advances and Other Debt (in thousands) | Debt Type (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | FHLB fixed rate advances | $58,000 | $58,000 | | Holding Company credit facility | $42,947 | $34,680 | | Total | $100,947 | $92,680 | - FHLB advances and other debt increased by **$8.3 million (8.9%)** to **$100.9 million** at June 30, 2025, primarily due to a **$10 million** increase in the Holding Company's credit facility[124](index=124&type=chunk)[131](index=131&type=chunk) - CFBank had **$65.0 million** in unused lines of credit at two commercial banks at June 30, 2025[130](index=130&type=chunk) [NOTE 9 – STOCK-BASED COMPENSATION](index=36&type=section&id=NOTE%209%20%E2%80%93%20STOCK-BASED%20COMPENSATION) This note details the Company's stock-based compensation plan, including restricted stock awards and associated compensation costs Stock-Based Compensation Costs (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :-------------------- | :--------------------------- | :--------------------------- | | Total compensation cost | $401 | $704 | | Total income tax effect | $84 | $148 | - The 2019 Equity Incentive Plan was amended to increase authorized shares from **300,000** to **500,000**, with **119,237 shares** remaining available at June 30, 2025[134](index=134&type=chunk) - Unrecognized compensation cost related to nonvested restricted stock awards was **$2.8 million** at June 30, 2025[138](index=138&type=chunk) [NOTE 10 – REGULATORY CAPITAL MATTERS](index=36&type=section&id=NOTE%2010%20%E2%80%93%20REGULATORY%20CAPITAL%20MATTERS) This note outlines CFBank's regulatory capital requirements under Basel III Capital Rules, including minimum ratios for Common Equity Tier 1, Tier 1, Total Capital, and Leverage Ratio, and discusses dividend restrictions Regulatory Capital Ratios | Capital Ratio | Actual Ratio (June 30, 2025) | Minimum Required (Basel III) | Well Capitalized Standard | | :------------------------------------ | :--------------------------- | :--------------------------- | :------------------------ | | Total Capital to risk weighted assets | 14.69% | 10.50% | 10.00% | | Tier 1 Capital to risk weighted assets | 13.45% | 8.50% | 8.00% | | Common equity tier 1 capital to risk-weighted assets | 13.45% | 7.00% | 6.50% | | Tier 1 Capital to adjusted total assets (Leverage Ratio) | 11.20% | 4.00% | 5.00% | - CFBank **exceeded all minimum** and well-capitalized regulatory capital ratios at June 30, 2025[148](index=148&type=chunk) - The Holding Company's ability to pay dividends is dependent on its liquidity, receipt of dividends from CFBank, and compliance with various legal and regulatory policies, including timely interest payments on subordinated debentures[151](index=151&type=chunk) [NOTE 11 – DERIVATIVE INSTRUMENTS](index=40&type=section&id=NOTE%2011%20%E2%80%93%20DERIVATIVE%20INSTRUMENTS) This note describes the Company's use of interest-rate swaps for asset/liability management and mortgage banking derivatives, including rate lock commitments and forward loan sales commitments - CFBank uses interest-rate swaps to manage interest rate risk, with a combined notional amount of **$98.6 million** at June 30, 2025[154](index=154&type=chunk) Derivative Instrument Details (in thousands) | Derivative Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Notional amount (in thousands) | $98,561 | $92,818 | | Weighted average pay rate | 5.44% | 5.45% | | Weighted average receive rate | 6.41% | 6.93% | | Weighted average maturity (years) | 9.0 | 8.6 | | Fair value of derivative asset (in thousands) | $3,585 | $3,730 | | Fair value of derivative liability (in thousands) | ($3,585) | ($3,730) | - Mortgage banking derivatives, including rate lock commitments, are economically hedged with forward loan sales contracts; the fair value of these commitments was immaterial[159](index=159&type=chunk) [NOTE 12 – INCOME TAXES](index=41&type=section&id=NOTE%2012%20%E2%80%93%20INCOME%20TAXES) This note provides details on the Company's deferred tax assets, net operating loss carryforwards, and effective tax rates, explaining the components that create differences from the federal statutory tax rate Deferred Tax Assets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Deferred tax asset | $4,420 | $4,177 | | Unrecognized tax benefits | $0 | $0 | Effective Tax Rates | Effective Tax Rate | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Statutory tax rate | 21.0% | 21.0% | 21.0% | 21.0% | | Effective tax rate | 21.3% | 12.3% | 21.0% | 16.4% | - The Company had net operating loss carryforwards of **$21.8 million** at June 30, 2025, with **$20.5 million** expected to expire unutilized due to Section 382 ownership change limitations[164](index=164&type=chunk) [NOTE 13 – ACCUMULATED OTHER COMPREHENSIVE LOSS](index=42&type=section&id=NOTE%2013%20%E2%80%93%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) This note summarizes the changes in accumulated other comprehensive loss, primarily driven by unrealized gains and losses on available-for-sale securities Accumulated Other Comprehensive Loss (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Accumulated other comprehensive loss, beginning of period | ($1,725) | ($2,281) | ($1,803) | ($2,290) | | Other comprehensive gain before reclassifications | $158 | $44 | $236 | $53 | | Accumulated other comprehensive loss, end of period | ($1,567) | ($2,237) | ($1,567) | ($2,237) | - The accumulated other comprehensive loss improved from **($1.8 million)** at the beginning of 2025 to **($1.6 million)** at June 30, 2025, due to other comprehensive gains[167](index=167&type=chunk) [NOTE 14 – PREFERRED STOCK](index=44&type=section&id=NOTE%2014%20%E2%80%93%20PREFERRED%20STOCK) This note describes the Series D Preferred Stock, including its issuance, conversion features, and dividend participation rights - **2,000 shares** of Series D Preferred Stock were outstanding at June 30, 2025, and December 31, 2024[168](index=168&type=chunk) - Each share of Series D Preferred Stock is convertible into **100 shares** of Non-Voting Common Stock (upon shareholder approval) or Voting Common Stock (under certain conditions), and participates pro rata in dividends with common shareholders[169](index=169&type=chunk) [NOTE 15 – TAX CREDIT INVESTMENTS](index=44&type=section&id=NOTE%2015%20%E2%80%93%20TAX%20CREDIT%20INVESTMENTS) This note provides information on the Company's investments in Low Income Housing Tax Credits (LIHTC) and Historic Tax Credits (HTC), including investment amounts, unfunded commitments, and amortization expense Tax Credit Investments (in thousands) | Investment Type (in thousands) | Investment (June 30, 2025) | Unfunded Commitment (June 30, 2025) | | :----------------------------- | :------------------------- | :---------------------------------- | | LIHTC | $20,255 | $9,987 | | HTC | $1,743 | $1,573 | | Total | $21,998 | $11,560 | Tax Credit Amortization Expense (in thousands) | Amortization Expense (in thousands) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :---------------------------------- | :--------------------------- | :--------------------------- | | LIHTC | $442 | $884 | | HTC | ($30) | $210 | | Total | $412 | $1,094 | [NOTE 16 – SUBSEQUENT EVENT](index=44&type=section&id=NOTE%2016%20%E2%80%93%20SUBSEQUENT%20EVENT) This note discloses a cash dividend declared by the Board of Directors subsequent to the reporting period - On July 1, 2025, the Board of Directors declared a cash dividend of **$0.08 per common share** and **$8.00 per Series D Preferred Stock**, paid on July 21, 2025[173](index=173&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition, results of operations, liquidity, and capital resources for the three and six months ended June 30, 2025, compared to the same periods in 2024 [FORWARD LOOKING STATEMENTS](index=46&type=section&id=FORWARD%20LOOKING%20STATEMENTS) This subsection provides a cautionary statement regarding forward-looking statements, emphasizing that actual results may differ materially due to various risks and uncertainties - Forward-looking statements are identified by terms like "estimate," "strategy," "may," "believe," "anticipate," "expect," "predict," "will," "intend," "plan," and "targeted"[175](index=175&type=chunk) - The Company cautions that assumptions underlying forward-looking statements almost always vary from actual results, and differences can be material[176](index=176&type=chunk) [Business Overview](index=46&type=section&id=Business%20Overview) This section describes CF Bankshares Inc. as a financial holding company operating CFBank, National Association, focusing on commercial, retail, and mortgage lending services for closely held businesses and entrepreneurs in Ohio and Indiana - CFBank focuses on serving closely held businesses and entrepreneurs with comprehensive Commercial, Retail, and Mortgage Lending services[178](index=178&type=chunk) - The principal market area for deposits and loans includes counties in Ohio (Franklin, Delaware, Cuyahoga, Summit, Hamilton) and Marion County, Indiana[179](index=179&type=chunk) [General](index=47&type=section&id=General%20(MD%26A)) This general overview explains that net income is primarily driven by net interest income, influenced by interest rates, loan demand, nonperforming assets, and deposit flows, and also affected by credit loss provisions, noninterest income, operating expenses, and taxes - Net income is primarily dependent on net interest income, which is the difference between interest income on loans and securities and interest expense on deposits and borrowed funds[181](index=181&type=chunk) - Operating results are significantly affected by economic conditions, market interest rates, real estate values, government policies, and regulatory actions[182](index=182&type=chunk) [Financial Condition](index=47&type=section&id=Financial%20Condition%20(MD%26A)) This section analyzes the Company's financial condition, highlighting changes in key balance sheet items such as assets, cash, securities, loans, allowance for credit losses, deposits, and debt - Total assets increased by **$68.0 million (3.3%)** to **$2.13 billion** at June 30, 2025, from **$2.07 billion** at December 31, 2024[184](index=184&type=chunk) - Cash and cash equivalents increased by **$40.4 million (17.2%)** to **$275.7 million** at June 30, 2025, driven by deposit growth and FHLB advances[185](index=185&type=chunk) - Net loans and leases increased by **$32.8 million (1.9%)** to **$1.75 billion**, primarily due to growth in commercial and multi-family real estate loans, partially offset by a decrease in single-family residential loans due to portfolio sales[187](index=187&type=chunk) - The allowance for credit losses on loans (ACL – Loans) increased by **$1.6 million (9.4%)** to **$19.1 million**, with the ratio of ACL – Loans to total loans rising to **1.08%** from **1.00%**[188](index=188&type=chunk) - Nonperforming loans increased by **$1.6 million** to **$16.6 million**, representing **0.94%** of total loans at June 30, 2025[193](index=193&type=chunk) - Total deposits increased by **$54.1 million (3.1%)** to **$1.81 billion**, with increases in both interest-bearing and noninterest-bearing accounts[204](index=204&type=chunk) - FHLB advances and other debt increased by **$8.3 million (8.9%)** to **$100.9 million**, mainly due to a **$10 million** increase in the Holding Company's credit facility[207](index=207&type=chunk) - Stockholders' equity increased by **$8.6 million (5.1%)** to **$177.0 million**, primarily attributed to net income[212](index=212&type=chunk) [Comparison of the Results of Operations for the Three Months Ended June 30, 2025 and 2024](index=51&type=section&id=Comparison%20of%20the%20Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the Company's financial performance for the three months ended June 30, 2025, against the same period in 2024, detailing changes in net income, net interest income, provision for credit losses, noninterest income, noninterest expense, and income tax expense - Net income for Q2 2025 was **$5.0 million ($0.77 diluted EPS)**, a **significant increase** from **$1.7 million ($0.26 diluted EPS)** in Q2 2024[215](index=215&type=chunk) - Net interest income increased by **$2.6 million (23.2%)** to **$14.0 million**, driven by a decrease in interest expense and an increase in interest income[217](index=217&type=chunk) - Provision for credit losses decreased by **$2.2 million** to **$1.4 million**, with net charge-offs totaling **$51,000** compared to **$2.1 million** in Q2 2024[221](index=221&type=chunk) - Noninterest income increased by **$362,000 (29.7%)** to **$1.6 million**, primarily due to higher swap fee income and gains on residential mortgage loan sales[223](index=223&type=chunk) - Noninterest expense increased by **$662,000 (9.3%)** to **$7.8 million**, mainly due to higher salaries and employee benefits and professional fees[224](index=224&type=chunk) [Comparison of the Results of Operations for the Six Months Ended June 30, 2025 and 2024](index=52&type=section&id=Comparison%20of%20the%20Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the Company's financial performance for the six months ended June 30, 2025, against the same period in 2024, detailing changes in net income, net interest income, provision for credit losses, noninterest income, noninterest expense, and income tax expense - Net income for H1 2025 was **$9.5 million ($1.45 diluted EPS)**, up from **$4.8 million ($0.74 diluted EPS)** in H1 2024[228](index=228&type=chunk) - Net interest income increased by **$4.2 million (18.8%)** to **$26.9 million**, driven by a decrease in interest expense and an increase in interest income[230](index=230&type=chunk)[233](index=233&type=chunk) - Provision for credit losses decreased by **$2.8 million** to **$2.0 million**, with net charge-offs totaling **$74,000** compared to **$2.1 million** in H1 2024[236](index=236&type=chunk) - Noninterest income increased by **$663,000 (31.2%)** to **$2.8 million**, primarily due to higher other noninterest income, service charges, and swap fee income[237](index=237&type=chunk) - Noninterest expense increased by **$1.4 million (10.0%)** to **$15.7 million**, mainly due to higher salaries and employee benefits and professional fees[238](index=238&type=chunk) [Average Balances, Interest Rates and Yields](index=56&type=section&id=Average%20Balances%2C%20Interest%20Rates%20and%20Yields) This section presents tables detailing the average balances, interest earned/paid, and yields/rates for interest-earning assets and interest-bearing liabilities for the three and six months ended June 30, 2025, and 2024 Key Metrics for Average Balances, Interest Rates and Yields (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | | Total interest-earning assets (average balance, in thousands) | $1,977,780 | $1,901,269 | | Total interest-earning assets (average yield) | 6.13% | 6.16% | | Total interest-bearing liabilities (average balance, in thousands) | $1,572,157 | $1,570,778 | | Total interest-bearing liabilities (average rate) | 4.16% | 4.57% | | Net interest margin | 2.83% | 2.39% | Key Metrics for Average Balances, Interest Rates and Yields (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | | Total interest-earning assets (average balance, in thousands) | $1,965,544 | $1,907,066 | | Total interest-earning assets (average yield) | 6.05% | 6.12% | | Total interest-bearing liabilities (average balance, in thousands) | $1,572,445 | $1,574,950 | | Total interest-bearing liabilities (average rate) | 4.15% | 4.54% | | Net interest margin | 2.74% | 2.37% | [Rate/Volume Analysis of Net Interest Income](index=58&type=section&id=Rate%2FVolume%20Analysis%20of%20Net%20Interest%20Income) This analysis breaks down the changes in interest income and interest expense into components attributable to changes in interest rates and changes in volume for major interest-earning assets and interest-bearing liabilities Change in Net Interest Income (in thousands) | Change in Net Interest Income (in thousands) | 3 Months Ended June 30, 2025 vs 2024 | 6 Months Ended June 30, 2025 vs 2024 | | :------------------------------------------- | :----------------------------------- | :----------------------------------- | | Due to Rate | $1,525 | $2,816 | | Due to Volume | $1,109 | $1,443 | | Net Change | $2,634 | $4,259 | - For the three months ended June 30, 2025, the net interest income increase of **$2.6 million** was primarily driven by a **$1.5 million** increase due to rate changes and a **$1.1 million** increase due to volume changes[249](index=249&type=chunk) - For the six months ended June 30, 2025, the net interest income increase of **$4.3 million** was primarily driven by a **$2.8 million** increase due to rate changes and a **$1.4 million** increase due to volume changes[249](index=249&type=chunk) [Critical Accounting Policies](index=58&type=section&id=Critical%20Accounting%20Policies) This section affirms that there have been no significant changes to the Company's critical accounting policies and estimates as disclosed in its latest Annual Report on Form 10-K - The Company's financial accounting policies align with U.S. GAAP and banking industry practices, with critical policies requiring management's subjective judgments and estimates[250](index=250&type=chunk) - No significant changes to critical accounting policies and estimates occurred during the six months ended June 30, 2025[251](index=251&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's liquidity management, sources of funds, borrowing capacity, and capital planning, including dividend payment conditions and regulatory considerations - Total cash available from liquid assets and borrowing capacity increased to **$659.2 million** at June 30, 2025, from **$616.6 million** at December 31, 2024[257](index=257&type=chunk) Liquidity Source (in thousands) | Liquidity Source (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------ | :---------------- | | Cash, unpledged securities and deposits | $281,594 | $237,863 | | Additional borrowing capacity at the FHLB | $173,699 | $186,303 | | Additional borrowing capacity at the FRB | $138,940 | $127,424 | | Unused commercial bank lines of credit | $65,000 | $65,000 | | Total | $659,233 | $616,590 | - The Holding Company's ability to pay dividends is contingent on its liquidity, dividends from CFBank, and compliance with debt payment obligations and regulatory policies[270](index=270&type=chunk)[272](index=272&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there has been no material change in the Company's market risk from the information previously disclosed in its Annual Report on Form 10-K - No material change in the Company's market risk was identified as of June 30, 2025, compared to the Annual Report on Form 10-K for December 31, 2024[274](index=274&type=chunk) [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the second quarter of 2025 - The Company's disclosure controls and procedures were effective as of June 30, 2025[276](index=276&type=chunk) - No material changes in internal control over financial reporting occurred during the second quarter of 2025[277](index=277&type=chunk) [PART II. Other Information](index=65&type=section&id=PART%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the Company is involved in routine legal proceedings but does not anticipate any material adverse effects on its financial condition or results of operations - The Company is not a party to any pending legal proceeding that management believes would have a material adverse effect on its financial condition or results of operations[281](index=281&type=chunk) [Item 1A. Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the Company's Annual Report on Form 10-K for a detailed discussion of risk factors and confirms no material changes to those risks - There were no material changes to the risk factors presented in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[282](index=282&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on the Company's purchases of common stock, including shares surrendered for tax payments and shares repurchased under a publicly announced program Common Stock Purchases | Period | Total common shares purchased | Average price paid per common share | | :-------------------------------- | :---------------------------- | :---------------------------------- | | April 1, 2025 through April 30, 2025 | 1,502 | $20.26 | | May 1, 2025 through May 31, 2025 | 25,787 | $23.92 | | June 1, 2025 through June 30, 2025 | 6,351 | $23.41 | | Total | 33,640 | $23.66 | - The Board of Directors authorized a new stock repurchase program on February 4, 2025, to repurchase up to **325,000 shares** by January 31, 2026[283](index=283&type=chunk) [Item 3. Defaults Upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is marked as not applicable, indicating no defaults upon senior securities [Item 4. Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is marked as not applicable, indicating no mine safety disclosures [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) This section confirms no other material information to report and no Rule 10b5-1 trading arrangements adopted or terminated by directors or officers during the quarter - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[288](index=288&type=chunk) [Item 6. Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including certificates of incorporation, bylaws, and certifications [Signatures](index=68&type=section&id=Signatures)

Core Insights - Cf Bankshares reported strong Q2 2025 results, with earnings per share (GAAP) at $0.77, exceeding the $0.72 consensus estimate, and revenue (GAAP) at $15.6 million, surpassing the $14.73 million projection [1][2] - The bank's performance was driven by higher net interest income, improved efficiency, and growth in core deposits and commercial loans [1][5] Financial Performance - Net income (GAAP) increased to $5.0 million from $1.7 million in Q2 2024, reflecting a significant year-over-year improvement [5] - Pre-provision, pre-tax net revenue (non-GAAP) rose 42% year-over-year to $7.8 million, supported by disciplined cost control and steady revenue gains [6] - The net interest margin improved to 2.83%, marking the fifth consecutive quarter of growth, driven by higher interest income and lower funding costs [7] Operational Highlights - The efficiency ratio improved to 49.8% from 56.4% in Q2 2024, indicating better operational efficiency [5] - The bank's loan portfolio is now predominantly focused on commercial loans, which represent over two-thirds of total loans, reflecting a strategic shift from residential lending [3][4] Asset Quality and Risk Management - The provision for loan losses (GAAP) increased to $1.4 million, primarily due to one specific commercial loan participation, but remains below the prior year's $3.6 million [8] - Nonaccrual loans increased to 0.94% of the total loan book, while charge-offs remained low at an annualized 0.01% of average loans [9] Deposit and Capital Position - Deposits grew by 1.5% quarter-over-quarter and 3.1% year-to-date, with improvements in both interest-bearing and noninterest-bearing deposits [10] - Capital levels are robust, with a tier 1 leverage ratio of 11.20% and a total risk-based capital ratio of 14.69%, well above regulatory requirements [11] Strategic Focus - The company aims to scale its commercial banking platform, enhance efficiency, and attract new business clients while managing risks through prudent credit practices [4][12] - Leadership has not provided specific forward guidance but emphasizes the importance of deepening core deposit relationships and recruiting experienced bankers [12]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section provides an overview of the company's strong Q2 2025 financial performance, recent dividend declarations, and strategic commentary from leadership [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) CF Bankshares Inc. reported strong financial performance for Q2 2025, with significant increases in net income and pre-provision, pre-tax net revenue (PPNR) compared to prior periods. The company also achieved improved efficiency, expanded its net interest margin for the fifth consecutive quarter, and increased book value per share Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Change vs Q2 2024 | Change vs Q1 2025 | | :-------------------------------- | :------ | :------------------ | :------------------ | | Net income ($ millions) | $5.0 | +197% | - | | Diluted EPS ($) | $0.77 | - | - | | Pre-provision, pre-tax net revenue (PPNR) ($ millions) | $7.8 | +42% | +27% | | Return on Average Equity (ROE) (%) | 11.47 | - | - | | Return on Average Assets (ROA) (%) | 0.97 | - | - | | Book value per share ($) | $26.63 | - | - | | Net Interest Margin (NIM) (bps) | - | +44 | +19 | | Cost of funds (bps) | - | -48 | - | | Efficiency Ratio (%) | 49.8 | Improved from 56.4 | Improved from 55.9 | [Recent Developments](index=1&type=section&id=Recent%20Developments) The Company's Board of Directors declared cash dividends for both common and Series D Preferred Stock in July 2025, which were subsequently paid - On July 1, 2025, the Board declared a cash dividend of **$0.08 per share** on common stock and **$8.00 per share** on Series D Preferred Stock, paid on July 21, 2025[3](index=3&type=chunk) [CEO and Board Chair Commentary](index=1&type=section&id=CEO%20and%20Board%20Chair%20Commentary) CEO Timothy T. O'Dell highlighted the successful execution of key strategic objectives in the first half of 2025, including strengthening regional banking teams, generating strong PPNR, and improving efficiency. Chairman Robert E. Hoeweler expressed satisfaction with the leadership team's strategic initiatives and solid core earnings growth - Key strategic objectives include scaling the Commercial Bank, improving loan and customer mix, strengthening regional market leadership, expanding banking teams, improving the deposit franchise by lowering cost of funds, and reducing/refinancing low-rate loans[4](index=4&type=chunk)[6](index=6&type=chunk) - Q2 2025 PPNR was **$7.8 million** with an Efficiency Ratio **below 50%**. Net Earnings of **$5.0 million** included **$1.4 million** of Loan Provision expense, and **$10 million** of Capital was downstreamed to the Bank[4](index=4&type=chunk) [Financial Performance Overview](index=2&type=section&id=Financial%20Performance%20Overview) This section details the company's financial performance, including net interest income, noninterest income, noninterest expense, and income tax expense trends [Overview of Results](index=2&type=section&id=Overview%20of%20Results) The company reported substantial growth in net income and pre-provision, pre-tax net revenue (PPNR) for both the second quarter and the first half of 2025 compared to prior periods Net Income and PPNR Performance | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net income ($ millions) | $5.0 | $4.4 | $1.7 | $9.5 | $4.8 | | Diluted EPS ($) | $0.77 | $0.68 | $0.26 | $1.45 | $0.74 | | PPNR ($ millions) | $7.8 | $6.2 | $5.5 | $14.0 | $10.5 | [Net Interest Income and Net Interest Margin](index=2&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income increased significantly, driven by a rise in interest income and a decrease in interest expense. The net interest margin expanded for the fifth consecutive quarter, reflecting improved asset yields and lower cost of funds Net Interest Income and Margin | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YoY Change (Q2) | QoQ Change (Q2) | | :------------------ | :------ | :------ | :------ | :-------------- | :-------------- | | Net interest income ($ millions) | $14.0 | $12.9 | $11.4 | +23.2% | +8.5% | | Net interest margin (%) | 2.83 | 2.64 | 2.39 | +44bps | +19bps | - The increase in net interest income QoQ was primarily due to a **$1.2 million (4.0%) increase in interest income**, partially offset by a $67,000 increase in interest expense. This was driven by a **16bps increase in average yield** on interest-earning assets and a **1.3% increase in average interest-earning assets**[11](index=11&type=chunk) - The increase in net interest income YoY was primarily due to a **$1.6 million (8.9%) decrease in interest expense**, coupled with a **$1.0 million (3.6%) increase in interest income**. This was attributed to a **41bps decrease in the average cost of funds**[12](index=12&type=chunk) [Noninterest Income](index=2&type=section&id=Noninterest%20Income) Noninterest income experienced significant growth both quarter-over-quarter and year-over-year, primarily driven by increased SWAP fee income, higher gains on residential mortgage loan sales, and a decrease in loss on security sales Noninterest Income Performance | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change | YoY Change | | :---------------------------------------- | :------ | :------ | :------ | :--------- | :--------- | | Noninterest income ($ millions) | $1.6 | $1.2 | $1.2 | +31.0% | +29.7% | | SWAP fee income ($ thousands) | +$196 | - | - | - | - | | Gain on sales of residential mortgage loans ($ thousands) | +$92 | - | - | - | - | | Decrease in loss on sale of security ($ thousands) | +$103 | - | - | - | - | Notional Amount of Loans Sold (in thousands) | Period | Notional Amount | | :----------------- | :-------------- | | June 30, 2025 | $14,023 | | March 31, 2025 | $27,277 | | June 30, 2024 | $10,837 | [Noninterest Expense](index=3&type=section&id=Noninterest%20Expense) Noninterest expense decreased quarter-over-quarter due to lower salaries and employee benefits, but increased year-over-year, primarily driven by higher salary expenses from increased full-time equivalents (FTEs) and professional fees related to recruiting Noninterest Expense Performance | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change | YoY Change | | :-------------------------------- | :------ | :------ | :------ | :--------- | :--------- | | Noninterest expense ($ millions) | $7.8 | $8.0 | $7.1 | -2.5% | +9.3% | | Salaries and employee benefits ($ thousands) | -$229 (QoQ) | - | +$384 (YoY) | - | - | | Professional fee expense ($ thousands) | - | - | +$309 (YoY) | - | - | - The QoQ decrease in salaries and employee benefits was impacted by a decrease in payroll taxes, which are typically higher in Q1[17](index=17&type=chunk) - The YoY increase in salaries and employee benefits was driven by higher salary expense due to increased FTEs and expense accruals related to staff incentives and deferred compensation. Professional fee expense increased due to higher recruiting expenses[18](index=18&type=chunk) [Income Tax Expense](index=3&type=section&id=Income%20Tax%20Expense) Income tax expense and the effective tax rate increased significantly both quarter-over-quarter and year-over-year Income Tax Expense and Effective Tax Rate | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | :------ | | Income tax expense ($ millions) | $1.4 | $1.1 | $0.237 | | Effective tax rate (%) | 21.3 | 20.6 | 12.3 | [Balance Sheet Analysis](index=3&type=section&id=Balance%20Sheet%20Analysis) This section analyzes the company's balance sheet components, including loans, asset quality, deposits, borrowings, and capital structure [Loans and Loans Held For Sale](index=3&type=section&id=Loans%20and%20Loans%20Held%20For%20Sale) Net loans and leases showed modest growth quarter-over-quarter and from year-end 2024, primarily driven by increases in commercial and industrial (C&I) and commercial real estate loans, partially offset by a decrease in single-family residential loans Net Loans and Leases (in thousands) | Period | Net Loans and Leases | | :----------------- | :------------------- | | June 30, 2025 | $1,800,000 | | March 31, 2025 | $1,795,000 | | December 31, 2024 | $1,767,000 | - QoQ increase in loans was primarily due to a **$7.1 million increase in C&I loans** and a **$5.1 million increase in commercial real estate loans**, partially offset by decreases in single-family residential and construction loans[20](index=20&type=chunk) - Increase from December 31, 2024, was mainly due to a **$52.8 million increase in commercial real estate loans**, partially offset by a **$27.9 million decrease in single-family residential loans**, largely from the sale of two loan portfolios[21](index=21&type=chunk) Recorded Investment in Non-Owner-Occupied Loan Types (in thousands) | Loan Type | June 30, 2025 | March 31, 2025 | | :------------------------------ | :------------ | :------------- | | Construction – 1-4 family | $29,131 | $29,430 | | Construction – Multi-family | $157,743 | $155,983 | | Construction – Non-residential | $18,785 | $23,646 | | Hotel/Motel | $11,853 | $11,926 | | Industrial / Warehouse | $75,408 | $74,068 | | Land/Land Development | $32,942 | $33,195 | | Medical/Healthcare/Senior Housing | $2,045 | $2,184 | | Multi-family | $218,523 | $211,937 | | Office | $40,150 | $41,109 | | Retail | $69,815 | $71,948 | | Other | $7,424 | $7,603 | [Asset Quality](index=3&type=section&id=Asset%20Quality) Asset quality metrics showed an increase in nonaccrual loans and loans 30 days or more past due. The allowance for credit losses on loans and leases also increased, with a higher provision for credit losses primarily due to a specific reserve on a loan participation Asset Quality Indicators (in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :------------- | :---------------- | | Nonaccrual loans ($ thousands) | $16,600 | $14,500 | $14,500 | | Nonaccrual loans as % of total loans (%) | 0.94 | - | - | | Loans 30+ days past due ($ thousands) | $15,200 | $11,400 | $12,500 | | Allowance for credit losses on loans and leases ($ thousands) | $19,100 | $17,800 | $17,500 | | ACL as % of total loans and leases (%) | 1.08 | 1.01 | 1.00 | | Provision for credit losses expense (Q2) ($ thousands) | $1,400 | $582 | $3,600 | | Net charge-offs (Q2) ($ thousands) | $51 | $23 | $2,100 | - The increase in provision expense and the allowance for credit losses was driven by a **$1.2 million increase in the specific reserve** on a loan participation, which is not part of the Bank's core loan portfolio[26](index=26&type=chunk) [Deposits](index=5&type=section&id=Deposits) Total deposits increased quarter-over-quarter and from year-end 2024, with growth observed in both interest-bearing and noninterest-bearing accounts. The proportion of deposits exceeding the FDIC insurance limit slightly decreased Total Deposits (in billions) | Period | Total Deposits | | :----------------- | :------------- | | June 30, 2025 | $1.81 | | March 31, 2025 | $1.78 | | December 31, 2024 | $1.76 | - The QoQ increase was primarily due to a **$21.6 million increase in interest-bearing accounts** and a **$4.5 million increase in noninterest-bearing accounts**[27](index=27&type=chunk) Deposits Exceeding FDIC Insurance Limit | Period | % Exceeding FDIC Limit | | :----------------- | :--------------------- | | June 30, 2025 | 29.1 | | March 31, 2025 | 31.1 | | December 31, 2024 | 29.8 | [Borrowings](index=5&type=section&id=Borrowings) FHLB advances and other debt increased quarter-over-quarter, primarily due to an increase in the outstanding balance on the holding company credit facility FHLB Advances and Other Debt (in millions) | Period | Amount | | :----------------- | :----- | | June 30, 2025 | $100.9 | | March 31, 2025 | $92.7 | | December 31, 2024 | $92.7 | - The increase was primarily due to a **$10 million increase** in the outstanding balance on the holding company credit facility[29](index=29&type=chunk) [Capital](index=5&type=section&id=Capital) Stockholders' equity increased quarter-over-quarter and from year-end 2024, primarily driven by net income, partially offset by dividend payments Stockholders' Equity (in millions) | Period | Amount | | :----------------- | :----- | | June 30, 2025 | $177.0 | | March 31, 2025 | $172.7 | | December 31, 2024 | $168.4 | - The increase in stockholders' equity during Q2 2025 was primarily attributed to net income, partially offset by **$456,000 in dividend payments**[30](index=30&type=chunk) - The increase in stockholders' equity during H1 2025 was primarily attributed to net income, partially offset by **$909,000 in dividend payments**[30](index=30&type=chunk) [Company Information & Disclosures](index=6&type=section&id=Company%20Information%20%26%20Disclosures) This section provides important company information, including disclosures on non-GAAP financial measures, company profile, and forward-looking statements [Use of Non-GAAP Financial Measures](index=6&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section clarifies the use of non-GAAP financial measures, specifically Pre-Provision, Pre-Tax Net Revenue (PPNR), which management uses to analyze performance and enhance comparability. A reconciliation to GAAP is provided - The earnings release includes non-GAAP financial measures, such as Pre-Provision, Pre-Tax Net Revenue (PPNR), which management uses for performance analysis and comparability[31](index=31&type=chunk) - These non-GAAP measures are not substitutes for GAAP measures and may not be comparable to those presented by other companies. A reconciliation is provided[31](index=31&type=chunk) [About CF Bankshares Inc. and CFBank](index=6&type=section&id=About%20CF%20Bankshares%20Inc.%20and%20CFBank) CF Bankshares Inc. is the parent company of CFBank, a nationally chartered boutique Commercial bank operating in five major metro markets across Ohio and Indiana. Since its recapitalization in 2012, CFBank has focused on serving closely held businesses and entrepreneurs with comprehensive commercial, retail, and mortgage lending services, emphasizing individualized service and direct access to decision-makers - CF Bankshares Inc. is the parent of CFBank, National Association, a nationally chartered boutique Commercial bank[32](index=32&type=chunk) - CFBank operates primarily in Columbus, Cleveland, Cincinnati, Akron Ohio, and Indianapolis, Indiana, and was repositioned as a full-service Commercial Bank in 2012[32](index=32&type=chunk) - CFBank focuses on closely held businesses and entrepreneurs, offering commercial loans, equipment leases, real estate loans, treasury management, residential mortgage lending, and full-service commercial and retail banking, differentiated by individualized service and direct access to decision-makers[33](index=33&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section provides a standard disclaimer regarding forward-looking statements, indicating that they are based on good faith assumptions but are subject to various risks and uncertainties that may cause actual results to differ materially. The company disclaims any obligation to publicly release revisions to these statements unless required by law - The press release contains forward-looking statements regarding projections of financial items, management plans, and future events, identified by terms like 'estimate,' 'believe,' 'anticipate,' and 'expect'[34](index=34&type=chunk) - Actual results may differ materially due to various risks and uncertainties detailed in SEC filings, including those in the Annual Report on Form 10-K[34](index=34&type=chunk) - Forward-looking statements are not guarantees of performance, and assumptions almost always vary from actual results. The company undertakes no obligation to publicly release revisions unless required by law[35](index=35&type=chunk) [Financial Statements & Tables](index=7&type=section&id=Financial%20Statements%20%26%20Tables) This section presents detailed financial statements and tables, including consolidated income, balance sheet, average balance sheet, financial highlights, and non-GAAP reconciliations [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) This table presents the unaudited consolidated statements of income for the three and six months ended June 30, 2025, and 2024, detailing key revenue, expense, and net income figures Consolidated Statements of Income (in thousands, except share data) | (unaudited) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % change (QoQ) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % change (YoY) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------- | :------------------------------- | :------------------------------- | :------------- | | Total interest income | $30,359 | $29,315 | 4% | $59,559 | $58,401 | 2% | | Total interest expense | $16,358 | $17,948 | -9% | $32,649 | $35,750 | -9% | | Net interest income | $14,001 | $11,367 | 23% | $26,910 | $22,651 | 19% | | Provision for credit losses | $1,427 | $3,561 | -60% | $2,009 | $4,798 | -58% | | Noninterest income | $1,580 | $1,218 | 30% | $2,786 | $2,123 | 31% | | Noninterest expense | $7,754 | $7,092 | 9% | $15,708 | $14,279 | 10% | | Income before income taxes | $6,400 | $1,932 | 231% | $11,979 | $5,697 | 110% | | Income tax expense | $1,365 | $237 | 476% | $2,514 | $932 | 170% | | Net income | $5,035 | $1,695 | 197% | $9,465 | $4,765 | 99% | | Net Income attributable to common stockholders | $4,880 | $1,641 | 197% | $9,173 | $4,644 | 98% | | Diluted earnings per common share | $0.77 | $0.26 | - | $1.45 | $0.74 | - | [Consolidated Statements of Financial Condition](index=8&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) This table provides the unaudited consolidated statements of financial condition, detailing assets, liabilities, and stockholders' equity at various quarter-end dates Consolidated Statements of Financial Condition (in thousands) | ($ in thousands) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sept 30, 2024 | Jun 30, 2024 | | :------------------------------------------ | :----------- | :----------- | :----------- | :------------ | :----------- | | **Assets** | | | | | | | Cash and cash equivalents | $275,684 | $240,986 | $235,272 | $233,520 | $241,775 | | Loans and leases, net | $1,754,808 | $1,750,139 | $1,722,019 | $1,717,075 | $1,687,695 | | Total assets | $2,133,537 | $2,094,681 | $2,065,523 | $2,066,494 | $2,040,634 | | **Liabilities and Stockholders' Equity** | | | | | | | Total deposits | $1,809,848 | $1,783,689 | $1,755,795 | $1,745,576 | $1,696,476 | | FHLB advances and other debt | $100,947 | $92,689 | $92,680 | $108,672 | $137,163 | | Total liabilities | $1,956,514 | $1,921,999 | $1,897,086 | $1,902,491 | $1,881,044 | | Stockholders' equity | $177,023 | $172,682 | $168,437 | $164,003 | $159,590 | | Total liabilities and stockholders' equity | $2,133,537 | $2,094,681 | $2,065,523 | $2,066,494 | $2,040,634 | [Average Balance Sheet and Yield Analysis](index=9&type=section&id=Average%20Balance%20Sheet%20and%20Yield%20Analysis) This table provides an average balance sheet and yield analysis for interest-earning assets and interest-bearing liabilities for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, including average outstanding balances, interest earned/paid, and average yield/rate Average Balance Sheet and Yield Analysis (in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :------------------------------------------ | :-------------- | :------------- | :------------ | | **Interest-earning assets:** | | | | | Total interest-earning assets (Avg. Balance) | $1,977,780 | $1,953,172 | $1,901,269 | | Total interest earned | $30,359 | $29,200 | $29,315 | | Average Yield/Rate | 6.13% | 5.97% | 6.16% | | **Interest-bearing liabilities:** | | | | | Total interest-bearing liabilities (Avg. Balance) | $1,572,157 | $1,572,735 | $1,570,778 | | Total interest paid | $16,358 | $16,291 | $17,948 | | Average Yield/Rate | 4.16% | 4.14% | 4.57% | | Net interest income/interest rate spread | $14,001 / 1.97% | $12,909 / 1.83% | $11,367 / 1.59% | | Net interest margin | 2.83% | 2.64% | 2.39% | [Consolidated Financial Highlights](index=10&type=section&id=Consolidated%20Financial%20Highlights) This comprehensive table summarizes key financial performance, capital, and asset quality ratios for various periods, providing a quick overview of the company's financial health and trends Consolidated Financial Highlights (in thousands except per share data) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sept 30, 2024 | Jun 30, 2024 | | :------------------------------------------ | :----------- | :----------- | :----------- | :------------ | :----------- | | **Earnings and Dividends** | | | | | | | Net income | $5,035 | $4,430 | $4,417 | $4,205 | $1,695 | | Diluted earnings per common share | $0.77 | $0.68 | $0.68 | $0.65 | $0.26 | | Dividends declared per share | $0.07 | $0.07 | $0.07 | $0.06 | $0.06 | | **Performance Ratios (annualized)** | | | | | | | Return on average assets | 0.97% | 0.86% | 0.86% | 0.84% | 0.34% | | Return on average equity | 11.47% | 10.37% | 10.61% | 10.38% | 4.23% | | Net interest margin, fully taxable equivalent | 2.83% | 2.64% | 2.57% | 2.41% | 2.39% | | Efficiency ratio | 49.77% | 55.94% | 53.17% | 55.30% | 56.35% | | **Capital** | | | | | | | Tier 1 capital leverage ratio | 11.20% | 10.55% | 10.33% | 10.36% | 10.11% | | Total risk-based capital ratio | 14.69% | 13.76% | 13.60% | 13.43% | 13.48% | | Book value per common share | $26.63 | $25.86 | $25.51 | $24.83 | $24.17 | | **Asset Quality** | | | | | | | Nonperforming loans | $16,632 | $14,563 | $14,719 | $14,597 | $10,909 | | Nonperforming loans to total loans | 0.94% | 0.82% | 0.87% | 0.84% | 0.64% | | Allowance for credit losses on loans and leases to total loans and leases | 1.08% | 1.01% | 1.00% | 0.97% | 1.13% | | Net charge-offs (recoveries) | $51 | $23 | $95 | $3,291 | $2,108 | [Non-GAAP Financial Measure Reconciliation](index=11&type=section&id=Non-GAAP%20Financial%20Measure%20Reconciliation) This table provides a reconciliation of the non-GAAP financial measure Pre-provision, pre-tax net revenue (PPNR) to net income for the three and six months ended June 30, 2025, March 31, 2025, and June 30, 2024 Pre-provision, Pre-tax Net Revenue (PPNR) Reconciliation (in thousands) | Metric | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | Six months ended Jun 30, 2025 | Six months ended Jun 30, 2024 | | :-------------------------- | :----------- | :----------- | :----------- | :---------------------------- | :---------------------------- | | Net income | $5,035 | $4,430 | $1,695 | $9,465 | $4,765 | | Add: Provision for credit losses | $1,427 | $582 | $3,561 | $2,009 | $4,798 | | Add: Income tax expense | $1,365 | $1,149 | $237 | $2,514 | $932 | | Pre-provision, pre-tax net revenue | $7,827 | $6,161 | $5,493 | $13,988 | $10,495 |

Core Insights - CF Bankshares Inc. reported a net income of $5.0 million for Q2 2025, a 197% increase compared to Q2 2024, and a 13.6% increase from Q1 2025 [6][10][37] - The company achieved a pre-provision, pre-tax net revenue (PPNR) of $7.8 million for Q2 2025, representing a 42% increase year-over-year and a 27% increase quarter-over-quarter [10][41] - The net interest income for Q2 2025 was $14.0 million, an increase of 8.5% from the previous quarter and 23.2% from the same quarter last year [8][10][41] Financial Performance - Net earnings for the six months ended June 30, 2025, totaled $9.5 million, compared to $4.8 million for the same period in 2024 [7] - The efficiency ratio improved to 49.8% in Q2 2025, down from 55.9% in Q1 2025 and 56.4% in Q2 2024 [10][41] - Return on average equity (ROE) was 11.47% for Q2 2025, while return on average assets (ROA) was 0.97% [10][41] Dividends and Capital - The Board of Directors declared a cash dividend of $0.08 per share on common stock and $8.00 per share on Series D Preferred Stock, paid on July 21, 2025 [3] - Stockholders' equity increased to $177.0 million as of June 30, 2025, a 2.5% increase from the previous quarter [29] Loan and Deposit Growth - Net loans and leases totaled $1.8 billion at June 30, 2025, reflecting a 0.3% increase from the prior quarter and a 1.9% increase from December 31, 2024 [18][19] - Total deposits reached $1.81 billion, an increase of 1.5% from the previous quarter and 3.1% from the end of 2024 [26] Asset Quality - Nonaccrual loans were $16.6 million, or 0.94% of total loans, an increase from $14.5 million at the end of Q1 2025 [23][24] - The allowance for credit losses on loans and leases was $19.1 million, representing 1.08% of total loans and leases [24] Noninterest Income and Expenses - Noninterest income for Q2 2025 was $1.6 million, a 31% increase from the prior quarter and a 29.7% increase from Q2 2024 [13][14] - Noninterest expenses totaled $7.8 million, a decrease of 2.5% from the previous quarter but an increase of 9.3% from Q2 2024 [15][16]

PART I. Financial Information [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of CF Bankshares Inc. and its subsidiary, including balance sheets, income statements, comprehensive income, equity changes, cash flows, and detailed explanatory notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets, liabilities, and stockholders' equity increased from December 31, 2024, to March 31, 2025, primarily driven by growth in loans and deposits | Metric | March 31, 2025 (unaudited) (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :-------------------------- | :------------------ | | Total assets | $2,094,681 | $2,065,523 | | Total deposits | $1,783,689 | $1,755,795 | | Total liabilities | $1,921,999 | $1,897,086 | | Total stockholders' equity | $172,682 | $168,437 | | Loans and leases, net | $1,750,139 | $1,722,019 | | Cash and cash equivalents | $240,986 | $235,272 | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income significantly increased for the three months ended March 31, 2025, driven by higher net interest income and lower provision for credit losses, despite increased noninterest expense | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net income | $4,430 | $3,070 | | Net income attributable to common stockholders | $4,294 | $3,013 | | Basic earnings per common share | $0.68 | $0.48 | | Diluted earnings per common share | $0.68 | $0.47 | | Net interest income | $12,909 | $11,284 | | Provision for credit losses | $582 | $1,237 | | Noninterest income | $1,206 | $905 | | Noninterest expense | $7,954 | $7,187 | | Income tax expense | $1,149 | $695 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income increased significantly year-over-year, driven by higher net income and larger unrealized holding gains on available-for-sale securities | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net income | $4,430 | $3,070 | | Unrealized holding gains (net of tax) | $78 | $9 | | Comprehensive income | $4,508 | $3,079 | [Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity increased from January 1, 2025, to March 31, 2025, primarily due to net income and restricted stock expense, partially offset by dividends and treasury share acquisitions | Metric | January 1, 2025 (in thousands) | March 31, 2025 (in thousands) | | :----------------------------------- | :-------------- | :------------- | | Total Stockholders' Equity | $168,437 | $172,682 | **Key Changes (Three months ended March 31, 2025):** * Net income: $4,430 (in thousands) * Other comprehensive income: $78 (in thousands) * Restricted stock expense, net of forfeitures: $303 (in thousands) * Acquisition of treasury shares: $(113) (in thousands) * Cash dividends declared on common stock: $(439) (in thousands) * Cash dividends declared on Series D preferred stock: $(14) (in thousands) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash inflow from operating and financing activities, offset by outflow from investing, led to an overall increase in cash and cash equivalents for the three months ended March 31, 2025 | Cash Flow Activity | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash from (used by) operating activities | $2,206 | $(1,161) | | Net cash used by investing activities | $(22,928) | $(1,782) | | Net cash from (used by) financing activities | $26,436 | $(21,760) | | Net change in cash and cash equivalents | $5,714 | $(24,703) | | Ending cash and cash equivalents | $240,986 | $236,892 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the consolidated financial statements, covering accounting policies, financial instruments, debt, equity, regulatory capital, income taxes, and subsequent events [NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=NOTE%201%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the basis of financial statement presentation, key accounting policies for loans, ACL, foreclosed assets, and tax credit investments, including new accounting standard adoptions - The consolidated financial statements are prepared in accordance with U.S. GAAP and SEC instructions for Form 10-Q, with interim period condensations[18](index=18&type=chunk) - The Company adopted ASU 2023-07 'Segment Reporting' as of January 1, 2024, determining all business activities meet aggregation criteria for a single operating segment[35](index=35&type=chunk) - The Company did not record an allowance for credit losses on available-for-sale securities as unrealized losses were due to interest rate changes, not credit quality, and there was no intent or requirement to sell[24](index=24&type=chunk)[55](index=55&type=chunk) [NOTE 2 – REVENUE RECOGNITION](index=15&type=section&id=NOTE%202%20%E2%80%93%20REVENUE%20RECOGNITION) This note clarifies revenue recognition practices, distinguishing between revenue from financial instruments (majority) and contracts with customers (recognized in noninterest income upon performance completion) - The majority of revenue is generated from financial instruments (loans, letters of credit, derivatives, investment securities, mortgage activities)[46](index=46&type=chunk) - Revenue from contracts with customers, such as service charges on deposit accounts, is recognized within Noninterest income upon completion of performance obligations (e.g., monthly for account maintenance or upon transaction completion)[47](index=47&type=chunk) [NOTE 3 – SECURITIES](index=16&type=section&id=NOTE%203%20%E2%80%93%20SECURITIES) The available-for-sale securities portfolio, primarily corporate debt and U.S. Treasury securities, held significant unrealized losses attributed to market interest rates, not credit quality, thus no impairment was recognized | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :------------- | :---------------- | | Total Securities available for sale (Fair Value) | $8,793 | $8,683 | | Corporate debt (Fair Value) | $7,800 | $7,700 | | U.S. Treasury (Fair Value) | $993 | $983 | | Total Amortized Cost | $10,977 | $10,965 | | Total Gross Unrealized Losses | $2,184 | $2,283 | - At March 31, 2025, **88.7%** of available-for-sale securities were reported at less than historical cost, with unrealized losses primarily in one Corporate debt security, attributed to changes in market conditions (interest rates) and not credit quality[54](index=54&type=chunk)[55](index=55&type=chunk) [NOTE 4 – LOANS AND LEASES](index=17&type=section&id=NOTE%204%20%E2%80%93%20LOANS%20AND%20LEASES) The loan and lease portfolio and ACL increased slightly, with minor changes in nonaccrual and past due loans, as the Company categorizes loans into risk categories for credit quality monitoring | Loan Portfolio Segment | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :------------- | :---------------- | | Commercial | $414,685 | $418,804 | | Real estate: Single-family residential | $441,595 | $465,517 | | Real estate: Multi-family residential | $143,337 | $150,434 | | Real estate: Commercial | $514,833 | $460,064 | | Real estate: Construction | $208,577 | $202,166 | | Consumer: Home equity lines of credit | $41,994 | $39,520 | | Consumer: Other | $2,921 | $2,988 | | Less: ACL – Loans | $(17,803) | $(17,474) | | Loans and leases, net | $1,750,139 | $1,722,019 | | ACL Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Balances, January 1 | $17,474 | $16,865 | | Provision (reversal) for credit losses | $352 | $1,317 | | Recoveries on loans | $71 | $16 | | Loans charged off | $(94) | $0 | | Balances, March 31 | $17,803 | $18,198 | | Nonaccrual Loans | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :------------- | :---------------- | | Total nonaccrual loans | $14,494 | $14,538 | | Nonaccrual Loans with no Allowance for Credit Losses | $1,831 | $1,797 | | Past Due Loans (Total Past Due) | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :------------- | :---------------- | | Total Past Due | $11,422 | $12,473 | | 90 Days or more Past Due | $9,682 | $7,778 | - The Company categorizes loans into risk categories (Special Mention, Substandard, Doubtful) based on borrower's ability to service debt, financial information, payment history, and economic trends[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[84](index=84&type=chunk)[87](index=87&type=chunk) - Consumer and Single-family residential loans are classified as 'performing' or 'nonperforming' based on payment performance[81](index=81&type=chunk) [NOTE 5 – LEASES](index=27&type=section&id=NOTE%205%20%E2%80%93%20LEASES) All leases are operating leases, recognized as ROU assets and liabilities, with a weighted-average remaining lease term of 8.6 years and a discount rate of 7.49% as of March 31, 2025 - All leases are classified as operating leases, with ROU assets and lease liabilities recognized on the balance sheet[94](index=94&type=chunk) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets | $5,925 | $6,087 | | Operating lease liabilities | $6,083 | $6,229 | | Weighted-average remaining lease term | 8.6 years | 8.8 years | | Weighted-average discount rate | 7.49% | 7.47% | | Operating lease costs (3 months ended March 31, 2025) | $162 | $180 | [NOTE 6 - FAIR VALUE](index=28&type=section&id=NOTE%206%20-%20FAIR%20VALUE) This note details fair value measurements, categorizing inputs into Level 1, 2, and 3, with recurring measurements for securities, loans held for sale, and derivatives primarily using Level 2 observable inputs - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs), and Level 3 (significant unobservable inputs)[99](index=99&type=chunk)[100](index=100&type=chunk) | Financial Assets (Fair Value at March 31, 2025) (in thousands) | Level 2 | | :----------------------------------- | :------ | | Securities available for sale | $8,793 | | Loans held for sale | $3,505 | | Derivative assets | $3,352 | | Financial Liabilities (Fair Value at March 31, 2025) (in thousands) | Level 2 | | :----------------------------------- | :------ | | Derivative liabilities | $3,352 | - The Company elected the fair value option for loans held for sale, believing fair value is the best indicator of their resolution[106](index=106&type=chunk) - No such loans were 90 days or more past due[106](index=106&type=chunk) [NOTE 7 – SUBORDINATED DEBENTURES](index=31&type=section&id=NOTE%207%20%E2%80%93%20SUBORDINATED%20DEBENTURES) The Company holds two types of subordinated debentures: 2003 variable-rate and 2018 fixed-to-floating rate notes, both long-term liabilities with specific maturity and redemption terms - The 2003 subordinated debentures (balance **$5,155 thousand**) have a variable interest rate, resetting quarterly to three-month SOFR plus **3.112%** (**7.41%** at March 31, 2025)[111](index=111&type=chunk)[113](index=113&type=chunk) - The 2018 fixed-to-floating rate subordinated notes (balance **$9,854 thousand** net of costs) initially bore **7.00%** interest, converting to three-month SOFR plus **4.402%** (**8.70%** at March 31, 2025) after December 30, 2023[114](index=114&type=chunk)[117](index=117&type=chunk) [NOTE 8 – FHLB ADVANCES AND OTHER DEBT](index=32&type=section&id=NOTE%208%20%E2%80%93%20FHLB%20ADVANCES%20AND%20OTHER%20DEBT) FHLB advances consist of fixed-rate advances, and the Holding Company's $35 million credit facility converted to a 10-year term note with its fixed interest rate reset to 6.00% effective April 30, 2025 | Debt Type | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :------------- | :---------------- | | Total FHLB fixed rate advances | $58,000 | $58,000 | | Holding Company credit facility | $34,689 | $34,680 | | Total FHLB advances and other debt | $92,689 | $92,680 | - The Holding Company's **$35 million** credit facility converted to a 10-year term note in May 2024[119](index=119&type=chunk) - Effective April 30, 2025, its fixed interest rate was reset to **6.00%** until May 21, 2026, then converting to a floating rate equal to PRIME[119](index=119&type=chunk) - CFBank had **$65 million** in unused lines of credit at two commercial banks at March 31, 2025, with no outstanding borrowings[120](index=120&type=chunk) [NOTE 9 – STOCK-BASED COMPENSATION](index=34&type=section&id=NOTE%209%20%E2%80%93%20STOCK-BASED%20COMPENSATION) Stock-based compensation expense increased for the three months ended March 31, 2025, under the 2019 Equity Incentive Plan, with a significant number of restricted stock shares granted | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Total compensation cost | $303 | $233 | | Income tax effect | $64 | $49 | - **79,425** shares of restricted stock were granted under the 2019 Plan during the three months ended March 31, 2025, compared to **7,068** shares in the prior year[126](index=126&type=chunk) - Unrecognized compensation cost related to nonvested restricted stock awards was **$3,078 thousand** at March 31, 2025, up from **$1,303 thousand** at March 31, 2024[127](index=127&type=chunk) [NOTE 10 – REGULATORY CAPITAL MATTERS](index=36&type=section&id=NOTE%2010%20%E2%80%93%20REGULATORY%20CAPITAL%20MATTERS) CFBank maintains capital levels well above Basel III minimums for 'well capitalized' status, with dividend payments subject to regulatory and debt agreement restrictions | Capital Ratio (March 31, 2025) | Actual Ratio | Minimum Required (Basel III) | To Be Well Capitalized | | :----------------------------------- | :----------- | :--------------------------- | :--------------------- | | Total Capital to risk weighted assets | 13.76% | 10.50% | 10.00% | | Tier 1 (Core) Capital to risk weighted assets | 12.59% | 8.50% | 8.00% | | Common equity tier 1 capital to risk-weighted assets | 12.59% | 7.00% | 6.50% | | Tier 1 (Core) Capital to adjusted total assets (Leverage Ratio) | 10.55% | 4.00% | 5.00% | - CFBank's capital ratios at March 31, 2025, significantly exceed the minimums required to be considered 'well capitalized' under applicable regulatory capital standards[136](index=136&type=chunk) - Dividend payments by the Holding Company are dependent on its liquidity, receipt of dividends from CFBank, and compliance with various legal, regulatory, and debt agreement conditions, including current interest payments on subordinated debentures[139](index=139&type=chunk) [NOTE 11 – DERIVATIVE INSTRUMENTS](index=37&type=section&id=NOTE%2011%20%E2%80%93%20DERIVATIVE%20INSTRUMENTS) CFBank uses interest-rate swaps for asset/liability management and mortgage banking derivatives for hedging, with swaps resulting in net zero fair value change and mortgage derivatives not designated in hedge relationships - CFBank uses interest-rate swaps to manage interest rate risk, entering into offsetting swaps with customers and dealer counterparties[141](index=141&type=chunk) - The net change in fair value of these swaps is zero in noninterest income[141](index=141&type=chunk) | Metric (Interest-Rate Swaps) | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :------------- | :---------------- | | Notional amount | $91,835 | $92,818 | | Weighted average pay rate | 5.46% | 5.45% | | Weighted average receive rate | 6.74% | 6.93% | | Weighted average maturity | 8.5 years | 8.6 years | | Fair value of derivative asset | $3,352 | $3,730 | | Fair value of derivative liability | $(3,352) | $(3,730) | - Mortgage banking derivatives, including rate lock commitments, are used to economically hedge interest rate risk and are not designated in hedge relationships[147](index=147&type=chunk) - The fair value of these commitments was immaterial[147](index=147&type=chunk) [NOTE 12 – INCOME TAXES](index=38&type=section&id=NOTE%2012%20%E2%80%93%20INCOME%20TAXES) The Company recorded a deferred tax asset with no valuation allowance, and the effective tax rate increased to 20.6% for the three months ended March 31, 2025, influenced by tax credit investments | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :------------- | :---------------- | | Deferred tax asset | $4,173 | $4,177 | | Effective Tax Rate | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Effective tax rate | 20.6% | 18.5% | - The Company has net operating loss carryforwards of **$21,764 thousand**, with **$20,520 thousand** expected to expire unutilized due to Section 382 ownership change limitations[152](index=152&type=chunk) - The increase in effective tax rate for Q1 2025 was primarily due to a **1.6%** increase from tax credit investments, partially offset by restricted stock and tax-exempt earnings[155](index=155&type=chunk) [NOTE 13- ACCUMULATED OTHER COMPREHENSIVE LOSS](index=40&type=section&id=NOTE%2013-%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) Accumulated other comprehensive loss improved for the three months ended March 31, 2025, primarily due to unrealized holding gains on available-for-sale securities | Metric | March 31, 2025 (in thousands) | March 31, 2024 (in thousands) | | :----------------------------------- | :------------- | :------------- | | Accumulated other comprehensive loss, beginning of period | $(1,803) | $(2,290) | | Other comprehensive gain before reclassifications | $78 | $9 | | Accumulated other comprehensive loss, end of period | $(1,725) | $(2,281) | [NOTE 14- PREFERRED STOCK](index=40&type=section&id=NOTE%2014-%20PREFERRED%20STOCK) The Company has Series D Preferred Stock outstanding, convertible into common stock under certain conditions, and participating pro rata with common shareholders in dividends on an as-converted basis - **2,000** shares of Series D Preferred Stock were outstanding at March 31, 2025, and December 31, 2024[157](index=157&type=chunk) - Series D Preferred Stock is convertible into **100** shares of Non-Voting Common Stock (upon shareholder approval) or Voting Common Stock (upon holder request, subject to ownership limits, or transfer to non-affiliate)[158](index=158&type=chunk) - Holders of Series D Preferred Stock participate pro rata with common shareholders in dividends on an as-converted basis and have no liquidation preferences[158](index=158&type=chunk) [NOTE 15- TAX CREDIT INVESTMENTS](index=40&type=section&id=NOTE%2015-%20TAX%20CREDIT%20INVESTMENTS) The Company invests in LIHTC and HTC for returns and CRA goals, with stable total investments, decreased unfunded commitments, and increased amortization expense and recognized tax credits | Investment Type | Investment (March 31, 2025) (in thousands) | Unfunded Commitment (March 31, 2025) (in thousands) | Investment (December 31, 2024) (in thousands) | Unfunded Commitment (December 31, 2024) (in thousands) | | :----------------------------------- | :-------------------------- | :----------------------------------- | :-------------------------- | :----------------------------------- | | Low Income Housing Tax Credit (LIHTC) | $20,139 | $9,814 | $20,139 | $10,767 | | Historic Tax Credit (HTC) | $1,953 | $1,573 | $1,953 | $1,573 | | Total | $22,092 | $11,387 | $22,092 | $12,340 | | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Total Amortization expense | $682 | $353 | | Total Tax credits recognized | $448 | $355 | [NOTE 16- SUBSEQUENT EVENTS](index=41&type=section&id=NOTE%2016-%20SUBSEQUENT%20EVENTS) Subsequent to the reporting period, the Board declared cash dividends, and the Company secured a new $10 million revolving line of credit and amended its existing $35 million credit facility with revised interest rates - On April 2, 2025, a cash dividend of **$0.07** per common share and **$7.00** per Series D Preferred Stock share was declared, paid on April 22, 2025[163](index=163&type=chunk) - On April 30, 2025, the Company entered into a new **$10 million** revolving line of credit, maturing April 30, 2027, with a fixed rate of **6.00%** until May 21, 2026, then converting to PRIME[164](index=164&type=chunk) - Effective April 30, 2025, the existing **$35 million** credit facility's fixed rate was reset to **6.00%** until May 21, 2026, then converting to PRIME[165](index=165&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition and results, analyzing balance sheet and income statement changes, liquidity, and capital resources, highlighting net income growth, loan and deposit increases, and stable capital [Forward-Looking Statements](index=42&type=section&id=FORWARD%20LOOKING%20STATEMENTS) This cautionary statement emphasizes that forward-looking statements are subject to material risks and uncertainties, and the Company undertakes no obligation to update them - Forward-looking statements are identified by terms like 'estimate,' 'believe,' 'anticipate,' and 'expect,' and are not guarantees of performance[168](index=168&type=chunk) - Assumptions underlying forward-looking statements almost always vary from actual results, and differences can be material[169](index=169&type=chunk) - The Company undertakes no obligation to publicly release revisions to forward-looking statements, except as required by law[169](index=169&type=chunk) [Business Overview](index=42&type=section&id=Business%20Overview) CF Bankshares Inc., through CFBank, National Association, serves closely held businesses and entrepreneurs with commercial, retail, and mortgage lending services, primarily in Ohio and Indiana, making performance dependent on Ohio's economy - CF Bankshares Inc. is a financial holding company, and its wholly-owned subsidiary, CFBank, National Association, converted to a national bank in December 2016[170](index=170&type=chunk) - CFBank focuses on providing commercial loans and equipment leases, commercial and residential real estate loans, treasury management, residential mortgage lending, and full-service commercial and retail banking to closely held businesses and entrepreneurs[171](index=171&type=chunk) - The principal market area for deposits and loans includes Franklin, Delaware, Cuyahoga, Summit, and Hamilton counties in Ohio, and Marion County in Indiana, making the Company's performance largely dependent on Ohio's economic conditions[172](index=172&type=chunk) [General Financial Overview](index=43&type=section&id=General) Net income is primarily driven by net interest income, influenced by interest rates, loan demand, and deposit flows, and also affected by credit loss provisions, loan fees, operating expenses, and taxes, all subject to economic and regulatory conditions - Net income is primarily dependent on net interest income, which is the difference between interest earned on loans/securities and interest paid on deposits/borrowed funds[174](index=174&type=chunk) - Net income is also affected by provisions for credit losses, loan fee income, service charges, gains on loan sales, operating expenses, and taxes[175](index=175&type=chunk) - Results are significantly influenced by general economic and competitive conditions, market interest rates, real estate values, government policies, and regulatory actions, which can materially impact the business[175](index=175&type=chunk) [Financial Condition](index=43&type=section&id=Financial%20Condition) Total assets increased by **1.4% to $2.09 billion** at March 31, 2025, driven by a **1.6%** rise in net loans and leases and deposits, while ACL on loans increased slightly, and nonperforming and past due loans decreased | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (%) | | :----------------------------------- | :------------- | :---------------- | :--------- | | Total assets | $2,094,681 | $2,065,523 | 1.4% | | Cash and cash equivalents | $240,986 | $235,272 | 2.4% | | Loans held for sale | $3,505 | $2,623 | 33.6% | | Net loans and leases | $1,750,139 | $1,722,019 | 1.6% | | Allowance for Credit Losses on Loans | $17,803 | $17,474 | 1.9% | | Nonperforming loans | $14,600 | $15,084 | -3.2% | | Total past due loans | $11,400 | $12,500 | -8.8% | | Total deposits | $1,783,689 | $1,755,795 | 1.6% | | FHLB advances and other debt | $92,689 | $92,680 | 0.0% | | Stockholders' equity | $172,700 | $168,400 | 2.5% | - The increase in net loans and leases was primarily driven by a **$47.7 million** increase in commercial real estate loans and a **$6.4 million** increase in construction loans, partially offset by a **$23.9 million** decrease in single-family residential loans due to portfolio sales[180](index=180&type=chunk) - Nonperforming loans decreased by **$484 thousand**, primarily due to the transfer of a **$524 thousand** single-family residential loan to foreclosed assets[186](index=186&type=chunk) - Interest-only commercial lines of credit constituted **31.9%** of the commercial portfolio, and interest-only home equity lines of credit were **97.8%** of total home equity lines of credit at March 31, 2025[193](index=193&type=chunk) [Results of Operations](index=49&type=section&id=Comparison%20of%20the%20Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031,%202025%20and%202024.) Net income increased significantly by **42.9% to $4.4 million** for the three months ended March 31, 2025, driven by a **14.4%** increase in net interest income and a **53.1%** decrease in provision for credit losses, partially offset by higher noninterest expenses | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | Change ($) (in thousands) | Change (%) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Net income | $4,400 | $3,100 | $1,300 | 42.9% | | Diluted EPS | $0.68 | $0.47 | $0.21 | 44.7% | | Net interest income | $12,900 | $11,300 | $1,600 | 14.4% | | Interest income | $29,200 | $29,100 | $100 | 0.4% | | Interest expense | $16,300 | $17,800 | $(1,500) | -8.5% | | Provision for credit losses | $582 | $1,237 | $(655) | -53.1% | | Noninterest income | $1,200 | $905 | $295 | 32.6% | | Noninterest expense | $8,000 | $7,200 | $800 | 11.1% | | Income tax expense | $1,100 | $695 | $405 | 58.3% | | Effective tax rate | 20.6% | 18.5% | 2.1% | 11.4% | - The decrease in interest expense was primarily due to a **42bps** decrease in the average rate of interest-bearing deposits, partially offset by a **0.8%** increase in average interest-bearing deposits[213](index=213&type=chunk) - Net charge-offs for the quarter ended March 31, 2025, totaled **$23 thousand**, compared to net recoveries of **$16 thousand** for the same period in 2024[214](index=214&type=chunk) - The increase in noninterest expense was mainly driven by a **$675 thousand** increase in salaries and employee benefits, related to higher expense accruals for staff incentives and deferred compensation[217](index=217&type=chunk)[219](index=219&type=chunk) [Average Balances, Interest Rates and Yields](index=52&type=section&id=Average%20Balances,%20Interest%20Rates%20and%20Yields) The net interest margin improved to **2.64%** for Q1 2025, up from **2.36%** in the prior year, primarily due to a decrease in the average cost of funds on interest-bearing liabilities | Metric | Q1 2025 Average Balance (in thousands) | Q1 2025 Average Yield/Rate | Q1 2024 Average Balance (in thousands) | Q1 2024 Average Yield/Rate | | :----------------------------------- | :---------------------- | :------------------------- | :---------------------- | :------------------------- | | Total interest-earning assets | $1,953,172 | 5.97% | $1,912,866 | 6.07% | | Total interest-bearing liabilities | $1,572,735 | 4.14% | $1,579,121 | 4.51% | | Net interest income/interest rate spread | | 1.83% | | 1.56% | | Net interest margin | | 2.64% | | 2.36% | | Change in Net Interest Income (Q1 2025 vs. Q1 2024) (in thousands) | Due to Rate | Due to Volume | Net Change | | :----------------------------------- | :---------- | :------------ | :--------- | | Interest-earning assets | $(482) | $596 | $114 | | Interest-bearing liabilities | $(1,944) | $433 | $(1,511) | | Net change in net interest income | $1,462 | $163 | $1,625 | [Critical Accounting Policies](index=53&type=section&id=Critical%20Accounting%20Policies) No significant changes occurred in the Company's critical accounting policies and estimates during the three months ended March 31, 2025, as disclosed in its 2024 Annual Report on Form 10-K - No significant changes occurred in the Company's critical accounting policies and estimates during the three months ended March 31, 2025[231](index=231&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The Company maintains sufficient liquidity through deposits, loan amortizations, securities, and borrowing capacities, though CFBank's FHLB and FRB borrowing capacity decreased, while dividend payments are subject to regulatory and debt restrictions - Management believes both the Holding Company and CFBank have sufficient liquidity to meet daily operating needs and strategic planning[234](index=234&type=chunk) | Liquid Assets and Borrowing Capacity | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :------------- | :---------------- | | Cash, unpledged securities and deposits | $243,679 | $237,863 | | Additional borrowing capacity at the FHLB | $162,387 | $186,303 | | Additional borrowing capacity at the FRB | $125,302 | $127,424 | | Unused commercial bank lines of credit | $65,000 | $65,000 | | Total | $596,368 | $616,590 | - CFBank's additional borrowing capacity with the FHLB decreased by **$23.9 million** (**12.8%**) due to a decline in pledged collateral, primarily single-family residential loans[238](index=238&type=chunk) - The Holding Company's ability to pay common stock dividends is contingent on its cash and liquidity, receipt of dividends from CFBank, and adherence to regulatory and debt agreement terms, including current interest payments on subordinated debentures[250](index=250&type=chunk)[252](index=252&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Management believes there has been no material change in the Company's market risk as of March 31, 2025, compared to the 2024 Annual Report on Form 10-K - No material change in the Company's market risk from the information contained in the 2024 Annual Report on Form 10-K[254](index=254&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during Q1 2025 - Disclosure controls and procedures were effective as of and for the quarter ended March 31, 2025[256](index=256&type=chunk) - No material changes in internal control over financial reporting occurred in the first quarter of 2025[257](index=257&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in ordinary course legal proceedings, but management does not anticipate any material adverse effect on financial condition or results of operations - The Company is subject to claims and lawsuits arising in the ordinary course of business[260](index=260&type=chunk) - Management does not anticipate any material adverse effect on financial condition or results of operations from the disposition or ultimate resolution of these legal proceedings[261](index=261&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes occurred to the Company's risk factors as presented in its 2024 Annual Report on Form 10-K - No material changes to the risk factors presented in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[262](index=262&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the Company purchased **4,581** common shares at an average price of **$24.58** per share, surrendered for tax payments upon restricted stock vesting | Period | Total number of common shares purchased | Average price paid per common share | | :----------------------------------- | :------------------------------------ | :---------------------------------- | | January 1, 2025 through January 31, 2025 | 1,525 | $23.98 | | February 1, 2025 through February 28, 2025 | 2,765 | $24.99 | | March 1, 2025 through March 31, 2025 | 291 | $23.85 | | Total | 4,581 | $24.58 | - The purchased shares represent common stock surrendered to the Company for the payment of taxes upon the vesting of restricted stock[263](index=263&type=chunk) [Item 3. Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the Company for the reporting period - Not applicable[264](index=264&type=chunk) [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company for the reporting period - Not applicable[265](index=265&type=chunk) [Item 5. Other Information](index=47&type=section&id=Item%205.%20Other%20Information) Timothy T. O'Dell, CEO, President, and Director, adopted a Rule 10b5-1(c) trading plan on March 17, 2025, for the sale of up to **75,000** common shares - Timothy T. O'Dell, CEO, President, and Director, adopted a Rule 10b5-1(c) trading plan on March 17, 2025[268](index=268&type=chunk) - The trading plan provides for the sale of up to **75,000** shares of common stock and will terminate on March 17, 2026, or when all shares are sold[268](index=268&type=chunk)[269](index=269&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including amendments to the Certificate of Incorporation, Bylaws, and various certifications - The report includes exhibits such as the Certificate of Incorporation, its amendments, Bylaws, and various certifications (Rule 13a-14(a) and Section 1350 Certifications)[271](index=271&type=chunk) [Signatures](index=50&type=section&id=Signatures) The report is signed by Timothy T. O'Dell, President and CEO, and Kevin J. Beerman, EVP and CFO, on May 12, 2025 - The report is signed by Timothy T. O'Dell, President and Chief Executive Officer, and Kevin J. Beerman, Executive Vice President and Chief Financial Officer, on May 12, 2025[275](index=275&type=chunk)

[First Quarter 2025 Highlights](index=1&type=section&id=First%20Quarter%202025%20Highlights) The company reported strong Q1 2025 results, featuring significant year-over-year profit growth and continued expansion in net interest margin | Metric | Q1 2025 Value | YoY Change | | :--- | :--- | :--- | | Net Income | $4.4 million | +44% | | Diluted EPS | $0.68 | +45% ($0.47 in Q1 2024) | | Pre-Provision, Pre-Tax Net Revenue (PPNR) | $6.2 million | +24% ($5.0M in Q1 2024) | | Return on Average Equity (ROE) | 10.37% | N/A | | Return on Average Assets (ROA) | 0.86% | N/A | | Book Value Per Share | $25.86 | N/A | - **Net Interest Margin (NIM) increased by 7 bps** compared to the prior quarter and 28 bps compared to Q1 2024, marking the fourth consecutive quarter of NIM expansion[6](index=6&type=chunk) - Noninterest bearing (NIB) deposit balances **grew by $18 million**, a 7% increase during the quarter, reflecting a positive trajectory in growing core deposits[4](index=4&type=chunk)[6](index=6&type=chunk) - The company executed its strategy of contracting its residential loan portfolio by **selling two portfolios totaling $18.1 million**, redeploying proceeds into higher-yielding commercial loans[6](index=6&type=chunk) - Recent developments include the appointment of Matt Tuohey as Market President for Northeast Ohio, a cash dividend declaration of $0.07 per common share, and securing a new **$10 million revolving line of credit** for potential Tier 1 capital injection[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=CEO%20and%20Board%20Chair%20Commentary) Management highlights a solid Q1 performance, strategic success in commercial banking, and effective talent acquisition as key drivers for future growth [Q1 Performance and Outlook](index=1&type=section&id=Q1%20Performance%20Sets%20Base%20to%20Build%20Upon) Management views Q1's strong net income and deposit growth as a solid foundation, anticipating further cost reductions - Q1 Net Income of **$4.4 million**, which included a $600k provision expense, is considered a solid base for 2025 performance[4](index=4&type=chunk) - The company is pleased with the **7% quarterly growth in NIB deposits**[4](index=4&type=chunk) - Management expects future opportunities to lower the Cost of Funds and Deposit costs, with potential **Fed rate reductions providing additional momentum**[5](index=5&type=chunk) [Commercial Banking Strategy](index=2&type=section&id=Leaning%20Into%20Growing%20the%20Commercial%20Bank%20Franchise) The commercial banking group achieved significant loan growth by strategically reallocating capital from residential mortgages - The Commercial Banking division generated **over $50 million in net loan growth** in Q1 2025[7](index=7&type=chunk) - The strategy of shrinking the residential mortgage portfolio to fund growth in commercial lending **yielded the intended results** during the quarter[8](index=8&type=chunk) - The bank has implemented **interest rate floors** into some floating-rate loans to help sustain or support margins[8](index=8&type=chunk) [Talent Acquisition](index=2&type=section&id=Adding%20Top%20Talent%20Sets%20the%20Stage%20for%20Quality%20Growth) Successful recruitment of experienced commercial bankers is expanding the bank's presence and setting the stage for quality growth - CFBank is attracting **experienced Commercial Bankers from Regional Banks**, drawn by its entrepreneurial business approach[9](index=9&type=chunk) - This recruitment success is expanding the Commercial Banking teams and presence in **all 5 regional metro markets** served by the bank[10](index=10&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) This section details the company's income statement performance, including analysis of net interest income, noninterest items, and taxes [Overview of Results](index=2&type=section&id=Overview%20of%20Results) Net income was $4.4 million, or $0.68 per diluted share, a 44% increase compared to $3.1 million in Q1 2024 | Metric ($ in millions) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Income | $4.4 | $4.4 | $3.1 | | Diluted EPS | $0.68 | $0.68 | $0.47 | | PPNR | $6.2 | $6.5 | $5.0 | [Net Interest Income and Net Interest Margin (NIM)](index=2&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income grew 14.4% year-over-year to $12.9 million, driven by lower interest expense and a 28 basis point expansion in NIM | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $12.9M | $12.5M | $11.3M | | Net Interest Margin (NIM) | 2.64% | 2.57% | 2.36% | - The QoQ increase in net interest income was primarily due to a **$1.2 million decrease in interest expense**, driven by a 26 bps drop in the cost of funds on interest-bearing liabilities[13](index=13&type=chunk) - The YoY increase was driven by a **$1.5 million decrease in interest expense**, attributed to a 37 bps decline in the average cost of funds[14](index=14&type=chunk) [Noninterest Income](index=2&type=section&id=Noninterest%20Income) Noninterest income totaled $1.2 million, decreasing 16.6% sequentially but increasing 33.3% year-over-year - Noninterest income decreased by $240,000 (16.6%) compared to Q4 2024, primarily due to a **$103,000 loss on a security sale** and an $18,000 loss on commercial loan sales[15](index=15&type=chunk) - Compared to Q1 2024, noninterest income increased by $301,000 (33.3%), mainly from a **$457,000 increase in other noninterest income**[16](index=16&type=chunk) | Notional Amount of Loans Sold (in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Amount | $27,277 | $15,670 | $9,037 | [Noninterest Expense](index=4&type=section&id=Noninterest%20Expense) Noninterest expense was $8.0 million, rising both sequentially and year-over-year primarily due to higher salaries and benefits - Noninterest expense increased by $521,000 (7.0%) QoQ, mainly due to a **$628,000 increase in salaries and benefits**, which included a $234,000 seasonal increase in payroll taxes[18](index=18&type=chunk) - YoY, noninterest expense rose by $767,000 (10.7%), also driven by a **$675,000 increase in salaries and benefits** related to higher incentive accruals[19](index=19&type=chunk) [Income Tax Expense](index=4&type=section&id=Income%20Tax%20Expense) Income tax expense was $1.1 million, resulting in an effective tax rate of 20.6% for the quarter | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Income Tax Expense | $1.1M | $748k | $695k | | Effective Tax Rate | 20.6% | 14.5% | 18.5% | [Balance Sheet and Asset Quality](index=4&type=section&id=Balance%20Sheet%20and%20Asset%20Quality) The analysis covers the company's balance sheet composition, including loan growth, stable asset quality, deposit trends, and capital adequacy [Loans and Loans Held For Sale](index=4&type=section&id=Loans%20and%20Loans%20Held%20For%20Sale) Net loans and leases grew by $28.1 million to $1.8 billion, driven by commercial real estate and construction lending - Net loans and leases **increased by 1.6%** from December 31, 2024, to $1.8 billion[21](index=21&type=chunk) - Loan growth was led by a **$47.7 million increase in commercial real estate** and a $6.4 million increase in construction loans[21](index=21&type=chunk) - The decrease in single-family residential loans was primarily due to the **sale of two loan portfolios totaling $18.1 million**[21](index=21&type=chunk) [Asset Quality](index=4&type=section&id=Asset%20Quality) Asset quality remained stable with nonaccrual loans steady at $14.5 million and minimal net charge-offs | Asset Quality Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Nonaccrual loans | $14.5M (0.82% of loans) | $14.5M (0.87% of loans) | | Allowance for credit losses (ACL) | $17.8M | $17.5M | | ACL to total loans ratio | 1.01% | 1.00% | - **Provision for credit losses expense was $582,000** for Q1 2025, a decrease from $1.4 million in Q4 2024 and $1.2 million in Q1 2024[26](index=26&type=chunk) - **Net charge-offs for Q1 2025 were only $23,000**[26](index=26&type=chunk) [Deposits](index=5&type=section&id=Deposits) Total deposits increased by $27.9 million, driven by a significant $18.1 million rise in noninterest-bearing balances - Total deposits **grew 1.6% QoQ to $1.78 billion** at March 31, 2025[27](index=27&type=chunk) - The increase was primarily due to an **$18.1 million rise in noninterest-bearing accounts**[27](index=27&type=chunk) - Approximately **31.1% of deposit balances exceeded the FDIC insurance limit**, up from 29.8% at the end of the prior quarter[28](index=28&type=chunk) [Borrowings](index=5&type=section&id=Borrowings) FHLB advances and other debt remained stable at $92.7 million as of March 31, 2025 - FHLB advances and other debt totaled **$92.7 million** at March 31, 2025, consistent with the balance at December 31, 2024[29](index=29&type=chunk) [Capital](index=5&type=section&id=Capital) Stockholders' equity increased by $4.3 million to $172.7 million, and all regulatory capital ratios remained strong - Stockholders' equity **grew by 2.5% during the quarter to $172.7 million**, mainly due to retained earnings[30](index=30&type=chunk) | Regulatory Capital Ratios (CFBank) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Tier 1 leverage ratio | 10.55% | 10.33% | | Common equity tier 1 capital ratio | 12.59% | 12.45% | | Total risk-based capital ratio | 13.76% | 13.60% | [Financial Statements & Data](index=7&type=section&id=Financial%20Statements%20%26%20Data) This section presents the core consolidated financial statements and supplementary data tables for detailed analysis [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) The company's net income increased 44% year-over-year, driven by a 14% rise in net interest income | ($ in thousands) | 3 Months Ended Mar 31, 2025 | 3 Months Ended Mar 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net interest income | $12,909 | $11,284 | 14% | | Provision for credit losses | $582 | $1,237 | -53% | | Noninterest income | $1,206 | $905 | 33% | | Noninterest expense | $7,954 | $7,187 | 11% | | **Net income** | **$4,430** | **$3,070** | **44%** | [Consolidated Statements of Financial Condition](index=8&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets stood at $2.09 billion, supported by $1.78 billion in deposits and $172.7 million in stockholders' equity | ($ in thousands) | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total assets** | **$2,094,681** | **$2,065,523** | | Loans and leases, net | $1,750,139 | $1,722,019 | | **Total deposits** | **$1,783,689** | **$1,755,795** | | **Total liabilities** | **$1,921,999** | **$1,897,086** | | **Stockholders' equity** | **$172,682** | **$168,437** | [Average Balance Sheet and Yield Analysis](index=9&type=section&id=Average%20Balance%20Sheet%20and%20Yield%20Analysis) The net interest margin expanded to 2.64% in Q1 2025, continuing its upward trend from prior quarters | For Three Months Ended | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Avg. Yield on Interest-Earning Assets | 5.97% | 6.16% | 6.07% | | Avg. Rate on Interest-Bearing Liabilities | 4.14% | 4.40% | 4.51% | | Net Interest Rate Spread | 1.83% | 1.76% | 1.56% | | **Net Interest Margin** | **2.64%** | **2.57%** | **2.36%** | [Consolidated Financial Highlights](index=10&type=section&id=Consolidated%20Financial%20Highlights) Key financial metrics show consistent quarterly improvement in net interest margin and steady growth in book value per share - The financial highlights table shows a consistent quarterly improvement in **Net Interest Margin, from 2.36% in Q1 2024 to 2.64% in Q1 2025**[40](index=40&type=chunk) - **Book value per common share has steadily increased** over the past five quarters, reaching $25.86 at March 31, 2025[40](index=40&type=chunk) [Appendix](index=6&type=section&id=Appendix) The appendix includes non-GAAP reconciliations, company information, and forward-looking statement disclaimers [Use of Non-GAAP Financial Measures](index=6&type=section&id=USE%20OF%20NON-GAAP%20FINANCIAL%20MEASURES) The company uses Pre-Provision, Pre-Tax Net Revenue (PPNR) to better show ongoing operational performance GAAP to Non-GAAP Reconciliation (PPNR) | ($ in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net income | $4,430 | $4,417 | $3,070 | | Add: Provision for credit losses | $582 | $1,381 | $1,237 | | Add: Income tax expense | $1,149 | $748 | $695 | | **Pre-provision, pre-tax net revenue** | **$6,161** | **$6,546** | **$5,002** | [About CF Bankshares Inc. and CFBank](index=6&type=section&id=About%20CF%20Bankshares%20Inc.%20and%20CFBank) CF Bankshares Inc. is the holding company for CFBank, a boutique Commercial bank operating in Ohio and Indiana - CFBank is a boutique Commercial bank operating in **Columbus, Cleveland, Cincinnati, Akron (OH), and Indianapolis (IN)**[32](index=32&type=chunk) - The bank focuses on providing commercial, retail, and mortgage lending services to **closely held businesses and entrepreneurs**, differentiating itself with individualized service and direct access to decision-makers[33](index=33&type=chunk) [Forward-Looking Statements](index=6&type=section&id=FORWARD%20LOOKING%20STATEMENTS) This section cautions that the press release contains forward-looking statements subject to various risks and uncertainties - The press release contains forward-looking statements regarding projections, plans, and future economic performance, which are **subject to risks and uncertainties**[34](index=34&type=chunk) - The company **undertakes no obligation to update forward-looking statements**, which speak only as of the date of the release[35](index=35&type=chunk)

Credit Losses and Loan Performance - The Allowance for Credit Losses on Loans (ACL - Loans) totaled $17.5 million at December 31, 2024, reflecting an increase of $609,000, or 3.6%, from $16.9 million at December 31, 2023[65]. - The ratio of ACL - Loans to total loans was 1.00% at December 31, 2024, compared to 0.99% at December 31, 2023[65]. - Nonperforming loans increased by $9.3 million in 2024, primarily due to three commercial loans totaling $11.3 million becoming nonaccrual[59]. - The company recognized no interest income on nonaccrual loans in 2024, with an estimated additional interest income of approximately $1.2 million if these loans had performed as per their contractual terms[60]. - The net charge-offs for the year ended December 31, 2024, were $5.5 million, with a provision for credit losses on loans amounting to $6.1 million[65]. - The ACL - Loans to nonperforming loans ratio was 116.13% at December 31, 2024, down from 294.74% at December 31, 2023[67]. Securities and Investments - The securities available for sale portfolio totaled $8.7 million at December 31, 2024, with all U.S. Treasury securities guaranteed by the U.S. government[74]. - The amortized cost of corporate debt securities was $9.98 million at December 31, 2024, with a fair value of $7.7 million[77]. - The company modified one commercial loan with an amortized cost basis of $4.3 million, representing 1% of commercial loans, due to the borrower's financial difficulty[62]. Deposits and Borrowings - CFBank's total average deposits reached $1.694 billion in 2024, an increase from $1.624 billion in 2023, reflecting a growth of 4.3%[88]. - Money market accounts constituted 40.6% of average deposit balances in 2024, while certificates of deposit accounted for 38.5%[88]. - Brokered deposits totaled $420.8 million at December 31, 2024, a decrease of $19.6 million, or 4.4%, from $440.4 million at December 31, 2023[86]. - CFBank had $58.0 million in FHLB advances at December 31, 2024, with a borrowing capacity of up to $244.6 million based on collateral pledged[89]. - The Holding Company's available cash and cash equivalents totaled $1.0 million at December 31, 2024, indicating adequate liquidity to meet operating needs[82]. - Average interest-bearing deposits amounted to $1.454 billion in 2024, with a weighted average interest rate of 4.62%[88]. - CFBank's certificate accounts exceeding the FDIC insured limit of $250,000 totaled $464.0 million at December 31, 2024[87]. - The Holding Company had an outstanding balance of $34.7 million on a $35.0 million credit facility as of December 31, 2024[90]. - Customer balances in the CDARS and ICS reciprocal programs increased by $33.9 million, or 14.3%, to $271.7 million at December 31, 2024[86]. Employment and Corporate Structure - CFBank employed 102 full-time employees as of December 31, 2024[94]. - The Holding Company became a financial holding company effective December 1, 2016, allowing it to engage in a broader range of financial activities[105]. Capital Requirements and Regulatory Compliance - The Basel III Capital Rules require a minimum common equity tier 1 capital ratio of 4.5%, a minimum Tier 1 capital ratio of 6.0%, and a minimum total capital ratio of 8.0%[116]. - As of December 31, 2024, the Company believes it met the requirements to be deemed "well-capitalized" with a common equity tier I capital ratio of at least 6.5%[127]. - The Economic Growth, Regulatory Relief and Consumer Protection Act eased restrictions for bank holding companies with consolidated assets of less than $100 billion, including the Company[110]. - The FRB's Small Bank Holding Company Policy Statement now allows qualifying bank holding companies with total consolidated assets up to $3 billion to be exempt from certain capital rules[128]. - The Company is subject to regular examinations by the FRB and must file reports as required, ensuring compliance with extensive regulations[102]. - The FRB has the authority to require a financial holding company to contribute additional capital to an undercapitalized subsidiary bank[103]. - The Company is prohibited from engaging in certain tying arrangements in connection with extensions of credit or services[109]. - The federal banking agencies have established a system of prompt corrective action based on five capital level categories for insured depository institutions[126]. - The Holding Company qualifies under the FRB's Small Bank Holding Company Policy Statement for exemption from consolidated risk-based capital and leverage rules[128]. Insurance and Ratings - CFBank's deposits are insured up to $250,000 per separately insured depositor by the FDIC[129]. - The FDIC's designated reserve ratio (DRR) was 1.26% as of September 30, 2022, and increased to 1.21% as of June 30, 2024[130]. - The FDIC plans to restore the DRR to 1.35% by September 30, 2028, following a restoration plan[130]. - CFBank's CRA rating is "Needs to Improve," primarily due to its legacy direct-to-consumer residential mortgage business[143]. - The OCC's evaluation covering 2020 through 2022 led to the "Needs to Improve" rating, with the next evaluation expected in 2026[143]. Taxation and Financial Regulations - Federal income tax laws provided deductions totaling $2.3 million for the Company's thrift bad debt reserves established before 1988[136]. - The reserve requirement ratio for depository institutions remained at 0% as of December 31, 2024, in response to the COVID-19 pandemic[137]. - The Dodd-Frank Act requires federal banking agencies to issue rules related to incentive-based compensation, with no final rule adopted yet[150]. - The FRB, OCC, and FDIC issued guidance in June 2010 to ensure incentive compensation policies do not encourage excessive risk-taking[151]. - CFBank's net operating loss carryforwards at year-end 2023 amount to $21.9 million, expiring between 2024 and 2032, with a limitation of $163,000 per year due to an ownership change[171]. Interest Rate Risk and Economic Value - The economic value of equity (EVE) ratio at December 31, 2024, is projected to be 10.9% under current interest rates, with potential fluctuations ranging from 9.4% to 12.9% based on interest rate changes of +400 bps to -400 bps[378]. - CFBank's clawback policy for incentive compensation payments was adopted effective November 29, 2023, in compliance with SEC regulations[154]. - The company has not detected significant data loss or material financial losses related to cybersecurity attacks, but risks remain high due to evolving threats[166]. - CFBank's hedging policy allows for economic hedging activities, such as interest-rate swaps, up to a notional amount of 10% of total assets[374]. - The company is subject to various state taxation regulations, including the Ohio Financial Institutions Tax and the Indiana Financial Institution Tax[175][176]. - Federal income tax laws provided additional deductions totaling $2.3 million for thrift bad debt reserves established before 1988[172]. - CFBank's management actively monitors interest rate risk to limit adverse impacts on net interest income and capital[375]. - The company is required to disclose material cybersecurity incidents within four business days of determination, as per SEC rules adopted in July 2023[163]. - CFBank's cybersecurity controls include multiple layers of security to protect against threats, although the risk of cyber attacks is increasing[159]. Mortgage Loan Origination - Residential mortgage loan origination volumes are negatively impacted by rising interest rates, leading to lower loan originations[380]. - The company originates various types of mortgage loans, including commercial and residential, many of which have adjustable interest rates[381]. - Adjustable-rate loans may lead to increased delinquencies and defaults in a rising interest rate environment due to higher payment requirements[381]. - Cash flows are influenced by market interest rate changes, with prepayment rates declining in rising interest rate environments[382].

Financial Performance - Net income for Q4 2024 was $4.4 million ($0.68 per diluted common share), and for the full year 2024, it was $13.4 million ($2.06 per diluted common share) [4] - Pre-provision, pre-tax net revenue (PPNR) for Q4 2024 was $6.5 million, a 12% increase from Q3 2024, and total PPNR for the year was $22.9 million [4][12] - Net interest income for Q4 2024 increased by $1.0 million (9.4%) compared to Q3 2024, totaling $12.5 million [13] - Noninterest income for Q4 2024 rose by $413,000 (40%) compared to Q4 2023, driven by a 60% increase in customer fees for the full year 2024 [4][18] - Net interest income for the three months ended December 31, 2024, was $12.5 million, a 7% increase from $11.8 million in the same period of 2023 [43] - Noninterest income for the three months ended December 31, 2024, was $1.4 million, a 40% increase from $1.0 million in the same period of 2023 [43] - Net income attributable to common stockholders was $4.3 million for the three months ended December 31, 2024, a 1% increase from $4.2 million in the same period of 2023 [43] - Net income for Q4 2024 was $4,417,000, compared to $4,205,000 in Q3 2024 [49] Deposits and Assets - Total deposits reached $1.76 billion as of December 31, 2024, reflecting a 0.6% increase from $1.75 billion at September 30, 2024, and a 0.7% increase from $1.74 billion at December 31, 2023 [32] - Noninterest-bearing account balances increased by $15.9 million compared to September 30, 2024, while interest-bearing accounts decreased by $5.7 million [32] - Total assets as of December 31, 2024, amounted to $2,065,523,000, a slight increase from $2,064,306,000 on September 30, 2024 [45] - Total deposits increased to $1,755,795,000 from $1,745,576,000, marking a growth of 0.57% quarter-over-quarter [46] Loans and Credit Quality - Nonaccrual loans were $14.5 million (0.84% of total loans) at December 31, 2024, a decrease from $14.6 million at September 30, 2024 [28] - The allowance for credit losses on loans and leases was $17.5 million at December 31, 2024, representing 1.00% of total loans and leases [30] - Provision for credit losses on loans increased by 228% year-over-year, totaling $6.1 million for the year ended December 31, 2024 [43] - Nonperforming loans increased to $14,719,000 in Q4 2024 from $14,597,000 in Q3 2024 [49] - The allowance for credit losses on loans and leases was $17,474,000, compared to $16,780,000 in the previous quarter, reflecting an increase of 4.14% [45] Equity and Dividends - Stockholders' equity rose to $168.4 million at December 31, 2024, a 2.7% increase from $164.0 million at September 30, 2024, and an 8.4% increase from $155.4 million at December 31, 2023 [37] - The company declared a cash dividend of $0.07 per share on common stock, paid on January 27, 2025 [3] Future Outlook - The company anticipates a more stabilized operating environment and strong business opportunities for 2025 [10] Interest Rates and Margins - The net interest margin (NIM) for Q4 2024 was 2.57%, an increase of 16 basis points from the previous quarter [15] - The average yield on loans and leases was 6.31% for the quarter ended December 31, 2024, compared to 6.39% in the previous quarter [47] - Interest-earning assets totaled $1,945,165,000, generating interest income of $29,992,000, resulting in a yield of 6.16% [47] Debt and Liabilities - FHLB advances and other debt decreased to $92.7 million at December 31, 2024, a 14.7% decrease from $108.7 million at September 30, 2024 [34] - Total liabilities decreased slightly to $1,897,086,000 from $1,900,303,000, a decline of 0.11% [46]