CF Bankshares (CFBK) - 2024 Q2 - Quarterly Results

Financial Performance - Net income for Q2 2024 was $1.7 million, or $0.26 per diluted common share, impacted by $3.1 million in additional specific reserves on loan participations[2] - Return on Average Equity (ROE) was 4.23% and Return on Average Assets (ROA) was 0.34% for Q2 2024[2] - Net income attributable to common stockholders decreased by 61% to $1,641,000 for the three months ended June 30, 2024, compared to $4,223,000 in 2023[31] - Net income for Q2 2024 was $1,695,000, down from $3,070,000 in Q1 2024[35] - Basic earnings per common share fell to $0.26 for the three months ended June 30, 2024, down from $0.66 in 2023[31] - Adjusted diluted earnings per share (EPS) of $0.65 for the three months ended June 30, 2024[38] Revenue and Income Sources - Service charge income increased by $244,000 (64%) compared to Q2 2023, and year-to-date income from service charges is up $499,000 (73%) compared to the first half of 2023[3] - Net interest income for Q2 2024 was $11.4 million, a slight increase of $83,000 (0.7%) from the prior quarter[9] - Noninterest income for Q2 2024 totaled $1.2 million, an increase of $313,000 (34.6%) compared to the prior quarter[12] - Total interest income increased by 12% to $29,315,000 for the three months ended June 30, 2024, compared to $26,225,000 in 2023[31] - Noninterest income rose by 25% to $1,218,000 for the three months ended June 30, 2024, from $978,000 in 2023[31] Loan and Credit Quality - New commercial loan production totaled $16.8 million during Q2 2024, with expanding loan and business pipelines in major regional markets[3] - Nonaccrual loans increased to $10.9 million, or 0.64% of total loans, as of June 30, 2024, reflecting an increase from $7.9 million at March 31, 2024[20] - The allowance for credit losses on loans and leases totaled $19.3 million, representing 1.13% of total loans and leases as of June 30, 2024[21] - Provision for credit losses expense increased to $3.6 million for the quarter ended June 30, 2024, compared to $1.2 million for the prior quarter and $12,000 for the same quarter last year[22] - The company reported net charge-offs of $2.1 million for the quarter ended June 30, 2024, compared to net recoveries of $16,000 for the prior quarter[22] - Provision for credit losses on loans surged by 2112% to $4,512,000 for the six months ended June 30, 2024, from $204,000 in 2023[31] - Nonperforming loans increased to $10,909,000, representing 0.64% of total loans, up from 0.46% in Q1 2024[35] Assets and Liabilities - Total assets remained stable at $2,040,634,000 as of June 30, 2024, compared to $2,039,473,000 on March 31, 2024[32] - Total liabilities were reported at $1,837,171 thousand, with total equity of $160,205 thousand, resulting in total assets of $1,997,376 thousand[34] - Total deposits decreased by $26.6 million, or 1.5%, to $1.7 billion at June 30, 2024, compared to the previous quarter, primarily due to a $19.1 million decrease in noninterest-bearing account balances[23] - Total deposits decreased to $1,696,476,000 as of June 30, 2024, from $1,723,070,000 on March 31, 2024[33] - FHLB advances and other debt increased by $26.2 million, or 23.6%, to $137.2 million at June 30, 2024, compared to $111.0 million at March 31, 2024[24] Equity and Dividends - Stockholders' equity rose to $159.6 million at June 30, 2024, an increase of $1.6 million, or 1.0%, from the previous quarter, primarily attributed to net income[25] - The company declared a cash dividend of $0.06 per share on common stock, paid on July 19, 2024[4] - Dividends declared per share remained stable at $0.06 for both Q2 2024 and Q1 2024[35] Operational Efficiency - Efficiency ratio decreased to 56.35% in Q2 2024 from 58.96% in Q1 2024[35] - The company utilizes non-GAAP financial measures to provide a greater understanding of ongoing operations and enhance comparability of results with prior periods[26] Growth and Recognition - CFBank achieved a compound annual growth rate (CAGR) in excess of 20% since its recapitalization in 2012[27] - CFBank was recognized as one of Piper Sandler's "Bank & Thrift Sm-All Stars" for 2023, placing it among the top 10% of small-cap banks in the U.S.[29] Future Outlook - The company remains optimistic about business opportunities for the second half of 2024, supported by strong fundamentals and increased business activities[7]