CF Bankshares (US:CFBK)2024-05-14 18:16Deposits and Liquidity - Total deposits decreased by $21.0 million, or 1.2%, to $1.7 billion at March 31, 2024, compared to $1.7 billion at December 31, 2023[223] - Brokered deposits decreased by $51.1 million, or 11.6%, to $389.3 million as of March 31, 2024[249] - CFBank relies on competitive interest rates and customer service to retain deposits, with FDIC insurance coverage up to $250,000 per depositor[263] - Cash, unpledged securities, and deposits in other financial institutions totaled $237.3 million as of March 31, 2024, down from $262.0 million[262] - CFBank's total liquidity resources amounted to $638.4 million as of March 31, 2024, slightly down from $646.9 million[262] Loans and Credit Quality - The allowance for credit losses on loans increased by $1.3 million, or 7.9%, to $18.2 million at March 31, 2024, from $16.9 million at December 31, 2023[218] - Nonperforming loans increased by $2.2 million to $7.9 million at March 31, 2024, resulting in a ratio of nonperforming loans to total loans of 0.46%[220] - Total past due loans increased by $3.4 million to $5.4 million at March 31, 2024, representing 0.3% of the loan portfolio[221] - The level of total criticized and classified loans increased by $2.1 million, or 16.2%, during the three months ended March 31, 2024[246] - The allowance for credit losses on loans is deemed adequate as of March 31, 2024, but future additions may be necessary based on economic conditions[248] Financial Performance - Net income for the three months ended March 31, 2024, was $3.1 million, or $0.47 per diluted common share, down from $4.4 million, or $0.68 per diluted common share, for the same period in 2023[252] - Interest income increased by $4.9 million, or 20.3%, to $29.1 million for the quarter ended March 31, 2024, attributed to a 51bps increase in average yield on loans and leases[253] - Interest expense rose by $6.4 million, or 55.6%, to $17.8 million for the quarter ended March 31, 2024, primarily due to a 134bps increase in the average rate of interest-bearing deposits[253] - Net change in net interest income was a decrease of $1.45 million, reflecting a decline in interest-earning assets[259] - The effective tax rate for the quarter ended March 31, 2024, was approximately 18.5%, down from approximately 19.5% for the same quarter in 2023[255] Assets and Equity - Total assets decreased by $19.1 million, or 0.9%, to $2.0 billion as of March 31, 2024, primarily due to a $24.7 million decrease in cash and cash equivalents[242] - Stockholders' equity increased by $2.6 million, or 1.7%, to $158.0 million as of March 31, 2024, primarily due to net income, partially offset by dividend payments[251] - Total interest-earning assets amounted to $4.91 billion, with loans and leases contributing $3.67 billion, and securities at $0.86 billion[259] Securities and Borrowing - Securities available for sale decreased by $495,000, or 6.1%, to $7.6 million at March 31, 2024, compared to $8.1 million at December 31, 2023[217] - The Company had an outstanding balance of $34.5 million on its $35.0 million credit facility as of March 31, 2024[224] - CFBank's additional borrowing capacity at the FHLB increased by $8.0 million, or 4.4%, to $191.7 million as of March 31, 2024[262] - CFBank's additional borrowing capacity at the FRB rose by $8.3 million, or 6.0%, reaching $144.5 million as of March 31, 2024[262] - The Holding Company has a $35.0 million credit facility with a third-party bank, with an outstanding balance of $34.5 million as of March 31, 2024[265] Regulatory and Compliance - CFBank's Community Reinvestment Act rating is "Needs to Improve," primarily due to its legacy direct-to-consumer residential mortgage business[215] - The credit facility bears interest at a fixed rate of 3.85% until May 21, 2026, after which it will convert to a floating rate[265]