CF Bankshares (US:CFBK)2022-05-09 16:00Financial Position - Total assets increased by $48.6 million, or 3.3%, to $1.5 billion at March 31, 2022, compared to December 31, 2021[162]. - Cash and cash equivalents increased by $1.7 million, or 1.0%, to $168.3 million at March 31, 2022, attributed to net deposit balances and security maturities[162]. - Securities available for sale decreased by $3.3 million, or 20.5%, to $13.0 million at March 31, 2022, due to principal maturities[163]. - Total assets as of March 31, 2022, were $1,456.0 million, a decrease from $1,507.4 million in the same period of 2021[203]. - CFBank's cash, unpledged securities, and deposits in other financial institutions increased by $928,000, or 0.55%, to $169.9 million as of March 31, 2022, compared to $169.0 million at December 31, 2021[217]. Loan and Lease Performance - Net loans and leases rose by $67.2 million, or 5.5%, to $1.3 billion at March 31, 2022, driven by increases in single-family residential, commercial, and construction loan balances[164]. - The allowance for loan and lease losses (ALLL) was $15.5 million at March 31, 2022, with a ratio of ALLL to total loans at 1.20%, down from 1.26% at December 31, 2021[165]. - Individually evaluated impaired loans decreased by $2.0 million, or 65.9%, to $1.0 million at March 31, 2022, primarily due to the payoff of two impaired loans[169]. - Nonperforming loans totaled $1.0 million at March 31, 2022, with a ratio of nonperforming loans to total loans remaining stable at 0.08%[170]. - Total criticized and classified loans decreased by $2.0 million, or 32.7%, during the three months ended March 31, 2022[175]. - Total past due loans decreased by $2.6 million, totaling $946,000 at March 31, 2022, compared to $3.6 million at December 31, 2021[177]. Income and Expenses - Net income for the three months ended March 31, 2022, totaled $4.5 million, a decrease of $1.9 million, or 29.6%, compared to $6.4 million for the same period in 2021[190]. - Net interest income increased by $1.2 million, or 12.0%, totaling $10.8 million for the quarter ended March 31, 2022[192]. - Interest income increased by $295,000, or 2.3%, totaling $13.2 million for the quarter ended March 31, 2022[192]. - Interest expense decreased by $862,000, or 26.6%, totaling $2.4 million for the quarter ended March 31, 2022[193]. - Noninterest income decreased by $6.2 million, or 85.5%, to $1.0 million for the quarter ended March 31, 2022, primarily due to a $5.8 million decrease in net gain on the sale of residential mortgage loans[197]. - Noninterest expense for the quarter ended March 31, 2022, totaled $6.3 million, a decrease of $2.7 million, or 30.0%, compared to $9.0 million for the same quarter in 2021[198]. - Income tax expense was $1.0 million for the quarter ended March 31, 2022, a decrease of $432,000 compared to $1.5 million for the same quarter in 2021, with an effective tax rate of approximately 18.5%[199]. Deposits and Equity - Deposits totaled $1.3 billion at March 31, 2022, an increase of $52.4 million, or 4.2%, compared to $1.2 billion at December 31, 2021[182]. - Stockholders' equity increased by $3.0 million, or 2.4%, totaling $128.3 million at March 31, 2022[186]. - FHLB advances and other debt decreased by $6.5 million, or 7.2%, totaling $83.2 million at March 31, 2022[183]. Strategic Changes - The company strategically repositioned its Residential Mortgage Business, exiting the saleable-to-investors mortgage business in favor of portfolio lending[159]. - The company strategically scaled down its residential mortgage lending business in response to shifts in the mortgage industry, impacting both income and expenses[197][198]. Liquidity and Borrowing Capacity - Additional borrowing capacity at the FHLB increased by $14.9 million, or 13.2%, to $128.0 million at March 31, 2022, from $113.1 million at December 31, 2021[218]. - Additional borrowing capacity at the FRB increased by $17.2 million, or 23.8%, to $89.4 million at March 31, 2022, from $72.2 million at December 31, 2021[218]. - CFBank had $65.0 million of availability in unused lines of credit with two commercial banks as of March 31, 2022, unchanged from December 31, 2021[219]. - The Holding Company had an outstanding balance of $24.3 million on a $35.0 million credit facility as of March 31, 2022, which is revolving until May 21, 2024[225]. - Management believes that the Holding Company had adequate funds and sources of liquidity at March 31, 2022, to meet its current and anticipated operating needs[222]. - CFBank's liquidity management involves adjusting investments in liquid assets based on expected loan demand and deposit flows[214]. Regulatory and Compliance - The Holding Company is subject to various legal and regulatory policies impacting its ability to pay dividends on its stock, which depend on cash and liquidity available at the Holding Company level[227]. - Federal income tax laws provided deductions totaling $2.3 million for thrift bad debt reserves established before 1988, which could create a tax liability if certain conditions are met[228]. - The company maintains effective disclosure controls and procedures as of March 31, 2022[232]. - No changes were made to internal controls over financial reporting in Q1 2022 that materially affected the reporting[232]. - The company is not involved in any pending legal proceedings that would materially adversely affect its financial condition or results of operations[235].