CF Bankshares (CFBK) - 2020 Q3 - Quarterly Report

Financial Performance - Net income for Q3 2020 was $10.2 million, a 289.2% increase from $2.6 million in Q3 2019[263] - For the nine months ended September 30, 2020, net income was $22.3 million, a 238.4% increase from $6.6 million in the same period of 2019[278] - Noninterest income surged to $23.4 million in Q3 2020, a 611.2% increase from $3.3 million in Q3 2019, primarily due to a $20.0 million increase in net gain on sale of loans[271] - Noninterest income for the nine months ended September 30, 2020 totaled $46.7 million, a 518.6% increase from $7.5 million in the same period of 2019[283] Asset and Liability Management - Total assets increased by $456.5 million, or 51.8%, to $1.3 billion as of September 30, 2020, compared to $880.5 million at December 31, 2019[222] - Total liabilities were $1,103.8 million, with noninterest-bearing liabilities at $169.4 million[292] - Cash and cash equivalents rose by $46.9 million, or 102.2%, to $92.8 million as of September 30, 2020, attributed to increases in deposits and borrowings[223] - The total cash available from liquid assets and borrowing capacity increased to $287.9 million at September 30, 2020, from $204.8 million at December 31, 2019[308] Loan and Lease Activity - Net loans and leases rose by $208.4 million, or 31.4%, totaling $871.7 million as of September 30, 2020, driven by a $160.6 million increase in commercial loan balances[227] - CFBank originated approximately $126 million in Paycheck Protection Program (PPP) loans during the second quarter, benefiting over 550 borrowers[216] - Loans held for sale increased by $173.0 million, or 127.5%, totaling $308.7 million as of September 30, 2020[225] - The allowance for loan and lease losses (ALLL) increased by $8.4 million, or 117.0%, to $15.5 million as of September 30, 2020, with a ratio of ALLL to total loans at 1.75%[229] Credit Quality - Nonperforming loans decreased to $527,000 at September 30, 2020, down $1.9 million from $2.4 million at December 31, 2019, resulting in a nonperforming loans to total loans ratio of 0.06%[236] - Total past due loans decreased by $4.3 million to $952,000 at September 30, 2020, representing 0.1% of the loan portfolio compared to 0.8% at December 31, 2019[246] - The level of total criticized and classified loans increased by $7.0 million, or 64.4%, during the nine months ended September 30, 2020, primarily due to loan downgrades[242] - Individually evaluated impaired loans totaled $2.9 million at September 30, 2020, a decrease of $1.7 million, or 36.7%, from $4.6 million at December 31, 2019[232] Income and Expenses - Net interest income for Q3 2020 totaled $7.1 million, up 34.0% from $5.3 million in Q3 2019, driven by a 20.0% increase in interest income[266] - Noninterest expense for Q3 2020 was $11.9 million, a 123.7% increase from $5.3 million in Q3 2019, driven by higher salaries and employee benefits[272] - Income tax expense was $5.8 million for the nine months ended September 30, 2020, an increase of $4.1 million compared to $1.7 million for the same period in 2019[287] - The effective tax rate for the quarter ended September 30, 2020 was approximately 20.7%, compared to approximately 20.3% for the same quarter in 2019[287] Regulatory and Compliance - The principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective as of September 30, 2020[326] - No changes were made in internal controls over financial reporting in the third quarter of 2020 that materially affected the internal control[327] - The Holding Company is subject to various legal and regulatory policies impacting its ability to pay dividends[321] - The Holding Company declared a quarterly cash dividend of $0.03 per share, payable on November 16, 2020[314]