Cf Bankshares (CFBK) Q2 EPS Jumps 196%

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]