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CF BANKSHARES INC.

CF BANKSHARES INC.CFBKEarnings & Financial Report

Nasdaq · Financials · National Commercial Banks

CF Bankshares Inc. is a U.S.-based regional bank holding company operating through its community bank subsidiary. It offers a full suite of personal and commercial banking solutions including deposit products, various loan options, wealth management services and digital banking tools, primarily serving individual consumers and small-to-medium business clients across the U.S. Midwest region.

What changed in CF BANKSHARES INC.'s 10-K — 2023 vs 2024

Top changes in CF BANKSHARES INC.'s 2024 10-K

568 paragraphs added · 607 removed · 481 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

93 edited+6 added−17 removed195 unchanged
The ACL - Loans is a valuation account that is deducted from the loans and leases' amortized cost basis to present the net amount expected to be collected on loans and leases over the contractual term. Loans and leases are charged off against the allowance when the uncollectibility of the loan or lease is confirmed.
The ACL - Loans is a valuation account that is deducted from the amortized cost basis of loans and leases to present the net amount expected to be collected on loans and leases over the contractual term. Loans and leases are charged off against the allowance when the uncollectibility of the loan or lease is confirmed.
In general, in addition to its existing liquid assets, sources of liquidity include funds raised in the securities markets through debt or equity offerings, dividends received from its subsidiaries or the sale of assets. Dividends from CFBank serve as a potential source of liquidity to the Holding Company to meet its obligations.
In general, in addition to its existing liquid assets, sources of liquidity include funds raised in the securities markets through debt or equity offerings, dividends received from CFBank or the sale of assets. Dividends from CFBank serve as a potential source of liquidity to the Holding Company to meet its obligations.
CFBank also offers its clients the convenience of online internet banking, mobile banking, and remote deposit capabilities. 4 Table of Contents Our revenues are derived principally from the generation of interest and fees on loans originated and noninterest income generated on the sale of loans.
CFBank also offers its clients the convenience of online banking, mobile banking and remote deposit capabilities. 4 Table of Contents Our revenues are derived principally from the generation of interest and fees on loans originated and noninterest income generated on the sale of loans.
CFBank is a direct endorsed underwriter, a designation by the Department of Housing and Urban Development that allows us to offer loans insured by the Federal Housing Authority (“FHA”). CFBank is approved by the Department of Veterans Affairs (“VA”) to originate and approve VA loans.
CFBank is a direct endorsed underwriter, a designation by the Department of Housing and Urban Development that allows us to offer loans insured by the Federal Housing Authority (“FHA”). CFBank is also approved by the Department of Veterans Affairs (“VA”) to originate and approve VA loans.
The Company’s management believes that CFBank met the ratio requirements to be deemed “well-capitalized” according to the guidelines described above as of December 31, 2023. The Holding Company currently qualifies under the FRB’s Small Bank Holding Company Policy Statement for exemption from the FRB’s consolidated risk-based capital and leverage rules at the holding company level.
The Company’s management believes that CFBank met the ratio requirements to be deemed “well-capitalized” according to the guidelines described above as of December 31, 2024. The Holding Company currently qualifies under the FRB’s Small Bank Holding Company Policy Statement for exemption from the FRB’s consolidated risk-based capital and leverage rules at the holding company level.
See the section titled “Financial Condition - Allowance for credit losses on loans” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K and Notes 1 and 4 in the accompanying Notes to Consolidated Financial Statements for detailed information on criticized and classified loans as of December 31, 2023 and 2022.
See the section titled “Financial Condition - Allowance for credit losses on loans” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K and Notes 1 and 4 in the accompanying Notes to Consolidated Financial Statements for detailed information on criticized and classified loans as of December 31, 2024 and 2023.
See the section titled “Financial Condition - Allowance for credit losses on loans” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K and Notes 1 and 4, in the accompanying Notes to Consolidated Financial Statements for additional information on nonperforming loans and modified loans as of December 31, 2023 and 2022.
See the section titled “Financial Condition - Allowance for credit losses on loans” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K and Notes 1 and 4, in the accompanying Notes to Consolidated Financial Statements for additional information on nonperforming loans and modified loans as of December 31, 2024 and 2023.
In response to the COVID-19 pandemic, the Federal Reserve Board reduced reserve requirement ratios to 0% effective on March 26, 2020, to support lending to households and businesses. The reserve requirement ratio remained at 0% as of December 31, 2023. Federal Home Loan Bank The Federal Home Loan Banks (“FHLBs”) provide credit to their members in the form of advances.
In response to the COVID-19 pandemic, the Federal Reserve Board reduced reserve requirement ratios to 0% effective on March 26, 2020, to support lending to households and businesses. The reserve requirement ratio remained at 0% as of December 31, 2024. Federal Home Loan Bank The Federal Home Loan Banks (“FHLBs”) provide credit to their members in the form of advances.
Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would total $473,000 at year-end 2023. However, if CFBank were wholly or partially liquidated or otherwise ceases to be a bank, or if tax laws were to change, this amount would have to be recaptured and a tax liability recorded.
Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would total $473,000 at year-end 2024. However, if CFBank were wholly or partially liquidated or otherwise ceases to be a bank, or if tax laws were to change, this amount would have to be recaptured and a tax liability recorded.
Classified loans include all nonaccrual loans, which are discussed in further detail in the section below titled “Nonperforming Assets” . In addition to nonaccrual loans, classified loans include loans that were identified as substandard assets, were still accruing interest at December 31, 2023, but exhibit weaknesses that could lead to nonaccrual status in the future.
Classified loans include all nonaccrual loans, which are discussed in further detail in the section below titled “Nonperforming Assets” . In addition to nonaccrual loans, classified loans include loans that were identified as substandard assets, were still accruing interest at December 31, 2024, but exhibit weaknesses that could lead to nonaccrual status in the future.
See the section titled “ Financial Condition - Foreclosed Assets” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K and Note 5 in the accompanying Notes to Consolidated Financial Statements for information regarding foreclosed assets at December 31, 2023.
See the section titled “ Financial Condition - Foreclosed Assets” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K and Note 5 in the accompanying Notes to Consolidated Financial Statements for information regarding foreclosed assets at December 31, 2024.
Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for BSA compliance; expands enforcement-related and investigation-related authority, including increasing available sanctions for certain BSA violations and instituting BSA whistleblower initiatives and protections. 20 Table of Contents Office of Foreign Assets Control Regulation The U.S.
Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for BSA compliance; expands enforcement-related and investigation-related authority, including increasing available sanctions for certain BSA violations and instituting BSA whistleblower initiatives and protections. Office of Foreign Assets Control Regulation The U.S.
There were no outstanding borrowings from the Federal Reserve Bank at December 31, 2023. At December 31, 2023 and 2022, CFBank had $65.0 million of availability in unused lines of credit with two commercial banks. There were no outstanding borrowings on these lines of credit at December 31, 2023 or December 31, 2022.
There were no outstanding borrowings from the Federal Reserve Bank at December 31, 2024. At December 31, 2024 and 2023, CFBank had $65.0 million of availability in unused lines of credit with two commercial banks. There were no outstanding borrowings on these lines of credit at December 31, 2024 or December 31, 2023.
If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating and maintenance costs after acquisition are expensed. There were no foreclosed assets at December 31, 2023 or December 31, 2022.
If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating and maintenance costs after acquisition are expensed. There were no foreclosed assets at December 31, 2024 or December 31, 2023.
After One Year After Five Years One Year or Less through Five Years through Ten Years After Ten Years Total Weighted Weighted Weighted Weighted Weighted Amortized Average Amortized Average Amortized Average Amortized Average Amortized Average Securities Available For Sale Cost Yield Cost Yield Cost Yield Cost Yield Cost Yield Corporate $ - - $ - - $ 9,980 1.03% $ - - $ 9,980 1.03% Issued by U.S. government-sponsored entities and agencies: U.S.
After One Year After Five Years One Year or Less through Five Years through Ten Years After Ten Years Total Weighted Weighted Weighted Weighted Weighted Amortized Average Amortized Average Amortized Average Amortized Average Amortized Average Securities Available For Sale Cost Yield Cost Yield Cost Yield Cost Yield Cost Yield Corporate $ - - $ - - $ 9,983 1.03% $ - - $ 9,983 1.03% Issued by U.S. government-sponsored entities and agencies: U.S.
No final rule implementing this provision of the Dodd-Frank Act has, as of the date of the filing of this Annual Report on Form 10-K, been adopted, but a proposed rule was published in 2016 that expanded upon a prior proposed rule published in 2011.
No final rule implementing this provision of the Dodd-Frank Act has, as of the date of the filing of this Annual Report on Form 10-K, been adopted, but a proposed rule was published in 2016, and again in 2024, that expanded upon a prior proposed rule published in 2011.
A loan considered doubtful has all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, condition and values, highly questionable and improbable.
A loan considered doubtful has all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, condition 8 Table of Contents and values, highly questionable and improbable.
The applicability date for the majority of the changes to the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027. The Company cannot predict the impact the changes to the CRA will have on its operations at this time.
The applicability date for the majority of the changes to the CRA regulations is January 1, 2026, and additional 19 Table of Contents requirements will be applicable on January 1, 2027. The Company cannot predict the impact the changes to the CRA will have on its operations at this time.
Specifically, the CBLR threshold was reduced to 8.0% for the remainder of 2020, increased to 8.5% for 2021, and returned to 9.0% on January 1, 2022. This final rule became effective on October 1, 2020. The Company did not utilize the CBLR in assessing capital adequacy and, instead, continued to follow existing capital rules.
Specifically, the CBLR threshold was reduced to 8.0% for the remainder of 2020, increased to 8.5% for 2021, and returned to 9.0% on January 1, 2022. This final rule became effective on October 1, 2020. The Company does not utilize the CBLR in assessing capital adequacy and, instead, continues to follow existing capital rules.
See Notes 1 and 3 in the accompanying Notes to Consolidated Financial Statements for a detailed discussion of management’s evaluation of securities for impairment. ‎ 11 Table of Contents The following table sets forth certain information regarding the amortized cost and fair value of securities at the dates indicated At December 31, 2023 2022 2021 Securities Available For Sale Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Corporate debt $ 9,980 $ 7,100 $ 9,978 $ 7,500 $ 9,976 $ 9,750 Issued by U.S. government-sponsored entities and agencies: U.S.
See Notes 1 and 3 in the accompanying Notes to Consolidated Financial Statements for a detailed discussion of management’s evaluation of securities for impairment. ‎ 11 Table of Contents The following table sets forth certain information regarding the amortized cost and fair value of securities at the dates indicated At December 31, 2024 2023 2022 Securities Available For Sale Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Corporate debt $ 9,983 $ 7,700 $ 9,980 $ 7,100 $ 9,978 $ 7,500 Issued by U.S. government-sponsored entities and agencies: U.S.
We seek to minimize the additional risk presented by adjustable-rate commercial loans through underwriting criteria that require such loans to be qualified at origination with sufficient debt coverage ratios under increasing interest rate scenarios. Construction and Land Lending .
We seek to minimize the additional risk presented by adjustable-rate commercial loans through underwriting criteria that require such loans to be qualified at origination with sufficient debt coverage ratios under increasing interest rate scenarios. 7 Table of Contents Construction and Land Lending .
Failure to comply with these sanctions could have serious financial, legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.
Failure to comply with these sanctions could have serious financial, legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions 20 Table of Contents when regulatory approval is required or to prohibit such transactions even if approval is not required.
Management regularly evaluates the internal cost of funds, surveys rates offered by competitors, reviews cash flow requirements for lending and liquidity, and executes rate changes when necessary as part of its asset/liability management, profitability and liquidity objectives. Money market accounts represent the largest portion of our deposit portfolio and totaled 41.4% of average deposit balances in 2023.
Management regularly evaluates the internal cost of funds, surveys rates offered by competitors, reviews cash flow requirements for lending and liquidity, and executes rate changes when necessary as part of its asset/liability management, profitability and liquidity objectives. Money market accounts represent the largest portion of our deposit portfolio and totaled 40.6% of average deposit balances in 2024.
The volume and types of single-family ARM loan originations are affected by market factors such as the level of interest rates, consumer preferences, competition and the availability of funds. For several years, demand for single-family ARM loans was weak due to consumer preference for fixed-rate loans as a result of the low interest rate environment.
The volume and types of single-family ARM loan originations are affected by market factors such as the level of interest rates, consumer preferences, competition and the availability of funds. For several years, demand for single-family ARM loans was strong due to consumer preference for ARM loans as a result of the high interest rate environment.
This clawback 21 Table of Contents policy is intended to apply to compensation paid the three completed fiscal years immediately preceding the date the issuer is required to prepare a restatement and would cover all executives who received incentive awards. The Company adopted its Clawback policy effective November 29, 2023.
This clawback policy is intended to apply to compensation paid within the three completed fiscal years immediately preceding the date the issuer is required to prepare a restatement and would cover all executives who received incentive awards. The Company adopted its Clawback policy effective November 29, 2023.
In addition to access to FHLB advances, CFBank has borrowing capacity available with the Federal Reserve Bank of Cleveland through the Borrower-in-Custody program. The borrowings are collateralized by commercial loans and commercial real estate loans. Based on the collateral pledged, CFBank was eligible to borrow up to a total of $136.2 million at year-end 2023.
In addition to access to FHLB advances, CFBank has borrowing capacity available with the Federal Reserve Bank of Cleveland through the Borrower-in-Custody program. The borrowings are collateralized by commercial loans and commercial real estate loans. Based on the collateral pledged, CFBank was eligible to borrow up to a total of $127.4 million at year-end 2024.
The rating assigned to a financial institution is considered in connection with various applications submitted by the financial institution or its holding company to its banking regulators, including applications to acquire another financial institution or 19 Table of Contents to open or close a branch office.
The rating assigned to a financial institution is considered in connection with various applications submitted by the financial institution or its holding company to its banking regulators, including applications to acquire another financial institution or to open or close a branch office.
FHLB advances are made pursuant to several credit programs, each of which has its own interest rate and range of maturities. The maximum amount that the FHLB will advance to member institutions fluctuates from time to time in accordance with the policies of the FHLB. FHLB advances totaled $76.5 million at December 31, 2023.
FHLB advances are made pursuant to several credit programs, each of which has its own interest rate and range of maturities. The maximum amount that the FHLB will advance to member institutions fluctuates from time to time in accordance with the policies of the FHLB. FHLB advances totaled $58.0 million at December 31, 2024.
Commercial, commercial real estate and multi-family mortgage loans, including related construction loans, totaled $1.2 billion in the aggregate and represented 68.4% of the gross loan portfolio at December 31, 2023, as compared to 66.9% of the gross loan portfolio at December 31, 2022.
Commercial, commercial real estate and multi-family mortgage loans, including related construction loans, totaled $1.2 billion in the aggregate and represented 69.1% of the gross loan portfolio at December 31, 2024, as compared to 68.4% of the gross loan portfolio at December 31, 2023.
Consumer and Other Lending . The consumer loan portfolio generally consists of home equity lines of credit, home improvement loans, loans secured by deposits and purchased loans. At December 31, 2023, our consumer loan portfolio totaled $38.4 million, which was 2.2% of gross loans receivable.
Consumer and Other Lending . The consumer loan portfolio generally consists of home equity lines of credit, home improvement loans, loans secured by deposits and purchased loans. At December 31, 2024, our consumer loan portfolio totaled $42.5 million, which was 2.4% of gross loans receivable.
See Note 16, Regulatory Capital Matters, in the accompanying Notes to Consolidated Financial Statements for additional information. The Holding Company’s available cash and cash equivalents totaled $530,000 at December 31, 2023. Management believes that the Holding Company had adequate funds and liquidity sources at December 31, 2023 to meet its current and anticipated operating needs at this time .
See Note 16, Regulatory Capital Matters, in the accompanying Notes to Consolidated Financial Statements for additional information. The Holding Company’s available cash and cash equivalents totaled $1.0 million at December 31, 2024. Management believes that the Holding Company had adequate funds and liquidity sources at December 31, 2024 to meet its current and anticipated operating needs at this time .
The remainder of our loan portfolio consists of consumer loans, which totaled $38.4 million, or 2.2% of gross loans receivable, at year-end 2023. The types of loans originated are subject to federal and state laws and regulations.
The remainder of our loan portfolio consists of consumer loans, which totaled $42.5 million, or 2.4% of gross loans receivable, at year-end 2024. The types of loans originated are subject to federal and state laws and regulations.
For information on real estate owned (“REO”) and other foreclosed assets, see the section below titled “Foreclosed Assets.” 9 Table of Contents Allowance for Credit Losses on Loans and Leases (ACL - Loans).
For information on real estate owned (“REO”) and other foreclosed assets, see the section below titled “Foreclosed Assets.” Allowance for Credit Losses on Loans and Leases (ACL - Loans).
Treasury and federal entity/agency securities meeting the policy’s guidelines, mortgage-backed securities and collateralized mortgage obligations insured or guaranteed by the United States government and its entities/agencies, municipal and corporate bonds and other investment instruments. At December 31, 2023, the securities available for sale portfolio totaled $8.1 million.
Treasury and federal entity/agency securities meeting the policy’s guidelines, mortgage-backed securities and collateralized mortgage obligations insured or guaranteed by the United States government and its entities/agencies, municipal and corporate bonds and other investment instruments. At December 31, 2024, the securities available for sale portfolio totaled $8.7 million. At December 31, 2024, all U.S.
At December 31, 2023, cash, unpledged securities, and deposits in other financial institutions totaled $262.0 million. CFBank is a participant in the Certificate of Deposit Account Registry Service® (CDARS) and Insured Cash Sweep (ICS) programs offered through IntraFi Network.
At December 31, 2024, cash, unpledged securities, and deposits in other financial institutions totaled $237.9 million. CFBank is a participant in the Certificate of Deposit Account Registry Service® (CDARS) and Insured Cash Sweep (ICS) programs offered through IntraFi Network.
Certificate of deposit accounts represent the second largest portion of our deposit portfolio and totaled 37.4% of average deposit balances in 2023. The term of the certificates of deposit typically offered vary from six months to five years at rates established by management.
Certificate of deposit accounts represent the second largest portion of our deposit portfolio and totaled 38.5% of average deposit balances in 2024. The term of the certificates of deposit typically offered vary from six months to five years at rates established by management.
Despite the decline in the reserve ratio, the FDIC staff projected that the reserve ratio remains on track to reach the statutory minimum of 1.35% ahead of the deadline of September 30, 2028. As a result, the FDIC staff recommended no changes to the amended restoration plan and all scheduled 18 Table of Contents assessment rates were maintained.
The FDIC staff projected that the reserve ratio remains on track to reach the statutory minimum of 1.35% ahead of the deadline of September 30, 2028. As a result, the FDIC staff recommended no changes to the amended restoration plan and all scheduled assessment rates were maintained. 18 Table of Contents Limitations on Dividends and Other Capital Distributions.
For the year ended December 31, 2023, the amount of additional interest income that would have been recognized on nonaccrual loans, if such loans had continued to perform in accordance with their contractual terms, was approximately $251,000. There was no interest income recognized on nonaccrual loans in 2023.
For the year ended December 31, 2024, the amount of additional interest income that would have been recognized on nonaccrual loans, if such loans had continued to perform in accordance with their contractual terms, was approximately $1.2 million. There was no interest income recognized on nonaccrual loans in 2024.
Deposits are obtained predominantly from the areas in which CFBank’s offices are located. We rely primarily on a willingness to pay market-competitive interest rates to attract and retain retail deposits, as well as customer service and relationships with customers. At December 31, 2023, CFBank had $440.4 million in brokered deposits with maturity dates from January 2024 through February 2027.
Deposits are obtained predominantly from the areas in which CFBank’s offices are located. We rely primarily on a willingness to pay market-competitive interest rates to attract and retain retail deposits, as well as customer service and relationships with customers. At December 31, 2024, CFBank had $420.8 million in brokered deposits with maturity dates from January 2025 through March 2028.
At December 31, 2023, the Company’s assets totaled $2.1 billion and stockholders’ equity totaled $155.4 million. CFBank is a nationally chartered boutique commercial bank operating primarily in four (4) major metro markets: Columbus, Cleveland, and Cincinnati, Ohio, and Indianapolis, Indiana.
At December 31, 2024, the Company’s assets totaled $2.1 billion and stockholders’ equity totaled $168.4 million. CFBank is a nationally chartered boutique commercial bank operating primarily in five (5) major metro markets: Columbus, Cleveland, Cincinnati, and Akron, Ohio, and Indianapolis, Indiana.
IntraFi works with a network of banks to offer products that can provide FDIC insurance coverage in excess of $250,000 through these innovative products. Brokered deposits, including CDARS and ICS deposits that qualify as brokered, totaled $440.4 million at December 31, 2023, and increased $148.6 million, or 50.9%, from $291.8 million at December 31, 2022.
IntraFi works with a network of banks to offer products that can provide FDIC insurance coverage in excess of $250,000 through these innovative products. Brokered deposits, including CDARS and ICS deposits that qualify as brokered, totaled $420.8 million at December 31, 2024, and decreased $19.6 million, or 4.4%, from $440.4 million at December 31, 2023.
We believe the ACL - Loans is adequate to absorb probable incurred credit losses in the loan portfolio as of December 31, 2023; however, future additions to the allowance may be necessary based on factors including, but not limited to, deterioration in client business performance, recessionary economic conditions, declines in borrowers’ cash flows and market conditions which result in lower real estate values.
The ratio of the ACL - Loans to total loans was 1.00% at December 31, 2024, compared to 0.99% at December 31, 2023. 9 Table of Contents We believe the ACL - Loans is adequate to absorb probable incurred credit losses in the loan portfolio as of December 31, 2024; however, future additions to the allowance may be necessary based on factors including, but not limited to, deterioration in client business performance, recessionary economic conditions, declines in borrowers’ cash flows and market conditions which result in lower real estate values.
We seek to minimize and mitigate these risks through underwriting policies which require such loans to be qualified at origination on the basis of the property’s income and debt coverage ratio and the financial strength of the property owners and/or guarantors. 7 Table of Contents Commercial Lending .
We seek to minimize and mitigate these risks through underwriting policies which require such loans to be qualified at origination on the basis of the property’s income and debt coverage ratio and the financial strength of the property owners and/or guarantors. Commercial Lending . The origination of commercial loans continues to be a significant component of our lending activity.
During 2023, construction loans increased by $6.6 million, or 3.6%, to $190.7 million, as compared to the $184.1 million in the portfolio at year-end 2022. CFBank’s strong capital levels have allowed CFBank to take advantage of select market opportunities in this area within the risk tolerances we have identified.
During 2024, construction loans increased by $11.4 million, or 6.0%, to $202.2 million, as compared to the $190.7 million in the portfolio at year-end 2023. CFBank’s strong capital levels have allowed CFBank to take advantage of select market opportunities in this area within the risk tolerances we have identified.
The credit facility is revolving until May 21, 2024, at which time any then-outstanding balance will be converted to a 10-year term note on a graduated 10-year amortization.
The credit facility was revolving until May 21, 2024, at which time the outstanding balance was converted to a 10-year term note on a graduated 10-year amortization.
The following table sets forth certain information regarding short-term borrowings at or for the periods ended on the dates indicated (Dollars in thousands) For the Year ended December 31, 2023 2022 2021 Short-term FHLB advances and other borrowings: Average balance outstanding $ 223 $ - $ 9,076 Maximum amount outstanding at any month-end during the period - - 23,426 Balance outstanding at end of period - - - Weighted average interest rate during the period 4.91% - 3.02% Personnel As of December 31, 2023, the Company had 103 full-time and 5 part-time employees.
The following table sets forth certain information regarding short-term borrowings at or for the periods ended on the dates indicated (Dollars in thousands) For the Year ended December 31, 2024 2023 2022 Short-term FHLB advances and other borrowings: Average balance outstanding $ 214 $ 223 $ - Maximum amount outstanding at any month-end during the period 26,000 - - Balance outstanding at end of period - - - Weighted average interest rate during the period 5.48% 4.91% - Personnel As of December 31, 2024, the Company had one part-time and 102 full-time employees.
An increase in loan losses could occur if economic conditions and factors which affect credit quality, real estate values and general business conditions worsen or do not improve. 2023 2022 2021 ACL-Loans, beginning of period $ 16,062 $ 15,508 $ 17,022 Impact of adoption ASC 326 (409) - - Balances, January 1, 2023 post ASC 326 adoption 15,653 15,508 17,022 Charge-offs: Real estate loans: Single-family - - 17 Consumer loans: Other 3 - - Commercial loans 775 263 - Total charge-offs 778 263 17 Recoveries on loans previously charged off: Recoveries Real estate loans: Single-family 40 19 26 Consumer loans: Home equity 4 11 21 Other 3 - - Commercial loans 85 - 56 Total recoveries 132 30 103 Net charge-offs (recoveries) 646 233 (86) Provision for credit losses on loans 1,858 787 (1,600) ACL - Loans, end of period $ 16,865 $ 16,062 $ 15,508 ACL - Loans to total loans and leases 0.99% 1.01% 1.26% ACL - Loans to nonperforming loans 294.74% 2110.64% 1555.47% Net charge-offs (recoveries) to ACL - Loans 3.83% 1.45% -0.55% Net charge-offs (recoveries) to average loans and leases 0.04% 0.02% -0.01% The impact of economic conditions on the housing market, collateral values, and businesses’ and consumers’ ability to pay may increase the level of charge-offs in the future.
An increase in loan losses could occur if economic conditions and factors which affect credit quality, real estate values and general business conditions worsen or do not improve. 2024 2023 2022 ACL-Loans, beginning of period $ 16,865 $ 16,062 $ 15,508 Impact of adoption ASC 326 - (409) - Balances, January 1, 2023 post ASC 326 adoption 16,865 15,653 15,508 Charge-offs: Real estate loans: Single-family - - - Consumer loans: Other 280 3 - Commercial loans 5,323 775 263 Total charge-offs 5,603 778 263 Recoveries on loans previously charged off: Recoveries Real estate loans: Single-family 28 40 19 Consumer loans: Home equity 6 4 11 Other - 3 - Commercial loans 91 85 - Total recoveries 125 132 30 Net charge-offs (recoveries) 5,478 646 233 Provision for credit losses on loans 6,087 1,858 787 ACL - Loans, end of period $ 17,474 $ 16,865 $ 16,062 ACL - Loans to total loans and leases 1.00% 0.99% 1.01% ACL - Loans to nonperforming loans 116.13% 294.74% 2110.64% Net charge-offs (recoveries) to ACL - Loans 31.35% 3.83% 1.45% Net charge-offs (recoveries) to average loans and leases 0.32% 0.04% 0.02% The impact of economic conditions on the housing market, collateral values, and businesses’ and consumers’ ability to pay may increase the level of charge-offs in the future.
Based on the collateral pledged, CFBank was eligible to borrow up to a total of $260.2 million at year-end 2023. 13 Table of Contents The Holding Company has a $35 million facility with a third-party bank.
Based on the collateral pledged, CFBank was eligible to borrow up to a total of $244.6 million at year-end 2024. 13 Table of Contents The Holding Company has a $35.0 million credit facility with a third-party bank.
At December 31, 2023 2022 2021 Amount % of Loans in each Category Amount % of Loans in each Category Amount % of Loans in each Category (Dollars in thousands) Real estate loans: Single-family $ 3,371 27.95% $ 3,914 29.28% $ 3,348 28.20% Multi-family 1,231 7.64% 997 6.56% 827 6.24% Commercial real estate 4,105 25.31% 3,384 23.62% 5,034 29.24% Construction 1,707 11.15% 2,644 11.59% 1,744 6.78% Consumer loans: Home equity lines of credit 334 2.10% 333 1.93% 272 1.97% Other 233 .14% 26 .11% 156 .17% Commercial loans 5,884 25.71% 4,764 26.91% 4,127 27.40% Total $ 16,865 100.00% $ 16,062 100.00% $ 15,508 100.00% Foreclosed Assets Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.
At December 31, 2024 2023 2022 Amount % of Loans in each Category Amount % of Loans in each Category Amount % of Loans in each Category (Dollars in thousands) Real estate loans: Single-family $ 2,787 26.76% $ 3,371 27.95% $ 3,914 29.28% Multi-family 1,382 8.65% 1,231 7.64% 997 6.56% Commercial real estate 3,918 26.45% 4,105 25.31% 3,384 23.62% Construction 1,741 11.62% 1,707 11.15% 2,644 11.59% Consumer loans: Home equity lines of credit 371 2.27% 334 2.10% 333 1.93% Other 270 .17% 233 .14% 26 .11% Commercial loans 7,005 24.08% 5,884 25.71% 4,764 26.91% Total $ 17,474 100.00% $ 16,865 100.00% $ 16,062 100.00% Foreclosed Assets Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.
Our principal market area for loans and deposits includes the following counties: Franklin County through our office in Columbus, Ohio (formerly located in Worthington, Ohio until March 1, 2023); Delaware County, Ohio through our Polaris office in Columbus, Ohio; Cuyahoga County through our office in Woodmere, Ohio and our Ohio City office in Cleveland, Ohio; Summit County through our office in Fairlawn, Ohio; Hamilton County through our offices in Blue Ash, Ohio and our Red Bank office in Cincinnati, Ohio; and Marion County, Indiana through our office in Indianapolis.
Our principal market area for deposits and loans includes the following counties in Ohio and Indiana: Franklin County, Ohio through our offices in Columbus, Ohio; Delaware County, Ohio through our Polaris office in Columbus, Ohio; Cuyahoga County, Ohio through our office in Orange Village, Ohio and our Ohio City office in Cleveland, Ohio; Summit County, Ohio through our office in Fairlawn, Ohio; Hamilton County, Ohio through our offices in Blue Ash, Ohio and our Red Bank office in Cincinnati, Ohio; and Marion County, Indiana through our office in Indianapolis.
In conjunction with competitive product offerings in the market, and the lack of availability for mortgage insurance, jumbo loans and portfolio ARM loans exceeding 80% are often originated without mortgage insurance. Portfolio single-family residential ARM loans totaled $90.9 million, or 19.0% of the single-family mortgage loan portfolio, at December 31, 2023.
In conjunction with competitive product offerings in the market, and the lack of availability for mortgage insurance, jumbo loans and portfolio ARM loans exceeding 80% are often originated without mortgage insurance. Portfolio single-family residential ARM loans totaled $99.1 million, or 21.3% of the single-family mortgage loan portfolio, at December 31, 2024.
During 2023, our consumer loan portfolio increased $5.9 million, or 18.1%, over the year-end 2022 balance of $32.5 million. Home equity lines of credit include those loans we originate for our portfolio and purchased loans. We offer a variable rate home equity line of credit product which we originate for our portfolio.
During 2024, our consumer loan portfolio increased $4.1 million, or 10.8%, over the year-end 2023 balance of $38.4 million. Home equity lines of credit include those loans we originate for our portfolio and purchased loans. We offer a variable rate home equity line of credit product which we originate for our portfolio.
Commercial, commercial real estate and multi-family loans are originated with fixed, floating and ARM interest rates. Fixed-rate loans are typically limited to terms of three to five years. CFBank has also utilized interest-rate swaps to protect the related fixed-rate loans from changes in value due to changes in interest rates.
Commercial, commercial real estate and multi-family loans are originated with fixed, floating and adjustable-rate mortgage (“ARM”) interest rates. Fixed-rate loans are typically limited to terms of three to five years. CFBank has also utilized interest-rate swaps to economically protect the related fixed-rate loans from changes in value due to changes in interest rates but does not apply hedge accounting.
Customer balances in the CDARS reciprocal and ICS reciprocal programs, which do not qualify as brokered, totaled $237.8 million at December 31, 2023 and increased $79.9 million, or 50.6%, from $157.9 million at December 31, 2022. As of December 31, 2023 and 2022, deposits exceeding the FDIC insured limit of $250,000 totaled $509.7 million and $690.4 million, respectively.
Customer balances in the CDARS reciprocal and ICS reciprocal programs, which do not qualify as brokered, totaled $271.7 million at December 31, 2024 and increased $33.9 million, or 14.3%, from $237.8 million at December 31, 2023. As of December 31, 2024 and 2023, deposits exceeding the FDIC insured limit of $250,000 totaled $522.4 million and $509.7 million, respectively.
Commercial, commercial real estate and multi-family mortgage loan balances, including related construction loans, increased $108.4 million, or 10.2%, during 2023. Portfolio single-family residential mortgage loans, including related construction loans, totaled $502.8 million and represented 29.4% of total gross loans at year-end 2023, compared to 31.1% at year-end 2022.
Commercial, commercial real estate and multi-family mortgage loan balances, including related construction loans, increased $32.9 million, or 2.8%, during 2024. Portfolio single-family residential mortgage loans, including related construction loans, totaled $494.2 million and represented 28.4% of total gross loans at year-end 2024, compared to 29.4% at year-end 2023.
Treasury 1,007 988 3,025 2,925 6,551 6,561 Mortgage-backed securities - residential 4 4 17 17 35 36 Total $ 10,991 $ 8,092 $ 13,020 $ 10,442 $ 16,562 $ 16,347 The following table sets forth information regarding the amortized cost, weighted average yield and contractual maturity dates of debt securities as of December 31, 2023.
Treasury 982 983 1,007 988 3,025 2,925 Mortgage-backed securities - residential - - 4 4 17 17 Total $ 10,965 $ 8,683 $ 10,991 $ 8,092 $ 13,020 $ 10,442 The following table sets forth information regarding the amortized cost, weighted average yield and contractual maturity dates of debt securities as of December 31, 2024.
The Holding Company also is subject to various legal and regulatory policies and requirements impacting the Holding Company’s ability to pay dividends on its stock. In addition, the Holding Company’s ability to pay dividends on its stock is conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities.
In addition, the Holding Company’s ability to pay dividends on its stock is conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities.
The amendments also enhanced existing disclosure requirements and introduced new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. During the year ended December 31, 2023, the Company modified one commercial loan, totaling $2.9 million, where the borrower was experiencing financial difficulty.
The amendments also enhanced existing disclosure requirements and introduced new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. During the year ended December 31, 2024, the Company modified one commercial loan, with an amortized cost basis of $4.3 million at December 31, 2024, where the borrower was experiencing financial difficulty.
Demand loans and other loans having no stated schedule of repayments or no stated maturity are reported as due within one year. The table does not include potential prepayments or scheduled principal amortization.
The following table shows the remaining contractual maturity of CFBank’s loan portfolio at December 31, 2024. Demand loans and other loans having no stated schedule of repayments or no stated maturity are reported as due within one year. The table does not include potential prepayments or scheduled principal amortization.
Loans are classified into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors.
We have incorporated the regulatory asset classifications as a part of our credit monitoring and internal loan risk rating system. Loans are classified into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors.
All single-family mortgage loans sold are underwritten according to Federal Home Loan Mortgage Corporation (Freddie Mac) or Federal National Mortgage Association (Fannie Mae) guidelines, or are underwritten to comply with additional guidelines as may be 6 Table of Contents required by the individual investor.
However, in the past year, demand for ARM loans has declined. All single-family mortgage loans sold are underwritten according to Federal Home Loan Mortgage Corporation (Freddie Mac) or Federal National Mortgage Association (Fannie Mae) guidelines, or are underwritten to comply with additional guidelines as may be required by an individual investor.
Certificate accounts in amounts of $250,000 or more totaled $370.4 million at December 31, 2023, maturing as follows: Maturity Period Amount Weighted Average Rate (Dollars in thousands) Three months or less $ 107,921 4.85% Over 3 through 6 months 105,553 4.42% Over 6 through 12 months 79,736 4.24% Over 12 months 77,209 2.70% Total $ 370,419 The following table sets forth the distribution of average deposit account balances for the periods indicated and the weighted average interest rates on each category of deposits presented.
Certificate accounts in amounts of $250,000 or more totaled $464.0 million at December 31, 2024, maturing as follows: Maturity Period Amount Weighted Average Rate (Dollars in thousands) Three months or less $ 105,454 4.63% Over 3 through 6 months 134,342 4.51% Over 6 through 12 months 139,082 4.30% Over 12 months 85,166 3.40% Total $ 464,044 The following table sets forth the distribution of average deposit account balances for the periods indicated and the weighted average interest rates on each category of deposits presented.
Commercial Real Estate and Multi-Family Residential Mortgage Lending . Origination of commercial real estate and multi-family residential mortgage loans continues to be a significant portion of CFBank’s lending activity. Commercial real estate and multi-family residential mortgage loan balances increased $84.6 million to $563.8 million at December 31, 2023.
Origination of commercial real estate and multi-family residential mortgage loans continues to be a significant portion of CFBank’s lending activity. Commercial real estate and multi-family residential mortgage loan balances increased $46.7 million to $610.5 million at December 31, 2024. This represented an increase of 8.3% over the $563.8 million balance at December 31, 2023.
An independent appraisal of the property is required on all loans greater than or equal to $500,000. In underwriting commercial real estate and multi-family residential mortgage loans, we consider the appraised value and net operating income of the property, the debt service ratio and the property owner’s and/or guarantor’s financial strength, expertise and credit history.
In underwriting commercial real estate and multi-family residential mortgage loans, we consider the appraised value and net operating income of the property, the debt service ratio and the property owner’s and/or guarantor’s financial strength, expertise and credit history. We offer both fixed and adjustable rate loans.
Payments on both fixed and adjustable rate loans are based on 15 to 30 year amortization periods. Commercial real estate and multi-family residential mortgage loans are generally considered to involve a greater degree of risk than single-family residential mortgage loans.
Commercial real estate and multi-family residential mortgage loans are generally considered to involve a greater degree of risk than single-family residential mortgage loans.
For The Year Ended December 31, 2023 2022 2021 Average Balance Percent of Total Average Deposits Average Rate Paid Average Balance Percent of Total Average Deposits Average Rate Paid Average Balance Percent of Total Average Deposits Average Rate Paid (Dollars in thousands) Interest- bearing checking accounts $ 113,141 6.96% 4.41% $ 91,204 6.64% 1.41% $ 92,094 7.60% 0.38% Money market accounts 672,923 41.42% 4.47% 429,606 31.26% 1.76% 282,299 23.28% 0.50% Savings accounts 3,087 0.19% 0.37% 5,582 0.40% 0.19% 15,793 1.30% 0.15% Certificates of deposit 607,147 37.38% 3.51% 594,611 43.26% 1.19% 588,072 48.50% 1.06% Total Interest-bearing deposits 1,396,298 85.95% 4.04% 1,121,003 81.56% 1.42% 978,258 80.68% 0.82% Noninterest-bearing deposits: Demand deposits 228,156 14.05% - 253,440 18.44% - 234,239 19.32% - Total Average Deposits $ 1,624,454 100.00% $ 1,374,443 100.00% $ 1,212,497 100.00% See the sections titled “Financial Condition – Deposits” and “Liquidity and Capital Resources” for additional information regarding deposits.
For The Year Ended December 31, 2024 2023 2022 Average Balance Percent of Total Average Deposits Average Rate Paid Average Balance Percent of Total Average Deposits Average Rate Paid Average Balance Percent of Total Average Deposits Average Rate Paid (Dollars in thousands) Interest- bearing checking accounts $ 112,949 6.67% 4.86% $ 113,141 6.96% 4.41% $ 91,204 6.64% 1.41% Money market accounts 687,965 40.60% 4.59% 672,923 41.42% 4.47% 429,606 31.26% 1.76% Savings accounts 1,134 0.07% 0.96% 3,087 0.19% 0.37% 5,582 0.40% 0.19% Certificates of deposit 652,305 38.49% 4.61% 607,147 37.38% 3.51% 594,611 43.26% 1.19% Total Interest-bearing deposits 1,454,353 85.83% 4.62% 1,396,298 85.95% 4.04% 1,121,003 81.56% 1.42% Noninterest-bearing deposits: Demand deposits 240,098 14.17% - 228,156 14.05% - 253,440 18.44% - Total Average Deposits $ 1,694,451 100.00% $ 1,624,454 100.00% $ 1,374,443 100.00% See the sections titled “Financial Condition – Deposits” and “Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K for additional information regarding deposits.
SEC regulations require public companies such as the Holding Company to provide various disclosures about executive compensation in annual reports and proxy statements and to present to their shareholders a non-binding vote on the approval of executive compensation.
SEC regulations require public companies such as the Holding Company to provide various disclosures about executive compensation in annual reports and proxy statements and to present to their shareholders a non-binding vote on the approval of executive compensation. ‎ 21 Table of Contents Financial Privacy Provisions Federal and state regulations limit the ability of banks and other financial institutions to disclose non-public information about consumers to non-affiliated third parties.
Contractual loan payments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general market interest rates and economic conditions and competition.
CFBank’s primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from sales of loans, borrowings, and funds generated from operations of CFBank. Contractual loan payments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general market interest rates and economic conditions and competition.
We have utilized interest-rate swaps to protect these fixed-rate loans from changes in value due to changes in interest rates, as appropriate. See Note 17 in the accompanying Notes to Consolidated Financial Statements for additional information on interest-rate swaps . Adjustable-rate loans are tied to various market indices and generally adjust monthly or annually.
See Note 17 in the accompanying Notes to Consolidated Financial Statements for additional information on interest-rate swaps . Adjustable-rate loans are tied to various market indices and generally adjust monthly or annually. Payments on both fixed and adjustable rate loans are based on 15 to 30 year amortization periods.
Borrowings on the credit facility bear interest at a fixed rate of 3.85% until May 21, 2026, and the interest rate then converts to a floating rate equal to PRIME with a floor of 3.25%.
Borrowings on the credit facility bear interest at a fixed rate of 3.85% until May 21, 2026, and the interest rate then converts to a floating rate equal to PRIME with a floor of 3.75%. At December 31, 2024, the Company had an outstanding balance, net of unamortized debt issuance costs, of $34.7 million on the facility.
We offer both fixed-rate and adjustable-rate mortgage (“ARM”) loans with maturities generally up to 30 years, priced competitively with current market rates. We offer several ARM loan programs with terms of up to 30 years and, with the majority of the programs, interest rates adjust with a maximum adjustment limitation of 2.0% per year and a 5.0% lifetime cap.
We offer several ARM loan programs with terms of up to 30 years and, with the majority of the programs, interest rates adjust with a maximum initial adjustment limitation of up to 5%, subsequent adjustments of up to 2.0% per six month period and a 5.0% lifetime cap.
We offer both fixed and adjustable rate loans. Fixed rate loans are generally limited to three to five years, at which time they convert to adjustable rate loans. At times, CFBank accommodates loans to borrowers who desire fixed-rate loans for longer than three to five years.
Fixed-rate loans are generally limited to three to five years, at which time they convert to adjustable-rate loans. At times, CFBank accommodates loans to borrowers who desire fixed-rate loans for longer than three to five years. We have utilized interest-rate swaps to economically protect these fixed-rate loans from changes in value due to changes in interest rates, as appropriate.
These regulations affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors. CFBank is also subject to regulatory guidelines establishing standards for safeguarding customer information.
These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-affiliated third party. These regulations affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors. CFBank is also subject to regulatory guidelines establishing standards for safeguarding customer information.
Commercial real estate and multi-family residential mortgage loans are secured by properties generally located in our primary market area. Underwriting policies provide that commercial real estate and multi-family residential mortgage loans may be made in amounts up to 85% of the lower of the appraised value or purchase price of the property.
Underwriting policies provide that commercial real estate and multi-family residential mortgage loans may be made in amounts up to 85% of the lower of the appraised value or purchase price of the property. An independent appraisal of the property is required on all loans greater than or equal to $500,000.
These loans generally pose credit risks not inherent in fixed-rate loans, primarily because as interest rates rise, the borrowers’ payments rise, increasing the potential for default. Periodic and lifetime caps on interest rate increases help to reduce the credit risks associated with ARM loans, but also limit the interest rate sensitivity of such loans.
These loans generally pose credit risks not inherent in fixed-rate loans, primarily because as interest rates rise, the borrowers’ payments rise, increasing the potential for default.
We make efforts, consistent with safety and soundness principles, to work with the borrower and develop action steps to have the loan brought current.
We make efforts, consistent with safety and soundness principles, to work with the borrower and develop action steps to have the loan brought current. If the loan is not brought current, it then becomes necessary to take additional legal actions including the repossession of collateral.
See the section titled “Liquidity and Capital Resources” for information regarding the Holding Company’s liquidity and regulatory matters. Deposits . CFBank offers a variety of deposit accounts with a range of interest rates and terms including savings accounts, retail and business checking accounts, money market accounts and certificates of deposit.
CFBank offers a variety of deposit accounts with a range of interest rates and terms including savings accounts, retail and business checking accounts, money market accounts and certificates of deposit.
This represented an increase of 17.6% over the $479.2 million balance at December 31, 2022. We originate commercial real estate loans that are secured by properties used for business purposes, such as manufacturing facilities, office buildings or retail facilities. We originate multi-family residential mortgage loans that are secured by apartment buildings, condominiums, and multi-family residential houses.
We originate commercial real estate loans that are secured by properties used for business purposes, such as manufacturing facilities, office buildings and retail facilities. We originate multi-family residential mortgage loans that are secured by apartment buildings, condominiums, and multi-family residential houses. Commercial real estate and multi-family residential mortgage loans are secured by properties generally located in our primary market area.
Interest rates charged on loans are affected by the demand for such loans, the supply of money available for lending purposes and the rates offered by competitors.
Interest rates charged on loans are affected by the demand for such loans, the supply of money available for lending purposes and the rates offered by competitors. In turn, these factors are affected by, among other things, economic conditions, fiscal policies of the federal government, monetary policies of the FRB and legislative tax policies. Loan Maturity.
Federal regulations and CFBank’s asset classification policy require use of an internal asset classification system as a means of reporting and monitoring assets. We have incorporated the regulatory asset classifications as a part of our credit monitoring and internal loan risk rating system.
Management uses the results of these reviews to help determine the effectiveness of the existing policies and procedures and to provide an independent assessment of our internal loan risk rating system. Federal regulations and CFBank’s asset classification policy require use of an internal asset classification system as a means of reporting and monitoring assets.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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These failed banks were engaged in activities, such as lending focused on tech startups and cryptocurrency, that are significantly different than the activities and risk profile of community banks such as the Company, and at this time it does not appear that these bank failures are connected to any systematic risks or problems in the financial institutions industry in general.
These failed banks were engaged in activities, such as lending focused on tech startups and cryptocurrency, that are significantly different than the activities and risk profile of community banks such as the Company, and at this time it does not appear that these bank failures were connected to any systematic risks or problems in the financial institutions industry in general.
Additional information regarding our allowance for credit losses methodology and the sensitivity of the estimates can be found in the discussion of "CECL Implementation" included in "ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Form 10-K.
Additional information regarding our allowance for credit losses methodology and the sensitivity of the estimates can be found in the discussion of "CECL Implementation" included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K.
Although to date the Company has not detected a significant compromise, significant data loss or any material financial losses related to cybersecurity attacks, the Company’s systems and those of its customers and third-party service providers are under constant threat and it is possible that the Company could experience a significant event in the future.
Although to date the Company has not detected a significant compromise, significant data loss or any material financial losses related to cybersecurity attacks, the Company’s systems and those of its customers and third-party service providers are under constant threat and it is possible that the Company could experience a significant event in the future.
We are dependent on the creditworthiness of the counterparties and are therefore susceptible to credit and operational risk in these situations. Derivative contracts and other transactions entered into with third parties are not always confirmed by the counterparties on a timely basis.
With regard to derivative transactions, we are dependent on the creditworthiness of the counterparties and are therefore susceptible to credit and operational risk in these situations. Derivative contracts and other transactions entered into with third parties are not always confirmed by the counterparties on a timely basis.
Such events could affect the stability of our deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in lost revenue or cause us to incur additional expenses. It em 1B. Unresolved Staff Comments Not Applicable 35 Table of Contents Item 1C .
Such events could affect the stability of our deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in lost revenue or cause us to incur additional expenses. ‎ 34 Table of Contents It em 1B. Unresolved Staff Comments Not Applicable Item 1C .
Risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking and other technology-based products and services by us and our customers. ‎ 36 Table of Contents I tem 2. Properties.
Risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking and other technology-based products and services by us and our customers. ‎ 35 Table of Contents I tem 2. Properties.
Even securities issued by governmental agencies and entities may entail risk depending on political and economic changes. Regardless of the level of credit risk, all investment securities are subject to changes in market value due to changing interest rates, implied credit spreads and credit ratings. ‎ 34 Table of Contents We are at risk of increased losses from fraud.
Even securities issued by governmental agencies and entities may entail risk depending on political and economic changes. Regardless of the level of credit risk, all investment securities are subject to changes in market value due to changing interest rates, implied credit spreads and credit ratings. ‎ 33 Table of Contents We are at risk of increased losses from fraud.
Based on these criteria, the Company determined as of December 31, 2023 that no valuation allowance was required against the net deferred tax asset. In 2012, a recapitalization program through the sale of $22.5 million in common stock improved the capital levels of CFBank and provided working capital for the Holding Company.
Based on these criteria, the Company determined as of December 31, 2024 that no valuation allowance was required against the net deferred tax asset. In 2012, a recapitalization program through the sale of $22.5 million in common stock improved the capital levels of CFBank and provided working capital for the Holding Company.
We are not a party to any pending legal proceeding that management believes would have a material adverse effect on our financial condition or operations, if decided adversely to us. ‎ 37 Table of Contents It em 4. Mine Safety Disclosures. Not Applicable PA RT II It em 5.
We are not a party to any pending legal proceeding that management believes would have a material adverse effect on our financial condition or operations, if decided adversely to us. ‎ 36 Table of Contents It em 4. Mine Safety Disclosures. Not Applicable PA RT II It em 5.
Under the Small Business Job Protection Act of 1996, if CFBank makes “non-dividend distributions” to the Company, 23 Table of Contents such distributions will be considered to have been made from CFBank’s unrecaptured tax bad debt reserves (including the balance of its reserves as of December 31, 1987) to the extent thereof, and then from CFBank’s supplemental reserve for losses on loans, to the extent thereof, and an amount based on the amount distributed (but not in excess of the amount of such reserves) will be included in CFBank’s taxable income.
Under the Small Business Job Protection Act of 1996, if CFBank makes “non-dividend distributions” to the Company, such distributions will be considered to have been made from CFBank’s unrecaptured tax bad debt reserves (including the balance of its reserves as of December 31, 1987) to the extent thereof, and then from CFBank’s supplemental reserve for losses on loans, to the extent thereof, and an amount based on the amount distributed (but not in excess of the amount of such reserves) will be included in CFBank’s taxable income.
Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would have totaled $473,000 at year-end 2023. However, if CFBank were wholly or partially liquidated or otherwise ceases to be a bank, or if tax laws were to change, this amount would have to be recaptured and a tax liability recorded.
Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would have totaled $473,000 at year-end 2024. However, if CFBank were wholly or partially liquidated or otherwise ceases to be a bank, or if tax laws were to change, this amount would have to be recaptured and a tax liability recorded.
The Financial Crimes Enforcement Network (also known as FinCEN), a unit of the U.S. Treasury Department that administers the BSA, is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with the federal bank regulatory agencies, as well as the U.S.
The Financial Crimes Enforcement Network (also known as FinCEN), a unit of the U.S. Treasury Department that 31 Table of Contents administers the BSA, is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with the federal bank regulatory agencies, as well as the U.S.
While we maintain 29 Table of Contents specific "cyber" insurance coverage, which would apply in the event of various breach scenarios, the amount of coverage may not be adequate in any particular case. Furthermore, because cyber threat scenarios are inherently difficult to predict and can take many forms, some breaches may not be covered under our cyber insurance coverage.
While we maintain specific "cyber" insurance coverage, which would apply in the event of various breach scenarios, the amount of coverage may not be adequate in any particular case. Furthermore, because cyber threat scenarios are inherently difficult to predict and can take many forms, some breaches may not be covered under our cyber insurance coverage.
Our success depends on the general economic conditions of these areas, particularly given that a significant portion of our lending relates to real estate located in these regions. Therefore, adverse changes in the economic conditions in these areas could adversely impact our earnings and cash flows. Changing interest rates may decrease our earnings and asset values.
Our success depends on the general economic conditions of these areas, particularly given that a significant portion of our lending relates to real estate located in these regions. Therefore, adverse changes in the economic conditions in these areas could 24 Table of Contents adversely impact our earnings and cash flows. Changing interest rates may decrease our earnings and asset values.
In addition, as new and more complex derivative products 30 Table of Contents are created, covering a wider array of underlying credit and other instruments, disputes about the terms of the underlying contracts could arise, which could impair our ability to effectively manage our risk exposures from these products and subject us to increased costs.
In addition, as new and more complex derivative products are created, covering a wider array of underlying credit and other instruments, disputes about the terms of the underlying contracts could arise, which could impair our ability to effectively manage our risk exposures from these products and subject us to increased costs.
Item 1C. “Cybersecurity” in Part I of this Form 10-K . These SEC rules, and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations. 22 Table of Contents State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations.
Item 1C. “Cybersecurity” in Part I of this Form 10-K . These SEC rules, and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations. State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations.
For these reasons, our common stock should not be viewed as a short-term investment. ‎ 33 Table of Contents The market price of our Common Stock may be subject to fluctuations and volatility.
For these reasons, our common stock should not be viewed as a short-term investment. 32 Table of Contents The market price of our Common Stock may be subject to fluctuations and volatility.
We may be subject to disruptions of our operating systems arising from events that are wholly or partially beyond our control, which may include, for example, computer viruses, cyber-attacks, spikes in transaction volume and/or customer activity, electrical or 28 Table of Contents telecommunications outages, or natural disasters.
We may be subject to disruptions of our operating systems arising from events that are wholly or partially beyond our control, which may include, for example, computer viruses, cyber-attacks, spikes in transaction volume and/or customer activity, electrical or telecommunications outages, or natural disasters.
Even the reduction of regulatory restrictions could have an adverse effect on us if such lessening of restrictions increases competition within our industry or market areas. We are subject to limitations and conditions on certain activities as a result of our “Needs to Improve” CRA rating.
Even the reduction of regulatory restrictions could have an adverse effect on us if such 30 Table of Contents lessening of restrictions increases competition within our industry or market areas. We are subject to limitations and conditions on certain activities as a result of our “Needs to Improve” CRA rating.
If we are unable to manage our loan growth and/or expanded operations, we may experience compliance and operational problems, have to slow the pace of growth, or have to incur additional expenditures beyond current projections to support such 27 Table of Contents growth, any one of which could materially and adversely affect us.
If we are unable to manage our loan growth and/or expanded operations, we may experience compliance and operational problems, have to slow the pace of growth, or have to incur additional expenditures beyond current projections to support such growth, any one of which could materially and adversely affect us.
Credit risk is one of our most significant risks, particularly given the high percentage of our assets represented directly or indirectly by loans, and the importance of lending to our overall business. We manage credit risk by assessing and monitoring the creditworthiness of our customers and counterparties and by diversifying our loan portfolio. Many factors impact credit risk.
Credit risk is one of our most significant risks, particularly given the high percentage of our assets represented directly or indirectly by loans, and the importance of lending to our overall business. We manage credit risk by assessing and monitoring the creditworthiness of our customers and counterparties and by diversifying our loan portfolio.
We conducted our business through seven branch offices located in Franklin, Cuyahoga, Delaware, Hamilton and Summit counties in Ohio and one branch office located in Marion County, Indiana as of December 31, 2023. The net book value of the Company’s properties totaled $2.2 million at December 31, 2023.
We conducted our business through seven branch offices located in Franklin, Cuyahoga, Delaware, Hamilton and Summit counties in Ohio and one branch office located in Marion County, Indiana as of December 31, 2024. The net book value of the Company’s properties totaled $2.3 million at December 31, 2024.
CECL will result in earlier recognition of credit losses and requires consideration of not only past and current events but also reasonable and supportable forecasts that affect collectability. The Company was required to comply with the new standard beginning January 1, 2023.
CECL results in earlier recognition of credit losses and requires consideration of not only past and current events but also reasonable and supportable forecasts that affect collectability. The Company was required to comply with the new standard beginning January 1, 2023.
The Company employs significant resources, processes and technology to manage and maintain cybersecurity controls. The Company employs a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats.
The Company employs significant resources, processes and technology to manage and maintain 22 Table of Contents cybersecurity controls. The Company employs a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats.
Consequently, an adverse development involving one or more loans or credit relationships can expose us to significantly greater risk of loss compared to an adverse development involving a single-family residential mortgage loan. 26 Table of Contents Our adjustable-rate loans may expose us to increased lending risks.
Consequently, an adverse development involving one or more loans or credit relationships can expose us to significantly greater risk of loss compared to an adverse development involving a single-family residential mortgage loan. Our adjustable-rate loans may expose us to increased lending risks.
In recent years, some banks have experienced denial of service attacks in which individuals or organizations flood the bank's website with extraordinarily high volumes of traffic, with the goal and effect of disrupting the ability of the bank to process transactions.
In recent years, some banks have experienced denial of service attacks in which individuals or 28 Table of Contents organizations flood the bank's website with extraordinarily high volumes of traffic, with the goal and effect of disrupting the ability of the bank to process transactions.
A borrower’s ability to repay a loan can be adversely affected by individual factors, such as business performance, job losses or health issues. A weak or deteriorating economy and changes in the United States or global markets also could adversely impact the ability of our borrowers to repay outstanding loans.
Many factors impact credit risk. 26 Table of Contents A borrower’s ability to repay a loan can be adversely affected by individual factors, such as business performance, job losses or health issues. A weak or deteriorating economy and changes in the United States or global markets also could adversely impact the ability of our borrowers to repay outstanding loans.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. (a) Market and Dividend Information The (voting) common stock of CF Bankshares Inc. trades on the Nasdaq® Capital Market under the symbol “CFBK.” As of December 31, 2023, there were 5,284,860 shares of (voting) common stock outstanding and held by approximately 327 registered shareholders of record.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. (a) Market and Dividend Information The (voting) common stock of CF Bankshares Inc. trades on the Nasdaq® Capital Market under the symbol “CFBK.” As of December 31, 2024, there were 5,141,385 shares of (voting) common stock outstanding and held by approximately 303 registered shareholders of record.
Since January 1, 2016, our total net loans have grown by $1.3 billion, or 389.5%, and our total assets have grown by $1.6 billion, or 372.0%. Our continued growth may place significant demands on our operations and management, and our future operating results depend to a large extent on our ability to successfully manage our growth.
Since January 1, 2016, our total net loans have grown by $1.4 billion, or 397.5%, and our total assets have grown by $1.6 billion, or 373.6%. Our continued growth may place significant demands on our operations and management, and our future operating results depend to a large extent on our ability to successfully manage our growth.
As of December 31, 2023, the Holding Company had a total of $530,000 of cash at the Holding Company level. In the event that CFBank is unable to pay dividends to the Holding Company, the Holding Company may not be able to service its debt, pay its other obligations or pay dividends on its outstanding stock.
As of December 31, 2024, the Holding Company had a total of $1.0 million of cash at the Holding Company level. In the event that CFBank is unable to pay dividends to the Holding Company, the Holding Company may not be able to service its debt, pay its other obligations or pay dividends on its outstanding stock.
Indiana Taxation The consolidated organization is subject to the Indiana Financial Institution Tax (“Indiana FIT”). The Indiana FIT is a franchise tax measured by a taxpayer's apportioned income imposed on corporations for the privilege of exercising their franchise or transacting the business of a financial institution in Indiana.
The Indiana FIT is a franchise tax measured by a taxpayer's apportioned income imposed on corporations for the privilege of exercising their franchise or transacting the business of a financial institution in Indiana.
We [regularly] engage certified and reputable consultants and auditing firms to evaluate the maturity and effectiveness of our security, including testing the design and operational effectiveness of controls, penetration testing, engaging in independent reviews of policies and standards, and consulting on best practices.
We regularly engage certified and reputable consultants and auditing firms to evaluate the maturity and effectiveness of our security, including testing the design and operational effectiveness of controls, penetration testing, engaging in independent reviews of policies and standards, and consulting on best practices. CFBank also has a third-party risk management program.
Moreover, our market activities are concentrated in the following counties: Franklin County through our office in Columbus, Ohio (formerly located in Worthington, Ohio until March 1, 2023); Delaware County through our Polaris office in Columbus, Ohio; Cuyahoga County through our office in Woodmere, Ohio and our Ohio City office in Cleveland, Ohio; Hamilton County through our offices in Blue Ash, Ohio and our Red Bank office in Cincinnati, Ohio; Summit County through our office in Fairlawn, Ohio; and Marion County, Indiana through our office in Indianapolis .
Moreover, our market activities are concentrated in the following counties: Franklin County through our office in Columbus, Ohio; Delaware County through our Polaris office in Columbus, Ohio; Cuyahoga County through our office in Orange Village, Ohio and our Ohio City office in Cleveland, Ohio; Hamilton County through our offices in Blue Ash, Ohio and our Red Bank office in Cincinnati, Ohio; Summit County through our office in Fairlawn, Ohio; and Marion County, Indiana through our office in Indianapolis .
If the costs of future bank failures increase, the deposit insurance premiums required to be paid by 31 Table of Contents CFBank may also increase. The FDIC recently adopted rules revising its assessments in a manner benefiting banks, such as CFBank, with assets totaling less than $10 billion.
If the costs of future bank failures increase, the deposit insurance premiums required to be paid by CFBank may also increase. The FDIC recently adopted rules revising its assessments in a manner benefiting banks, such as CFBank, with assets totaling less than $10 billion. There can be no assurance, however, that assessments will not be changed in the future.
Non-dividend distributions include distributions in excess of CFBank’s current and accumulated earnings and profits, as calculated for federal income tax purposes, distributions in redemption of stock, and distributions in partial or complete liquidation. Dividends paid out of CFBank’s current or accumulated earnings and profits will not be so included in CFBank’s taxable income.
Non-dividend distributions include distributions in excess of CFBank’s current and accumulated earnings and profits, as calculated for federal income tax purposes, distributions in redemption of stock, and distributions in partial or complete liquidation.
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for the Company. 32 Table of Contents Risks Related to our Capital and Capital Stock We are a holding company and depend on our subsidiary bank for dividends.
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for the Company. Risks Related to our Capital and Capital Stock We are a holding company and depend on our subsidiary bank for dividends. The Holding Company is a legal entity separate and distinct from its subsidiaries and affiliates.
(c) The following table provides information concerning purchases of the Holding Company’s shares of common stock made by or on behalf of the Company or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended, during the three months ended December 31, 2023.
(c) There were no purchases of the Holding Company’s shares of common stock made by or on behalf of the Company or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended, during the three months ended December 31, 2024. Ite m 6. [Reserved] ‎ 37 Table of Contents
Certain of these third parties may have limited indemnification obligations to us in the event of a cybersecurity event or operational disruption, or may not have the financial capacity to satisfy their indemnification obligations.
Further, the operations of our third-party vendors could fail or otherwise become delayed. Certain of these third parties may have limited indemnification obligations to us in the event of a cybersecurity event or operational disruption, or may not have the financial capacity to satisfy their indemnification obligations.
There can be no assurance, however, that assessments will not be changed in the future. We may be the subject of litigation which could result in legal liability and damage to our business and reputation. From time to time, we may be subject to claims or legal action from customers, employees or others.
We may be the subject of litigation which could result in legal liability and damage to our business and reputation. From time to time, we may be subject to claims or legal action from customers, employees or others.
Noncompliance with the Bank Secrecy Act (BSA) and other anti-money laundering statutes and regulations could cause a material financial loss. The BSA and the Patriot Act contain anti-money laundering and financial transparency provisions intended to detect and prevent the use of the U.S. financial system for money laundering and terrorist financing activities.
The BSA and the Patriot Act contain anti-money laundering and financial transparency provisions intended to detect and prevent the use of the U.S. financial system for money laundering and terrorist financing activities.
Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the ability to impose restrictions on the operation of an institution and the ability to determine the adequacy of an institution’s allowance for loan losses.
The impact of any changes to laws and regulations or other actions by regulatory agencies could adversely affect our business. Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the ability to impose restrictions on the operation of an institution and the ability to determine the adequacy of an institution’s allowance for loan losses.
Locations Administrative Office (leased facility): 4960 East Dublin Granville Road, Suite 400 Columbus, Ohio 43081 Branch Offices: New Albany Branch (leased facility) 4960 East Dublin Granville Road, Suite 400 Columbus, Ohio 43081 Polaris Branch (leased facility) 1942 Polaris Parkway Columbus, Ohio 43240 Eton Branch (leased facility) 28879 Chagrin Blvd. Woodmere, Ohio 44122 Ohio City Branch (leased facility) 2715 Detroit Ave.
Locations Administrative Office (leased facility): 4960 East Dublin Granville Road, Suite 400 Columbus, Ohio 43081 Branch Offices: New Albany Branch (leased facility) 4960 East Dublin Granville Road, Suite 400 Columbus, Ohio 43081 Polaris Branch (leased facility) 1942 Polaris Parkway Columbus, Ohio 43240 Pinecrest Branch (leased facility) 100 Park Ave, Suite 420.
CFBank also leases its branch offices in Columbus, Ohio, Cleveland, Ohio, Woodmere, Ohio, Fairlawn, Ohio, Blue Ash, Ohio, Cincinnati, Ohio and its loan production office in Columbus. See Note 8 in the accompanying Notes to Consolidated Financial Statements for further discussion. In March 2023, the administrative office and Worthington branch moved to a new location in Columbus.
CFBank also leases its branch offices in Columbus, Ohio, Cleveland, Ohio, Orange Village, Ohio, Fairlawn, Ohio, Blue Ash, Ohio, Cincinnati, Ohio. See Note 8 in the accompanying Notes to Consolidated Financial Statements for further discussion.
Ohio Taxation The consolidated organization is subject to the Ohio Financial Institutions Tax (“Ohio FIT”). The Ohio FIT is a business privilege tax for financial institutions doing business or domiciled in the State of Ohio. The three-tier structure charges financial institutions based on total capital at the prior calendar year-end based on regulatory reporting requirements.
The three-tier structure charges financial institutions based on total capital at the prior calendar year-end based on regulatory reporting requirements. Indiana Taxation The consolidated organization is subject to the Indiana Financial Institution Tax (“Indiana FIT”).
As of December 31, 2023, the Company also had an aggregate of 1,260,700 shares of non-voting common stock outstanding which were held by two shareholders of record. There was $0.23 per share in dividends declared or paid on our common stock during 2023.
As of December 31, 2024, the Company also had an aggregate of 1,260,700 shares of non-voting common stock outstanding which were held by two shareholders of record.
Disruptions in U.S. and global financial markets, and changes in oil production and supply in the Middle East and Russia, also affect the economy and stock prices in the U.S., which can affect our earnings and/or capital, as well as the ability of our customers to repay loans. ‎ 24 Table of Contents Because we have a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure.
Disruptions in U.S. and global financial markets, and changes in oil production and supply in the Middle East and Russia, also affect the economy and stock prices in the U.S., which can affect our earnings and/or capital, as well as the ability of our customers to repay loans.
Our competitors with greater resources may have a marketplace advantage enabling them to maintain numerous banking locations and mount extensive promotional and advertising campaigns. Additionally, financial intermediaries not subject to bank regulatory restrictions and banks and other financial institutions with larger capitalization have larger lending limits and are thereby able to serve the credit needs of larger clients.
Additionally, financial intermediaries not subject to bank regulatory restrictions and banks and other financial institutions with larger capitalization have larger lending limits and are thereby able to serve the credit needs of larger clients.
On June 16, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13 “Financial Instruments - Credit Losses”, which replaces the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (“CECL”) model, which we adopted effective January 1, 2023.
In addition, bank regulators periodically review our allowance for credit losses as part of their examination process and may require management to increase the allowance or recognize further loan charge-offs based on judgments different than those of management. 25 Table of Contents On June 16, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13 “Financial Instruments - Credit Losses”, which replaces the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (“CECL”) model, which we adopted effective January 1, 2023.
However, any significant, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations. A transition away from LIBOR as a reference rate for financial contracts could negatively affect our income and expenses and the value of various financial contracts.
However, any significant, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations. Defaults by other financial institutions could adversely affect our business, earnings and financial condition.
Like many other community banks, CFBank also relies, in significant part, on a single vendor for the systems which allow CFBank to provide banking services to CFBank’s customers, for which the systems are maintained on CFBank’s behalf by this single vendor.
Like many other community banks, CFBank also relies, in significant part, on a single vendor for the systems which allow CFBank to provide banking services to CFBank’s customers, for which the systems are maintained on CFBank’s behalf by this single vendor. 29 Table of Contents One or more of the third parties utilized by us may experience a cybersecurity event or operational disruption and, if any such event does occur, it may not be adequately addressed, either operationally or financially, by such third party.
Prior to July 2023, all promissory notes and swap contracts were transitioned away from LIBOR. ‎ 25 Table of Contents Defaults by other financial institutions could adversely affect our business, earnings and financial condition. Many financial institutions and their related operations are closely intertwined, and the soundness of such financial institutions may, to some degree, be interdependent.
Many financial institutions and their related operations are closely intertwined, and the soundness of such financial institutions may, to some degree, be interdependent.
Removed
Some of these factors include: inflation; recession; unemployment; money supply; international disorders; and instability in domestic and foreign financial markets.
Added
Dividends paid out of CFBank’s current or accumulated earnings and profits will not be so included in CFBank’s taxable income. 23 Table of Contents Ohio Taxation The consolidated organization is subject to the Ohio Financial Institutions Tax (“Ohio FIT”). The Ohio FIT is a business privilege tax for financial institutions doing business or domiciled in the State of Ohio.
Removed
LIBOR has been used extensively in the U.S. and globally as a benchmark for various commercial and financial contracts, including adjustable rate mortgages, corporate debt, interest rate swaps and other derivatives. LIBOR is set based on interest rate information reported by certain banks.
Added
Because we have a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure.
Removed
In the U.S., the Alternative Reference Rates Committee (“ARRC”) has recommended the use of a Secured Overnight Financing Rate (“SOFR”) as the set of alternative U.S. dollar reference . SOFR is different from LIBOR in that it is a backward looking secured rate rather than a forward looking unsecured rate.
Added
Our competitors with greater resources may have a marketplace advantage enabling them to maintain numerous 27 Table of Contents banking locations and mount extensive promotional and advertising campaigns.
Removed
These differences could lead to a greater disconnect between our costs to raise funds for SOFR as compared to LIBOR. For cash products and loans, ARRC has also recommended Term SOFR, which is a forward looking SOFR based on SOFR futures and may in part reduce differences between SOFR and LIBOR.
Added
As a result of the adoption of CECL, credit loss allowances may increase, which would decrease retained earnings and regulatory capital. Noncompliance with the Bank Secrecy Act (BSA) and other anti-money laundering statutes and regulations could cause a material financial loss.
Removed
There are operational issues which may create a delay in the transition to SOFR or other substitute indices, leading to uncertainty across the industry. These consequences cannot be entirely predicted and could have an adverse impact on the market value for or value of LIBOR-linked securities, loans, and other financial obligations or extensions of credit.
Added
Management performs periodic reviews of third-party vendors on their cybersecurity and business continuity capabilities to ensure they meet contractual requirements and satisfactory audit testing results. Vendors not meeting CFBank’s risk requirements are notified to make improvements and, if the vendors cannot mitigate the identified risks, CFBank management looks to identify alternative vendors. Vendor risk assessments are retained by CFBank.
Removed
The Company's primary exposure to LIBOR was related to its promissory notes with borrowers, swap contracts with clients and offsetting swap contracts with third parties related to the swap contracts with clients.
Added
Orange Village, Ohio 44122 Ohio City Branch (leased facility) 2715 Detroit Ave.
Removed
In addition, bank regulators periodically review our allowance for credit losses as part of their examination process and may require management to increase the allowance or recognize further loan charge-offs based on judgments different than those of management.
Added
There was $0.25 per share in dividends declared and paid on our common stock during 2024, and equivalent dividends were declared and paid on our Series D Preferred Stock in the quarters ended June 30, September 30, and December 31, 2024.
Removed
One or more of the third parties utilized by us may experience a cybersecurity event or operational disruption and, if any such event does occur, it may not be adequately addressed, either operationally or financially, by such third party. Further, the operations of our third-party vendors could fail or otherwise become delayed.
Removed
Many of these derivative instruments are individually negotiated and non-standardized, which can make exiting, transferring or settling the position difficult. We carry borrowings which contain embedded derivatives. These borrowing arrangements require that we deliver underlying securities to the counterparty as collateral.
Removed
While such changes are generally intended to lessen the regulatory burden on financial institutions, the impact of any changes to laws and regulations or other actions by regulatory agencies could adversely affect our business.
Removed
As a result of the adoption of CECL, credit loss allowances may increase, which would decrease retained earnings and regulatory capital. The federal banking regulators have adopted a regulation that allows banks to phase in the day-one impact of CECL on regulatory capital over three years, which the Company did not elect to do.
Removed
The Holding Company is a legal entity separate and distinct from its subsidiaries and affiliates.
Removed
Period Total number of common shares purchased Average price paid per common share Total number of common shares purchased as part of publicly announced plans or programs (1) Maximum number of common shares that may yet be purchased under the plans or programs October 1, 2023 through October 31, 2023 - - - 250,000 November 1, 2023 through November 30, 2023 - - - 250,000 December 1, 2023 through December 31, 2023 9,503 18.59 9,503 240,497 Total 9,503 $ 18.59 9,503 (1) On July 5, 2023, the Company’s Board of Directors authorized a new stock repurchase program pursuant to which the Company may repurchase up to 250,000 shares of the Company’s common stock on or before June 30, 2024.
Removed
Ite m 6. [Reserved] ‎ 38 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

98 edited+11 added−31 removed81 unchanged
Net interest income is a significant component of net income, and consists of the difference between interest income generated on interest-earning assets and interest expense incurred on interest-bearing liabilities. Net interest income is primarily affected by the volumes, interest rates and composition of interest-earning assets and interest-bearing liabilities.
Net interest income is a significant component of net income, and consists of the difference between interest income generated on interest-earning assets and interest expense incurred on interest-bearing liabilities. Net interest income is primarily affected by the volumes, interest rates and composition of interest-earning assets and interest-bearing liabilities.
The tables below titled “Average Balances, Interest Rates and Yields” and “Rate/Volume Analysis of Net Interest Income” provide important information on factors impacting net interest income and should be read in conjunction with this discussion of net interest income.
The tables below titled “Average Balances, Interest Rates and Yields” and “Rate/Volume Analysis of Net Interest Income” provide important information on factors impacting net interest income and should be read in conjunction with this discussion of net interest income.
The qualitative impact of the new accounting standard is still directed by many of the same factors that impacted the previous methodology for computing the allowance for loan and lease losses (ALLL) including, but not limited to, economic conditions, quality and experience of staff, changes in the value of collateral, concentrations of credit in loan types or industries and changes to lending policies.
The qualitative impact of the accounting standard is still directed by many of the same factors that impacted the previous methodology for computing the allowance for loan and lease losses (ALLL) including, but not limited to, economic conditions, quality and experience of staff, changes in the value of collateral, concentrations of credit in loan types or industries and changes to lending policies.
Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied historically are still permitted, although the inputs to those techniques will reflect the full amount of expected credit losses. Organizations continue to use judgment to determine which loss estimation method is appropriate for their circumstances.
Financial institutions and other organizations now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied historically are still permitted, although the inputs to those techniques reflect the full amount of expected credit losses. Organizations continue to use judgment to determine which loss estimation method is appropriate for their circumstances.
CECL provides for an "expected loss" model for measuring credit losses, which encompasses allowances for losses expected to be incurred over the life of the portfolio. The new CECL model requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.
CECL provides for an "expected loss" model for measuring credit losses, which encompasses allowances for losses expected to be incurred over the life of the portfolio. The CECL model requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.
The various risks that may be considered in making qualitative adjustments include, among other things, the impact of (i) changes in economic conditions, (ii) changes in the nature and volume of the loan portfolio, (iii) changes in the existence, growth and effect of any concentrations in credit, (iv) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries, (v) changes in the quality of the credit review function, (vi) changes in the experience, ability and depth of lending management and staff, (vii) changes in the volume and severity of past due and adversely classified loans and the volume of non- 42 Table of Contents accrual loans, (viii) changes in the value of underlying collateral for collateral-dependent loans, and (ix) other environmental factors such as regulatory, legal and technological considerations, as well as competition.
The various risks that may be considered in making qualitative adjustments include, among other things, the impact of (i) changes in economic conditions, (ii) changes in the nature and volume of the loan portfolio, (iii) changes in the existence, growth and effect of any concentrations in credit, (iv) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries, (v) changes in the quality of the credit review function, (vi) changes in the experience, ability and depth of lending management and staff, (vii) changes in the volume and severity of past due and adversely classified loans and the volume of non-accrual loans, (viii) changes in the value of underlying collateral for collateral-dependent loans, and (ix) other environmental factors such as regulatory, legal and technological considerations, as well as competition.
We believe the ACL - Loans is adequate to absorb current expected credit losses in the loan portfolio as of December 31, 2023; however, future additions to the allowance may be necessary based on factors including, but not limited to, deterioration in client business performance, recessionary economic conditions, declines in borrowers’ cash flows and market conditions which result in lower real estate values.
We believe the ACL - Loans is adequate to absorb current expected credit losses in the loan portfolio as of December 31, 2024; however, future additions to the allowance may be necessary based on factors including, but not limited to, deterioration in client business performance, recessionary economic conditions, declines in borrowers’ cash flows and market conditions which result in lower real estate values.
(9) Nonperforming assets consist of nonperforming loans and foreclosed assets. n/m - not meaningful ‎ 40 Table of Contents Bus iness Overview The Holding Company is a financial holding company that owns 100% of the stock of CFBank, which was formed in Ohio in 1892 and converted from a federal savings association to a national bank on December 1, 2016.
(9) Nonperforming assets consist of nonperforming loans and foreclosed assets. n/m - not meaningful ‎ 39 Table of Contents Bus iness Overview The Holding Company is a financial holding company that owns 100% of the stock of CFBank, which was formed in Ohio in 1892 and converted from a federal savings association to a national bank on December 1, 2016.
CFBank had $65.0 million of availability in unused lines of credit with two commercial banks at December 31, 2023 and December 31, 2022. Deposits are obtained predominantly from the markets in which CFBank’s offices are located. We rely primarily on a willingness to pay market-competitive interest rates to attract and retain retail deposits.
CFBank had $65.0 million of availability in unused lines of credit with two commercial banks at December 31, 2024 and December 31, 2023. Deposits are obtained predominantly from the markets in which CFBank’s offices are located. We rely primarily on a willingness to pay market-competitive interest rates to attract and retain retail deposits.
Based on these criteria, the Company determined as of December 31, 2023 that no valuation allowance was required against the net deferred tax asset. The Company records income tax expense based on the federal statutory rate adjusted for the effect of other items such as low income housing credits, historic tax credits, bank owned life insurance and other miscellaneous items.
Based on these criteria, the Company determined as of December 31, 2024 that no valuation allowance was required against the net deferred tax asset. The Company records income tax expense based on the federal statutory rate adjusted for the effect of other items such as low income housing credits, historic tax credits, bank owned life insurance and other miscellaneous items.
Federal income tax laws provided deductions, totaling $2.3 million, for thrift bad debt reserves established before 1988. Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would have totaled $473,000 at year-end 2023.
Federal income tax laws provided deductions, totaling $2.3 million, for thrift bad debt reserves established before 1988. Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would have totaled $473,000 at year-end 2024.
The Company records income tax expense based on the federal statutory rate adjusted for the effect of other items such as low income housing credits, historic tax credits, bank owned life insurance and other miscellaneous items. ‎ 49 Table of Contents Average Balances, Interest Rates and Yields.
The Company records income tax expense based on the federal statutory rate adjusted for the effect of other items such as low income housing credits, historic tax credits, bank owned life insurance and other miscellaneous items. ‎ 47 Table of Contents Average Balances, Interest Rates and Yields.
There were no foreclosed assets at December 31, 2023 or December 31, 2022. The level of foreclosed assets and charges to foreclosed assets expense may change in the future in connection with workout efforts related to foreclosed assets, nonperforming loans and other loans with credit issues . Premises and equipment.
There were no foreclosed assets at December 31, 2024 or December 31, 2023. The level of foreclosed assets and charges to foreclosed assets expense may change in the future in connection with workout efforts related to foreclosed assets, nonperforming loans and other loans with credit issues . Premises and equipment.
When determining the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded as a benefit, the 47 Table of Contents Company conducts a regular assessment of all available information. This information includes, but is not limited to, taxable income in prior periods, projected future income and projected future reversals of deferred tax items.
When determining the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded as a benefit, the Company conducts a regular assessment of all available information. This information includes, but is not limited to, taxable income in prior periods, projected future income and projected future reversals of deferred tax items.
(6) The efficiency ratio equals noninterest expense (excluding amortization of intangibles and foreclosed asset writedowns) divided by net interest income plus noninterest income (excluding gains or losses on securities transactions). (7) Regulatory capital ratios of CFBank. (8) Nonperforming loans consist of nonaccrual loans and other loans 90 days or more past due.
(6) The efficiency ratio equals noninterest expense (excluding amortization of intangibles and foreclosed asset write-downs) divided by net interest income plus noninterest income (excluding gains or losses on securities transactions). (7) Regulatory capital ratios of CFBank. (8) Nonperforming loans consist of nonaccrual loans and other loans 90 days or more past due.
(3) Average balance is computed using the recorded investment in loans net of the ACL - Loans and includes nonperforming loans. 50 Table of Contents Rate/Volume Analysis of Net Interest Income. The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities.
(3) Average balance is computed using the recorded investment in loans net of the ACL – Loans/ALLL and includes nonperforming loans. 48 Table of Contents Rate/Volume Analysis of Net Interest Income. The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities.
All lending activity involves risk of loss. Certain types of loans, such as option adjustable-rate mortgage (“ARM”) products, junior lien mortgages, high loan-to-value ratio mortgages, interest only loans, subprime loans and loans with initial teaser rates, can have a greater risk of non-collection than other loans. CFBank has not engaged in subprime lending or used option ARM products.
Certain types of loans, such as option adjustable-rate mortgage (“ARM”) products, junior lien mortgages, high loan-to-value ratio mortgages, interest only loans, subprime loans and loans with initial teaser rates, can have a greater risk of non-collection than other loans. CFBank has not engaged in subprime lending or used option ARM products.
CONDENSE D CONSOLIDATED FINANCIAL DATA The following information is derived from and should be read in conjunction with our audited Consolidated Financial Statements, the related Notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Form 10-K.
CONDENSE D CONSOLIDATED FINANCIAL DATA The following information is derived from and should be read in conjunction with our audited Consolidated Financial Statements, the related Notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K.
Management continues to diligently monitor credit quality in the existing portfolio and analyze potential loan opportunities carefully in order to manage credit risk. An increase in 45 Table of Contents loan losses could occur if economic conditions and factors which affect credit quality, real estate values and general business conditions worsen or do not improve. Foreclosed assets.
Management continues to diligently monitor credit quality in the existing portfolio and analyze potential loan opportunities carefully in order to manage credit risk. An increase in loan losses could occur if economic conditions and factors which affect credit quality, real estate values and general business conditions worsen or do not improve. Foreclosed assets.
The following discussion details the critical accounting policies and the nature of the estimates made by management. Determination of the allowance for credit losses on loans (ACL – Loans) .
The following discussion details the critical accounting policy and the nature of the estimates made by management. Determination of the allowance for credit losses on loans (ACL – Loans) .
In addition to liquid assets, we have other sources of liquidity available including, but not limited to, access to advances from the FHLB and borrowings from the FRB and our commercial bank lines of credit. 51 Table of Contents The following table summarizes CFBank’s cash available from liquid assets and borrowing capacity at December 31, 2023 and 2022.
In addition to liquid assets, we have other sources of liquidity available including, but not limited to, access to advances from the FHLB and borrowings from the FRB and our commercial bank lines of credit. 49 Table of Contents The following table summarizes CFBank’s cash available from liquid assets and borrowing capacity at December 31, 2024 and 2023.
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires a new Current Expected Credit Losses (“CECL”) methodology that replaces the previous "incurred loss" model for measuring credit losses, which encompassed allowances for current known and inherent losses within the portfolio.
In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires a new Current Expected Credit Losses (“CECL”) methodology that replaced the previous "incurred loss" model for measuring credit losses, which encompassed allowances for current known and inherent losses within the portfolio.
The Holding Company has a $35.0 million facility with a third-party bank. The credit facility is revolving until May 21, 2024, at which time any then-outstanding balance is converted to a 10-year term note on a graduated 10-year amortization.
The Holding Company has a $35.0 million credit facility with a third-party bank. The credit facility was revolving until May 21, 2024, at which time the outstanding balance was converted to a 10-year term note on a graduated 10-year amortization.
Upon implementation of ASU 2016-13, the expected loss estimate is made up of a historical lookback of actual losses applied over the life of the loan portfolio and adjusted for qualitative factors and forecasted losses based on economic and forward-looking data applied over a reasonable and supportable forecast period.
The expected loss estimate is made up of a historical lookback of actual losses applied over the life of the loan portfolio and adjusted for qualitative factors and forecasted losses based on economic and forward-looking data applied over a reasonable and supportable forecast period.
Imp act of Inflation The financial statements and related data presented herein have been prepared in accordance with U.S. generally accepted accounting principles, which presently require us to measure financial position and results of operations primarily in terms of historical dollars. Changes in the relative value of money due to inflation are generally not considered.
Imp act of Inflation The financial statements and related data presented herein have been prepared in accordance with GAAP, which presently require us to measure financial position and results of operations primarily in terms of historical dollars. Changes in the relative value of money due to inflation are generally not considered.
Co mparison of Results of Operations for 2023 and 2022 General. Net income for the year ended December 31, 2023 totaled $16.9 million (or $2.63 per diluted common share) and decreased $1.3 million, or 6.8%, compared to net income of $18.2 million (or $2.78 per diluted common share) for the year ended December 31, 46 Table of Contents 2022.
Comparison of Results of Operations for 2023 and 2022 General. Net income for the year ended December 31, 2023 totaled $16.9 million (or $2.63 per diluted common share) and decreased $1.3 million, or 6.8%, compared to net income of $18.2 million (or $2.78 per diluted common share) for the year ended December 31, 2022.
The ratio of nonperforming loans to total loans was 0.33% at December 31, 2023 compared to 0.05% at December 31, 2022. The following table presents information regarding the number and balance of nonperforming loans at December 31, 2023 and December 31, 2022.
The ratio of nonperforming loans to total loans was 0.87% at December 31, 2024 compared to 0.33% at December 31, 2023. The following table presents information regarding the number and balance of nonperforming loans at December 31, 2024 and December 31, 2023.
The Holding Company has more limited sources of liquidity than CFBank. In general, in addition to its existing liquid assets, sources of liquidity include funds raised in the securities markets through debt or equity offerings, funds borrowed from third party banks or other lenders, dividends received from CFBank or the sale of assets.
In general, in addition to its existing liquid assets, sources of liquidity include funds raised in the securities markets through debt or equity offerings, funds borrowed from third party banks or other lenders, dividends received from CFBank or the sale of assets.
We believe that the judgments, estimates and assumptions used in the preparation of the consolidated financial statements were appropriate given the factual circumstances at the time. We have identified accounting policies that are critical accounting policies, and an understanding of these policies is necessary to understand our financial statements.
We believe that the judgments, estimates and assumptions used in the preparation of the Consolidated Financial Statements were appropriate given the factual circumstances at the time. We have identified the following accounting policy that it is the critical accounting policy, and an understanding of this policy is necessary to understand our financial statements.
At December 31, 2023 2022 2021 2020 2019 (Dollars in thousands) Selected Financial Condition Data: Total assets $ 2,058,615 $ 1,820,174 $ 1,495,589 $ 1,476,995 $ 880,545 Cash and cash equivalents 261,595 151,787 166,591 221,594 45,879 Securities available for sale 8,092 10,442 16,347 8,701 8,174 Equity securities 5,000 5,000 5,000 5,000 - Loans held for sale 1,849 580 27,988 283,165 135,711 Loans and leases, net (1) 1,694,133 1,572,255 1,214,149 895,344 663,303 Allowance for credit losses on loans and leases 16,865 16,062 15,508 17,022 7,138 Nonperforming assets 5,722 761 997 695 2,439 Foreclosed assets - - - - - Deposits 1,744,057 1,527,922 1,246,352 1,113,070 746,323 FHLB advances and other debt 109,995 109,461 89,727 214,426 29,017 Subordinated debentures 14,961 14,922 14,883 14,844 14,806 Total stockholders' equity 155,374 139,248 125,330 110,210 80,664 For the year ended December 31, 2023 2022 2021 2020 2019 (Dollars in thousands) Summary of Operations: Total interest income $ 108,279 $ 67,764 $ 52,348 $ 42,386 $ 35,104 Total interest expense 60,639 18,974 10,309 14,578 13,404 Net interest income 47,640 48,790 42,039 27,808 21,700 Provision for loan and lease losses 2,317 787 (1,600) 10,915 - Net interest income after provision for loan and lease losses 45,323 48,003 43,639 16,893 21,700 Noninterest income: Net gain on sale of loans 185 1,009 7,359 58,366 10,767 Other 3,846 2,201 4,281 1,627 953 Total noninterest income 4,031 3,210 11,640 59,993 11,720 Noninterest expense 28,369 28,621 32,461 40,603 21,379 Income before income taxes 20,985 22,592 22,818 36,283 12,041 Income tax expense 4,048 4,428 4,365 6,675 2,440 Net income $ 16,937 $ 18,164 $ 18,453 $ 29,608 $ 9,601 39 Table of Contents At or for the year ended December 31, 2023 2022 2021 2020 2019 (Dollars in thousands) Selected Financial Ratios and Other Data: Performance Ratios (2) Return on average assets 0.88% 1.11% 1.26% 2.59% 1.30% Return on average equity 11.46% 13.69% 15.58% 32.04% 17.57% Average yield on interest-earning assets (3) 5.89% 4.37% 3.79% 3.89% 4.98% Average rate paid on interest-bearing liabilities 3.99% 1.55% 0.95% 1.64% 2.38% Average interest rate spread (4) 1.90% 2.82% 2.84% 2.25% 2.60% Net interest margin, fully taxable equivalent (5) 2.59% 3.15% 3.04% 2.55% 3.08% Average interest-earning assets to interest bearing liabilities 120.70% 126.74% 127.13% 122.64% 124.90% Efficiency ratio (6) 54.90% 55.04% 60.47% 46.24% 63.97% Noninterest expenses to average assets 1.47% 1.76% 2.22% 3.55% 2.89% Common stock dividend payout ratio 8.75% 6.47% 4.69% 0.67% n/m Capital Ratios: (2) Equity to total assets at end of period 7.55% 7.65% 8.38% 7.46% 9.16% Average equity to average assets 7.66% 8.14% 8.11% 8.07% 7.39% Tier 1 (core) capital to adjusted total assets (Leverage ratio) (7) 9.76% 9.89% 11.29% 9.74% 10.58% Total capital to risk weighted assets (7) 13.30% 12.74% 14.02% 14.31% 12.96% Tier 1 (core) capital to risk weighted assets (7) 12.17% 11.65% 12.77% 13.05% 11.97% Common equity tier 1 capital to risk weighted assets (7) 12.17% 11.65% 12.77% 13.05% 11.97% Asset Quality Ratios: (2) Nonperforming loans to total loans (8) 0.33% 0.05% 0.08% 0.08% 0.36% Nonperforming assets to total assets (9) 0.28% 0.04% 0.07% 0.05% 0.28% Allowance for credit losses on loans and leases to total loans 0.99% 1.01% 1.26% 1.87% 1.06% Allowance for credit losses on loan and leases to nonperforming loans (8) 294.74% 2110.64% 1555.47% 2449.21% 292.66% Net charge-offs (recoveries) to average loans 0.04% 0.02% (0.01%) 13.00% (0.02%) Per Share Data: Basic earnings per common share $ 2.64 $ 2.84 $ 2.84 $ 4.53 $ 2.05 Diluted earnings per common share 2.63 2.78 2.77 4.47 2.03 Dividends declared per common share 0.23 0.18 0.13 - - Tangible book value per common share at end of period 23.74 21.43 19.28 16.79 12.40 (1) Loans and leases, net represents the recorded investment in loans net of the allowance for credit losses on loans and leases (ACL – Loans).
At December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Selected Financial Condition Data: Total assets $ 2,065,523 $ 2,058,615 $ 1,820,174 $ 1,495,589 $ 1,476,995 Cash and cash equivalents 235,272 261,595 151,787 166,591 221,594 Securities available for sale 8,683 8,092 10,442 16,347 8,701 Equity securities 5,000 5,000 5,000 5,000 5,000 Loans held for sale 2,623 1,849 580 27,988 283,165 Loans and leases, net (1) 1,722,019 1,694,133 1,572,255 1,214,149 895,344 Allowance for credit losses on loans and leases 17,474 16,865 16,062 15,508 17,022 Nonperforming assets 15,047 5,722 761 997 695 Foreclosed assets - - - - - Deposits 1,755,795 1,744,057 1,527,922 1,246,352 1,113,070 FHLB advances and other debt 92,680 109,995 109,461 89,727 214,426 Subordinated debentures 15,000 14,961 14,922 14,883 14,844 Total stockholders' equity 168,437 155,374 139,248 125,330 110,210 For the year ended December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Summary of Operations: Total interest income $ 118,389 $ 108,279 $ 67,764 $ 52,348 $ 42,386 Total interest expense 71,745 60,639 18,974 10,309 14,578 Net interest income 46,644 47,640 48,790 42,039 27,808 Provision for loan and lease losses 6,737 2,317 787 (1,600) 10,915 Net interest income after provision for loan and lease losses 39,907 45,323 48,003 43,639 16,893 Noninterest income: Net gain on sale of loans 681 185 1,009 7,359 58,366 Other 4,494 3,846 2,201 4,281 1,627 Total noninterest income 5,175 4,031 3,210 11,640 59,993 Noninterest expense 28,938 28,369 28,621 32,461 40,603 Income before income taxes 16,144 20,985 22,592 22,818 36,283 Income tax expense 2,757 4,048 4,428 4,365 6,675 Net income $ 13,387 $ 16,937 $ 18,164 $ 18,453 $ 29,608 38 Table of Contents At or for the year ended December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Selected Financial Ratios and Other Data: Performance Ratios (2) Return on average assets 0.67% 0.88% 1.11% 1.26% 2.59% Return on average equity 8.29% 11.46% 13.69% 15.58% 32.04% Average yield on interest-earning assets (3) 6.17% 5.89% 4.37% 3.79% 3.89% Average rate paid on interest-bearing liabilities 4.54% 3.99% 1.55% 0.95% 1.64% Average interest rate spread (4) 1.63% 1.90% 2.82% 2.84% 2.25% Net interest margin, fully taxable equivalent (5) 2.43% 2.59% 3.15% 3.04% 2.55% Average interest-earning assets to interest bearing liabilities 121.33% 120.70% 126.74% 127.13% 122.64% Efficiency ratio (6) 55.84% 54.90% 55.04% 60.47% 46.24% Noninterest expenses to average assets 1.44% 1.47% 1.76% 2.22% 3.55% Common stock dividend payout ratio 12.14% 8.75% 6.47% 4.69% 0.67% Capital Ratios: (2) Equity to total assets at end of period 8.15% 7.55% 7.65% 8.38% 7.46% Average equity to average assets 8.03% 7.66% 8.14% 8.11% 8.07% Tier 1 (core) capital to adjusted total assets (Leverage ratio) (7) 10.33% 9.76% 9.89% 11.29% 9.74% Total capital to risk weighted assets (7) 13.60% 13.30% 12.74% 14.02% 14.31% Tier 1 (core) capital to risk weighted assets (7) 12.45% 12.17% 11.65% 12.77% 13.05% Common equity tier 1 capital to risk weighted assets (7) 12.45% 12.17% 11.65% 12.77% 13.05% Asset Quality Ratios: (2) Nonperforming loans to total loans (8) 0.87% 0.33% 0.05% 0.08% 0.08% Nonperforming assets to total assets (9) 0.71% 0.28% 0.04% 0.07% 0.05% Allowance for credit losses on loans and leases to total loans 1.00% 0.99% 1.01% 1.26% 1.87% Allowance for credit losses on loan and leases to nonperforming loans (8) 116.13% 294.74% 2110.64% 1555.47% 2449.21% Net charge-offs (recoveries) to average loans 0.32% 0.04% 0.02% (0.01%) 13.00% Per Share Data: Basic earnings per common share $ 2.08 $ 2.64 $ 2.84 $ 2.84 $ 4.53 Diluted earnings per common share 2.06 2.63 2.78 2.77 4.47 Dividends declared per common share 0.25 0.23 0.18 0.13 - Tangible book value per common share at end of period 25.51 23.74 21.43 19.28 16.79 (1) Loans and leases, net represents the recorded investment in loans net of the allowance for credit losses on loans and leases (ACL – Loans).
See Note 4 in the accompanying Notes to Consolidated Financial Statements included in this Form 10-K for additional information regarding the regulatory asset classifications. The level of total criticized and classified loans increased by $5.6 million, or 73.6%, during the year ended December 31, 2023.
See Note 4 in the accompanying Notes to Consolidated Financial Statements included in this Form 10-K for additional information regarding the regulatory asset classifications. The level of total criticized and classified loans increased by $19.9 million, or 151.2%, during the year ended December 31, 2024.
The credit facility is revolving until May 21, 2024 at which time any then-outstanding balance will be converted to a 10-year term note on a graduated 10-year amortization.
The credit facility was revolving until May 21, 2024, at which time the outstanding balance was converted to a 10-year term note on a graduated 10-year amortization.
Our principal market area for loans and deposits includes the following counties: Franklin County through our office in Columbus, Ohio (formerly located in Worthington, Ohio until March 1, 2023); Delaware County, Ohio through our Polaris office in Columbus, Ohio; Cuyahoga County through our office in Woodmere, Ohio and our Ohio City office in Cleveland, Ohio; Summit County through our office in Fairlawn, Ohio; Hamilton County through our offices in Blue Ash, Ohio and our Red Bank office in Cincinnati, Ohio; and Marion County, Indiana through our office in Indianapolis.
Our principal market area for deposits and loans includes the following counties in Ohio and Indiana: Franklin County, Ohio through our offices in Columbus, Ohio; Delaware County, Ohio through our Polaris office in Columbus, Ohio; Cuyahoga County, Ohio through our office in Orange Village, Ohio and our Ohio City office in Cleveland, Ohio; Summit County, Ohio through our office in Fairlawn, Ohio; Hamilton County, Ohio through our offices in Blue Ash, Ohio and our Red Bank office in Cincinnati, Ohio; and Marion County, Indiana through our office in Indianapolis.
Net loans and leases totaled $1.7 billion at December 31, 2023 and increased $121.9 million, or 7.8%, from $1.6 billion at December 31, 2022.
Net loans and leases totaled $1.7 billion at December 31, 2024 and increased $27.9 million, or 1.6%, from $1.7 billion at December 31, 2023.
CFBank’s additional borrowing capacity at the FRB increased $31.1 million, or 29.6%, to $136.2 million at December 31, 2023 from $105.1 million at December 31, 2022. CFBank is eligible to participate in the FRB’s primary credit program, providing CFBank access to short-term funds at any time, for any reason, based on the collateral pledged.
CFBank’s additional borrowing capacity at the FRB decreased $8.8 million, or 6.5%, to $127.4 million at December 31, 2024 from $136.2 million at December 31, 2023. CFBank is eligible to participate in the FRB’s primary credit program, providing CFBank access to short-term funds at any time, for any reason, based on the collateral pledged.
The increases in the aforementioned loan balances were related to increased sales activity and new relationships. Allowance for Credit Losses on Loans . (ACL – Loans) The ACL – Loans totaled $16.9 million at December 31, 2023, and increased $803,000, or 5.0%, from $16.1 million at December 31, 2022.
The increases in the aforementioned loan balances were primarily related to increased sales activity and new relationships. Allowance for Credit Losses on Loans (ACL – Loans). The ACL – Loans totaled $17.5 million at December 31, 2024, and increased $609,000, or 3.6%, from $16.9 million at December 31, 2023.
This review should be read in conjunction with our consolidated financial statements and related notes. Fi nancial Condition General. Assets totaled $2.1 billion at December 31, 2023 and increased $238.4 million, or 13.1%, from $1.8 billion at December 31, 2022.
This review should be read in conjunction with our Consolidated Financial Statements and related Notes. Fi nancial Condition General. Assets totaled $2.1 billion at December 31, 2024 and increased $6.9 million, or 0.3%, from $2.1 billion at December 31, 2023.
Accordingly, rates offered by competing financial institutions may affect our ability to attract and retain deposits. CFBank relies on co m petitive interest rates, custo m er service, and relationships with custo m ers to retain d e posits.
Accordingly, rates offered by competing financial institutions may affect our ability to attract and retain deposits. CFBank relies on co m petitive interest rates, custo m er service, and relationships with custo m ers to retain d e posits. The Holding Company has more limited sources of liquidity than CFBank.
The decrease in net income was primarily due to a decrease in net gain on sale of loans, a decrease in net gain on sale of deposits and an increase in provision expense, which was partially offset by an increase in net interest income and a decrease in noninterest expenses. Net interest income.
The decrease in net income was primarily due to an increase in provision expense, a decrease in net interest income and an increase in noninterest expense, which was partially offset by an increase in noninterest interest. Net interest income.
Customer balances in the CDARS reciprocal and ICS reciprocal programs, which do not qualify as brokered, totaled $237.8 million at December 31, 2023 and increased $79.9 million, or 50.6%, from $157.9 million at December 31, 2022. FHLB advances and other debt.
Customer balances in the CDARS reciprocal and ICS reciprocal programs, which do not qualify as brokered, totaled $271.7 million at December 31, 2024 and increased $33.9 million, or 14.3%, from $237.8 million at December 31, 2023. FHLB advances and other debt.
Interest payments on the subordinated debentures were current at December 31, 2023 and December 31, 2022. See Note 11in the accompanying Notes to Consolidated Financial Statements for additional information. Stockholders’ equity. Stockholders’ equity totaled $155.4 million at December 31, 2023, an increase of $16.1 million, or 11.6%, from $139.2 million at December 31, 2022.
Interest payments on the subordinated debentures were current at December 31, 2024 and December 31, 2023. See Note 11 in the accompanying Notes to Consolidated Financial Statements for additional information. Stockholders’ equity. Stockholders’ equity totaled $168.4 million at December 31, 2024, an increase of $13.0 million, or 8.4%, from $155.4 million at December 31, 2023.
Premises and equipment, net, totaled $3.8 million at December 31, 2023, and increased $34,000, or 0.9%, from $3.8 million at December 31, 2022. See Note 8 in the accompanying Notes to Consolidated Financial Statements for additional information. Deposits .
Premises and equipment, net, totaled $3.5 million at December 31, 2024, and decreased $276,000, or 7.2%, from $3.8 million at December 31, 2023. See Note 8 in the accompanying Notes to Consolidated Financial Statements for additional information. Deposits .
The increase in interest expense was attributed to a 60bps increase in the average cost of funds on interest-bearing liabilities, coupled with a $135.9 million, or 12.5%, increase in average interest-bearing liabilities .
The increase in interest expense was attributed to a 55bps increase in the average cost of funds on interest-bearing liabilities, coupled with a $57.5 million, or 3.8%, increase in average interest-bearing liabilities .
The ASU allows for several different methods of computing the allowance for credit losses: closed pool, vintage, average charge-off, migration, probability of default / loss given default, discounted cash flow, and regression. Based on its analysis of observable data, the Company concluded the average charge-off method to be the most appropriate and statistically relevant.
The ASU allows for several different methods of computing the allowance for credit losses. Based on its analysis of observable data, the Company concluded the average charge-off method to be the most appropriate and statistically relevant.
The net interest margin of 2.59% for the year ended December 31, 2023 decreased 56bps compared to the net interest margin of 3.15% for the year ended December 31, 2022 .
The net interest margin of 2.43% for the year ended December 31, 2024 decreased 16bps compared to the net interest margin of 2.59% for the year ended December 31, 2023 .
Interest income totaled $108.3 million for the twelve months ended December 31, 2023, and increased $40.5 million, or 59.8%, compared to $67.8 million for the twelve months ended December 31, 2022.
The net interest margin of 2.59% for the year ended December 31, 2023 decreased 56bps compared to the net interest margin of 3.15% for the year ended December 31, 2022 . 46 Table of Contents Interest income totaled $108.3 million for the twelve months ended December 31, 2023, and increased $40.5 million, or 59.8%, compared to $67.8 million for the twelve months ended December 31, 2022.
Interest-only commercial lines of credit totaled $147.5 million, or 33.5% of CFBank’s commercial portfolio at December 31, 2023, compared to $117.9 million, or 27.6%, at December 31, 2022.
Interest only commercial lines of credit totaled $131.2 million, or 31.3% of CFBank’s commercial portfolio at December 31, 2024, compared to $147.5 million, or 33.5%, at December 31, 2023.
Interest only home equity lines of credit totaled $33.6 million, or 93.4% of the total home equity lines of credit, at December 31, 2023 compared to $30.5 million, or 99.2%, at December 31, 2022 .
Interest only home equity lines of credit totaled $38.8 million, or 98.1% of the total home equity lines of credit, at December 31, 2024 compared to $33.6 million, or 93.4%, at December 31, 2023 .
Management believes that the Holding Company had adequate funds at December 31, 2023 to meet its current and anticipated operating needs at this time. The Holding Company’s current cash requirements include operating expenses and interest on subordinated debentures and other debt. The Company may also pay dividends on its common stock, if and when declared by the Board of Directors.
Management believes that the Holding Company had adequate funds and sources of liquidity at December 31, 2024 to meet its current and anticipated operating needs at this time. The Holding Company’s current cash requirements include operating expenses and interest on subordinated debentures and other debt.
Additional information is included in Notes 1, 6 and 17 in the accompanying Notes to Consolidated Financial Statements. General Our net income is dependent primarily on net interest income, which is the difference between the interest income earned on loans and securities and our cost of funds, consisting of interest paid on deposits and borrowed funds.
Additional information regarding this policy is included in the section titled “Financial Condition - Allowance for Credit Losses on Loans ” and in Notes 1, 4 and 6 in the accompanying Notes to Consolidated Financial Statements. ‎ 41 Table of Contents General Our net income is dependent primarily on net interest income, which is the difference between the interest income earned on loans and securities and our cost of funds, consisting of interest paid on deposits and borrowed funds.
For the Years Ended December 31, 2023 2022 2021 Average Interest Average Average Interest Average Average Interest Average Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Balance Paid Rate Balance Paid Rate Balance Paid Rate (Dollars in thousands) Interest-earning assets: Securities (1) (2) $ 14,198 $ 658 3.86% $ 17,805 $ 881 4.58% $ 19,311 $ 756 3.93% Loans and leases and loans held for sale (3) 1,635,173 97,383 5.96% 1,385,701 63,717 4.60% 1,277,239 51,256 4.01% Other earning assets 178,275 9,646 5.41% 138,805 2,818 2.03% 79,017 102 0.13% FHLB and FRB stock 8,566 592 6.91% 7,413 348 4.69% 6,220 234 3.76% Total interest-earning assets 1,836,212 108,279 5.89% 1,549,724 67,764 4.37% 1,381,787 52,348 3.79% Noninterest-earning assets 92,957 79,467 79,393 Total assets $ 1,929,169 $ 1,629,191 $ 1,461,180 Interest-bearing liabilities: Deposits $ 1,396,298 56,363 4.04% $ 1,121,003 15,952 1.42% $ 978,258 8,014 0.82% FHLB advances and other borrowings 124,999 4,276 3.42% 101,757 3,022 2.97% 108,637 2,295 2.11% Total interest-bearing liabilities 1,521,297 60,639 3.99% 1,222,760 18,974 1.55% 1,086,895 10,309 0.95% Noninterest-bearing liabilities 260,060 273,789 255,855 Total liabilities 1,781,357 1,496,549 1,342,750 Equity 147,812 132,642 118,430 Total liabilities and equity $ 1,929,169 $ 1,629,191 $ 1,461,180 Net interest-earning assets $ 314,915 $ 326,964 $ 294,892 Net interest income/interest rate spread $ 47,640 1.90% $ 48,790 2.82% $ 42,039 2.84% Net interest margin 2.59% 3.15% 3.04% Average interest-earning assets to average interest-bearing liabilities 120.70% 126.74% 127.13% (1) Average balance is computed using the carrying value of securities.
For the Years Ended December 31, 2024 2023 2022 Average Interest Average Average Interest Average Average Interest Average Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Balance Paid Rate Balance Paid Rate Balance Paid Rate (Dollars in thousands) Interest-earning assets: Securities (1) (2) $ 13,245 $ 549 3.43% $ 14,198 $ 658 3.86% $ 17,805 $ 881 4.58% Loans and leases and loans held for sale (3) 1,702,444 106,750 6.27% 1,635,173 97,383 5.96% 1,385,701 63,717 4.60% Other earning assets 191,070 10,415 5.45% 178,275 9,646 5.41% 138,805 2,818 2.03% FHLB and FRB stock 8,792 675 7.68% 8,566 592 6.91% 7,413 348 4.69% Total interest-earning assets 1,915,551 118,389 6.17% 1,836,212 108,279 5.89% 1,549,724 67,764 4.37% Noninterest-earning assets 96,518 92,957 79,467 Total assets $ 2,012,069 $ 1,929,169 $ 1,629,191 Interest-bearing liabilities: Deposits $ 1,454,353 67,158 4.62% $ 1,396,298 56,363 4.04% $ 1,121,003 15,952 1.42% FHLB advances and other borrowings 124,417 4,587 3.69% 124,999 4,276 3.42% 101,757 3,022 2.97% Total interest-bearing liabilities 1,578,770 71,745 4.54% 1,521,297 60,639 3.99% 1,222,760 18,974 1.55% Noninterest-bearing liabilities 271,756 260,060 273,789 Total liabilities 1,850,526 1,781,357 1,496,549 Equity 161,543 147,812 132,642 Total liabilities and equity $ 2,012,069 $ 1,929,169 $ 1,629,191 Net interest-earning assets $ 336,781 $ 314,915 $ 326,964 Net interest income/interest rate spread $ 46,644 1.63% $ 47,640 1.90% $ 48,790 2.82% Net interest margin 2.43% 2.59% 3.15% Average interest-earning assets to average interest-bearing liabilities 121.33% 120.70% 126.74% (1) Average balance is computed using the carrying value of securities.
At December 31, 2023 and 2022, CFBank had availability in unused lines of credit at two commercial banks in the amounts of $50.0 million and $15.0 million, respectively. There were no outstanding borrowings on either line at December 31, 2023 or December 31, 2022.
At December 31, 2024 and 2023, CFBank had availability in unused lines of credit at two commercial banks in the amounts of $50.0 million and $15.0 million, respectively.
Effective July 1, 2023, the rate of interest on the subordinated debentures resets quarterly to the three-month Secured Overnight Financing Rate (SOFR) plus 3.112%, which was 8.44% at December 31, 2023.
Prior to July 1, 2023, the subordinated debentures had a variable rate of interest, which reset quarterly, equal to the three-month London Interbank Offered Rate (LIBOR) plus 2.85%. Effective July 1, 2023, the rate of interest on the subordinated debentures resets quarterly to the three-month Secured Overnight Financing Rate (SOFR) plus 3.112%, which was 7.44% at December 31, 2024.
The increase in cash and cash equivalents was primarily attributed to an increase in deposits, partially offset by an increase in net loans. Securities. Securities available for sale totaled $8.1 million at December 31, 2023, and decreased $2.3 million, or 22.5%, compared to $10.4 million at December 31, 2022. The decrease was primarily due to principal maturities.
The decrease in cash and cash equivalents was primarily attributed to an increase in net loan balances. Securities. Securities available for sale totaled $8.7 million at December 31, 2024, and increased $591,000, or 7.3%, compared to $8.1 million at December 31, 2023. The increase was primarily due to the purchase of new securities, partially offset by principal maturities.
Loans designated as special mention decreased $2.7 million, or 40.3%, and totaled $4.1 million at December 31, 2023, compared to $6.8 million at December 31, 2022. Loans classified as substandard increased $8.0 million and totaled $8.6 million at December 31, 2023, compared to $681,000 at December 31, 2022.
Loans designated as special mention increased $14.4 million, or 352.8%, and totaled $18.5 million at December 31, 2024, compared to $4.1 million at December 31, 2023. Loans classified as substandard increased $5.6 million and totaled $14.2 million at December 31, 2024, compared to $8.6 million at December 31, 2023.
Borrowings on the credit facility bear interest at a fixed rate of 3.85% until May 21, 2026, and the interest rate then converts to a floating rate equal to PRIME with a floor of 3.75%.
Borrowings on the credit facility bear interest at a fixed rate of 3.85% until May 21, 2026, and the interest rate then converts to a floating rate equal to PRIME with a floor of 3.75%. At December 31, 2024, the Company had an outstanding balance, net of unamortized debt issuance costs, of $34.7 million on the facility.
Year Ended Year Ended December 31, 2023 December 31, 2022 Compared to Year Ended Compared to Year Ended December 31, 2022 December 31, 2021 Increase (decrease) due to Increase (decrease) due to Rate Volume Net Rate Volume Net (Dollars in thousands) Interest-earning assets: Securities (1) $ (98) $ (125) $ (223) $ 165 $ (40) $ 125 Loans and leases 20,898 12,768 33,666 2,716 9,745 12,461 Other earning assets 5,832 996 6,828 2,584 132 2,716 FHLB and FRB stock 184 60 244 64 50 114 Total interest-earning assets 26,816 13,699 40,515 5,529 9,887 15,416 Interest-bearing liabilities: Deposits 35,645 4,766 40,411 6,627 1,311 7,938 FHLB advances and other borrowings 501 753 1,254 880 (153) 727 Total interest-bearing liabilities 36,146 5,519 41,665 7,507 1,158 8,665 Net change in net interest income $ (9,330) $ 8,180 $ (1,150) $ (1,978) $ 8,729 $ 6,751 (1) Securities amounts are presented on a fully taxable equivalent basis.
Year Ended Year Ended December 31, 2024 December 31, 2023 Compared to Year Ended Compared to Year Ended December 31, 2023 December 31, 2022 Increase (decrease) due to Increase (decrease) due to Rate Volume Net Rate Volume Net (Dollars in thousands) Interest-earning assets: Securities (1) $ (67) $ (42) $ (109) $ (98) $ (125) $ (223) Loans and leases 5,265 4,102 9,367 20,898 12,768 33,666 Other earning assets 71 698 769 5,832 996 6,828 FHLB and FRB stock 67 16 83 184 60 244 Total interest-earning assets 5,336 4,774 10,110 26,816 13,699 40,515 Interest-bearing liabilities: Deposits 8,384 2,411 10,795 35,645 4,766 40,411 FHLB advances and other borrowings 331 (20) 311 501 753 1,254 Total interest-bearing liabilities 8,715 2,391 11,106 36,146 5,519 41,665 Net change in net interest income $ (3,379) $ 2,383 $ (996) $ (9,330) $ 8,180 $ (1,150) (1) Securities amounts are presented on a fully taxable equivalent basis.
Loans that are not rated under our internal credit rating system include groups of homogenous loans, such as single-family residential real estate loans and consumer loans. The primary credit indicator for these groups of homogenous loans is past due information.
In addition to credit monitoring through our internal loan risk rating system, we also monitor past due information for all loan segments. Loans that are not rated under our internal credit rating system include groups of homogenous loans, such as single-family residential real estate loans and consumer loans.
Borrowings on the credit facility bear interest at a fixed rate of 3.85% until May 21, 2026, and the interest rate then converts to a floating rate equal to PRIME with a floor of 3.25%.
Borrowings on the credit facility bear interest at a fixed rate of 3.85% until May 21, 2026, and the interest rate then converts to a floating rate equal to PRIME with a floor of 3.25%. As of December 31, 2024, the Company had an outstanding balance, net of unamortized debt issuance costs, of $34.7 million on the facility.
Equity securities totaled $5.0 million at both December 31, 2023 and December 31, 2022. 43 Table of Contents Loans held for sale. Loans held for sale totaled $1.8 million at December 31, 2023 and increased $1.3 million, or 218.8%, from $580,000 at December 31, 2022. Loans and Leases.
Equity securities totaled $5.0 million at both December 31, 2024 and December 31, 2023. Loans held for sale. Loans held for sale totaled $2.6 million at December 31, 2024 and increased $774,000, or 41.9%, from $1.8 million at December 31, 2023. Loans and Leases.
The increase in net interest income was primarily due to a $15.5 million, or 29.5%, increase in interest income, partially offset by a $8.7 million, or 84.1%, increase in interest expense.
The decrease in net interest income was primarily due to a $11.1 million, or 18.3%, increase in interest expense, partially offset by a $10.1 million, or 9.3%, increase in interest income.
December 31, 2023 December 31, 2022 (Dollars in thousands) Cash, unpledged securities and deposits in other financial institutions $ 262,004 $ 154,410 Additional borrowing capacity at the FHLB 183,654 187,854 Additional borrowing capacity at the FRB 136,240 105,119 Unused commercial bank lines of credit 65,000 65,000 Total $ 646,898 $ 512,383 Cash, unpledged securities and deposits in other financial institutions increased $107.6 million, or 69.7%, to $262.0 million at December 31, 2023, compared to $154.4 million at December 31, 2022.
December 31, 2024 December 31, 2023 (Dollars in thousands) Cash, unpledged securities and deposits in other financial institutions $ 237,863 $ 262,004 Additional borrowing capacity at the FHLB 186,303 183,654 Additional borrowing capacity at the FRB 127,424 136,240 Unused commercial bank lines of credit 65,000 65,000 Total $ 616,590 $ 646,898 Cash, unpledged securities and deposits in other financial institutions decreased $24.1 million, or 9.2%, to $237.9 million at December 31, 2024, compared to $262.0 million at December 31, 2023.
The reserve on individually evaluated loans is based on management’s estimate of the present value of estimated future cash flows using the loan’s effective rate or the fair value of collateral, if repayment is expected solely from the collateral.
The amount of the ACL - Loans specifically calculated for individually evaluated loans totaled $2.3 million at December 31, 2024 and $697,000 at December 31, 2023. 42 Table of Contents The reserve on individually evaluated loans is based on management’s estimate of the present value of estimated future cash flows using the loan’s effective rate or the fair value of collateral, if repayment is expected solely from the collateral.
The increase was primarily attributed to an increase in deposits, partially offset by an increase in net loan balances . CFBank’s additional borrowing capacity with the FHLB decreased $4.2 million, or 2.2%, to $183.7 million at December 31, 2023, compared to $187.9 million at December 31, 2022.
The decrease was primarily attributed to an increase in loans, partially offset by a decrease in FHLB borrowings and other debt and an increase in deposits . CFBank’s additional borrowing capacity with the FHLB increased $2.6 million, or 1.4%, to $186.3 million at December 31, 2024, compared to $183.7 million at December 31, 2023.
The increase was primarily due to a $121.9 million increase in net loan balances and a $109.8 million increase in cash and cash equivalents. Cash and cash equivalents. Cash and cash equivalents totaled $261.6 million at December 31, 2023, and increased $109.8 million, or 72.3%, from $151.8 million at December 31, 2022.
The increase was primarily due to a $27.9 million increase in net loan balances, partially offset by a $26.3 million decrease in cash and cash equivalents. Cash and cash equivalents. Cash and cash equivalents totaled $235.3 million at December 31, 2024, and decreased $26.3 million, or 10.1%, from $261.6 million at December 31, 2023.
CFBank has leveraged its capital to support balance sheet growth and drive increased net interest income. Management remains focused on growing capital though improving results from operations; however, should the need arise, CFBank has additional sources of capital and alternatives it could utilize as further discussed in the “Liquidity and Capital Resources” section in this Form 10-K.
Management remains focused on growing capital though improving results from operations; however, should the need arise, CFBank has additional sources of capital and alternatives it could utilize as further discussed in the “Liquidity and Capital Resources” section below. Co mparison of Results of Operations for 2024 and 2023 General.
Loans are charged off against the allowance when the uncollectibility of the loan is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged off and expected to be charged off. Adjustments to the ACL- Loans are reported in the income statement as a component of provision for credit loss.
Expected recoveries do not exceed the aggregate of amounts previously charged off and expected to be charged off. Adjustments to the ACL- Loans are reported in the income statement as a component of provision for credit loss. The Company has made the accounting policy election to exclude accrued interest receivable on loans from the estimate of credit losses.
Nonperforming loans, which are nonaccrual loans and loans at least 90 days past due but still accruing interest, totaled $5.7 million at December 31, 2023, and increased $5.0 million from $761,000 at December 31, 2022. The increase in nonaccrual loans was primarily driven by seven commercial loans, totaling $5.0 million, becoming nonaccrual during in 2023.
Nonperforming loans, which are nonaccrual loans and loans at least 90 days past due but still accruing interest, totaled $15.0 million at December 31, 2024, and increased $9.3 million from $5.7 million at December 31, 2023.
Interest expense totaled $19.0 million for the twelve months ended December 31, 2022, and increased $8.7 million, or 84.1%, compared to $10.3 million for the twelve months ended December 31, 2021.
Interest expense totaled $71.7 million for the twelve months ended December 31, 2024, and increased $11.1 million, or 18.3%, compared to $60.6 million for the twelve months ended December 31, 2023.
The increase in interest income was primarily attributed to a $347.1 million, or 33.6%, increase in average loans outstanding, coupled with a 18bps increase in the average yield on loans, partially offset by a $238.7 million, or 97.4%, decrease in average loans held for sale.
The increase in interest income was primarily attributed to a 31bps increase in the average yield on loans and leases and loans held for sale, coupled with a $67.3 million, or 4.1%, increase in average loans and leases and loans held for sale.
Income tax expense was $4.4 million for the year ended December 31, 2022, an increase of $63,000, compared to $4.4 million for the year ended December 31, 2021. The effective tax rate for the year ended December 31, 2022 was approximately 19.6%, as compared to approximately 19.1% for the year ended December 31, 2021.
Income tax expense was $2.8 million for the year ended December 31, 2024, a decrease of $1.2 million, compared to $4.0 million for the year ended December 31, 2023. The effective tax rate for the year ended December 31, 2024 was approximately 17.1%, as compared to approximately 19.3% for the year ended December 31, 2023.
The increase in interest expense was primarily attributed to a 60bps increase in the average rate of interest-bearing deposits, coupled with a $142.7 million, or 14.6%, increase in average interest-bearing deposits. Provision for loan and lease losses.
The increase in interest expense was primarily attributed to a 58bps increase in the average rate of interest-bearing deposits, coupled with a $58.1 million, or 4.2%, increase in average interest-bearing deposits. 45 Table of Contents Provision for credit losses.
The loan was modified to defer principal and interest payments for up to one year. For any period where the payments are deferred, the note will accrue at a higher rate of interest. The loan was not past due at December 31, 2023.
The loan was modified to defer principal and interest payments for up to one year. For any period where the payments are deferred, the note will accrue at a higher rate of interest. We have incorporated the regulatory asset classifications as a part of our credit monitoring and internal loan risk rating system.
The increase in total stockholders’ equity was primarily attributed to net income, partially offset by $1.5 million in dividend payments and a $253,000 increase in other comprehensive loss. The other comprehensive loss was the result of the mark-to-market adjustment of our investment portfolio. Management continues to proactively monitor capital levels and ratios in its on-going capital planning process.
The increase in total stockholders’ equity was primarily attributed to net income, partially offset by $1.6 million in dividend payments. Management continues to proactively monitor capital levels and ratios in its on-going capital planning process. CFBank has leveraged its capital to support balance sheet growth and drive increased net interest income.
The following table presents information regarding net charge-offs (recoveries) for 2022 and 2021. 2022 2021 (Dollars in thousands) Net charge-offs (recoveries) Commercial $ 263 $ (56) Single-family residential real estate (19) (9) Home equity lines of credit (11) (21) Total $ 233 $ (86) See the section below titled “Financial Condition – Allowance for loan and lease losses ” for additional information.
The following table presents information regarding net charge-offs (recoveries) for 2024 and 2023. 2024 2023 (Dollars in thousands) Net charge-offs (recoveries) Commercial $ 5,232 $ 690 Single-family residential real estate (28) (40) Home equity lines of credit (6) (4) Other consumer loans 280 - Total $ 5,478 $ 646 See the section above titled “Financial Condition – Allowance for Credit Losses on Loans ” for additional information.
The ratio of the ACL - Loans to total loans was 0.99% at December 31, 2023, compared to 1.01% at December 31, 2022. The ACL - Loans is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on loans over the contractual term.
The ACL - Loans is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on loans over the contractual term. Loans are charged off against the allowance when the uncollectibility of the loan is confirmed.
Our deferred tax assets are composed of U.S. net operating losses (“NOLs”), and other temporary book to tax differences. When determining the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded as a benefit, the Company conducts a regular assessment of all available information.
When determining the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded as a benefit, the Company conducts a regular assessment of all available information. This information includes, but is not limited to, taxable income in prior periods, projected future income and projected future reversals of deferred tax items.
Net interest income totaled $48.8 million for the year ended December 31, 2022 and increased $6.8 million, or 16.1%, compared to net interest income of $42.0 million for the year ended December 31, 2021.
Net interest income totaled $46.6 million for the year ended December 31, 2024 and decreased $996,000, or 2.1%, compared to net interest income of $47.6 million for the year ended December 31, 2023.
The increase in interest income was primarily attributed to a $167.9 million, or 12.2%, increase in average interest-earning assets outstanding, resulting primarily from an increase in net loans and loans held for sale, coupled with a 58bps increase in average yield on interest-earning assets.
The increase in interest income was primarily attributed to a 28bps increase in the average yield on interest-earning assets, coupled with a $79.3 million, or 4.3%, increase in average interest-earning assets outstanding.
This information includes, but is not limited to, taxable income in prior periods, projected future income and projected future reversals of deferred tax items. Based on these criteria, the Company determined as of December 31, 2022 that no valuation allowance was required against the net deferred tax asset.
Based on these criteria, the Company determined as of December 31, 2023 that no valuation allowance was required against the net deferred tax asset.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

239 edited+63 added−64 removed196 unchanged
The ACL - Loans represents the Company's best estimate of current expected credit losses (CECL) on loans using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses.
The ACL - Loans represents the Company's best estimate of CECL on loans using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses.
Fixed-rate loans are generally limited to three years to five years , at which time they convert to adjustable-rate loans.
Fixed-rate loans are generally limited to three years to five years , at which time they convert to adjustable-rate loans.
Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale, which are also recognized as a separate component of equity. Reclassifications from accumulated other comprehensive income are conducted on a specific identification method.
Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale, which are also recognized as a separate component of equity. Reclassifications from accumulated other comprehensive loss are conducted on a specific identification method.
The various risks that may be considered in making qualitative adjustments include, among other things, the impact of (i) changes in economic conditions, (ii) changes in the nature and volume of the loan portfolio, (iii) changes in the existence, growth and effect of any concentrations in credit, (iv) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries, (v) changes in the quality of the credit review function, (vi) changes in the experience, ability and depth of lending management and staff, (vii) changes in the volume and severity of past due and adversely classified loans and the volume of non-accrual loans, (viii) changes in the value of underlying collateral for collateral-dependent loans, and (ix) other environmental factors such as regulatory, legal and technological considerations, as well as competition.
The various risks that may be considered in making qualitative adjustments include, among other things, the impact of (i) changes in economic conditions, (ii) changes in the nature and volume of the loan portfolio, (iii) changes in the existence, growth and effect of any concentrations in credit, (iv) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries, (v) changes in the quality of the credit review function, (vi) changes in the experience, ability and depth of lending management and staff, (vii) changes in the volume and severity of past due and adversely classified loans and the volume of non-accrual loans, (viii) changes in the value of underlying collateral for collateral-dependent loans, and (ix) other environmental factors such as regulatory, legal and technological considerations, as well as competition.
In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within the loan segments. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation.
In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within the loan segments. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation.
Specific reserves in the allowance for credit losses are determined by analyzing the borrower's ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower's industry, among other things.
Specific reserves in the allowance for credit losses are determined by analyzing the borrower's ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower's industry, among other things.
A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral.
A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral.
Equity Securities Equity securities without a readily determinable fair value are held at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
Equity Securities Equity securities without a readily determinable fair value are held at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
The Holding Company is a legal entity that is separate and distinct from CFBank, which has no obligation to make any dividends or other funds available for the payment of dividends by the Holding Company. The Holding Company also is subject to various legal and regulatory policies and guidelines impacting the Holding Company’s ability to pay dividends on its stock.
The Holding Company is a legal entity that is separate and distinct from CFBank, which has no obligation to make any dividends or other funds available for the payment of dividends by the Holding Company. The Holding Company also is subject to various legal and regulatory policies and guidelines impacting the Holding Company’s ability to pay dividends on its stock.
In addition, the Holding Company’s ability to pay dividends on its stock is conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities.
In addition, the Holding Company’s ability to pay dividends on its stock is conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities.
Finally, under the terms of the Holding Company’s fixed-to-floating rate subordinated debt, the Holding Company’s ability to pay dividends on its stock is conditioned upon the Holding Company continuing to make required principal and interest payments, and not incurring an event of default, with respect to the subordinated debt.
Finally, under the terms of the Holding Company’s fixed-to-floating rate subordinated debt, the Holding Company’s ability to pay dividends on its stock is conditioned upon the Holding Company continuing to make required principal and interest payments, and not incurring an event of default, with respect to the subordinated debt.
Federal Reserve Bank (FRB) stock: CFBank is a member of the Federal Reserve System and is required to own a certain amount of stock in the FRB. FRB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.
FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Federal Reserve Bank (FRB) stock: CFBank is a member of the Federal Reserve System and is required to own a certain amount of stock in the FRB.
Effective July 1, 2023, the rate of interest on the subordinated debentures began to reset quarterly to the three-month Secured Overnight Financing Rate (SOFR) plus 3.112 %, which was 8.44 % at December 31, 2023. 2018 Fixed-to-floating rate subordinated notes: In December 2018, the Holding Company entered into subordinated note purchase agreements with certain qualified institutional buyers and completed a private placement of $ 10 million of fixed-to-floating rate subordinated notes with a maturity date of December 30, 2028 pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder.
Effective July 1, 2023, the rate of interest on the subordinated debentures began to reset quarterly to the three-month Secured Overnight Financing Rate (SOFR) plus 3.112 %, which was 7.44 % at December 31, 2024 and 8.44 % at December 31, 2023. 2018 Fixed-to-floating rate subordinated notes: In December 2018, the Holding Company entered into subordinated note purchase agreements with certain qualified institutional buyers and completed a private placement of $ 10 million of fixed-to-floating rate subordinated notes with a maturity date of December 30, 2028 pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder.
Our hedging policy allows hedging activities, such as interest-rate swaps, up to a notional amount of 10% of total assets and a value at risk of 10% of core capital. Disclosures about our hedging activities are set forth in Note 17 to our Consolidated Financial Statements.
Our hedging policy allows economic hedging activities, such as interest-rate swaps, up to a notional amount of 10% of total assets and a value at risk of 10% of core capital. Disclosures about our economic hedging activities are set forth in Note 17 to our Consolidated Financial Statements.
MANAGE MENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of CF Bankshares Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended.
MANAGE MENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of CF Bankshares Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended.
Loans and leases are collectively referred to as loans for the purpose of discussing the allowance for credit losses. Loans are charged off against the allowance when the uncollectibility of the loan is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged off and expected to be charged off.
Loans and leases are collectively referred to as “loans” for the purpose of discussing the allowance for credit losses. Loans are charged off against the allowance when the uncollectibility of the loan is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged off and expected to be charged off.
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The amendments apply to all public entities that are required to report segment information in accordance with FASB ASC Topic 280, Segment Reporting.
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The amendments in this ASU apply to all public entities that are required to report segment information in accordance with FASB ASC 280, Segment Reporting.
Management does not believe there were any such matters at December 31, 2023 that will have a material effect on the financial statements. See Note 21 – Contingent Liabilities. Restrictions on Cash : Cash on deposit with the FHLB included $ 3,300 pledged as collateral for FHLB advances at December 31, 2023. Equity : Treasury stock is carried at cost.
Management does not believe there were any such matters at December 31, 2024 that will have a material effect on the financial statements. See Note 21 – Contingent Liabilities. Restrictions on Cash : Cash on deposit with the FHLB included $ 3,300 pledged as collateral for FHLB advances at December 31, 2024. Equity : Treasury stock is carried at cost.
Certain Relationships and Related Transactions, and Director Independence. Information required by Items 404 and 407(a) of Regulation S-K will be included in the sections captioned “CORPORATE GOVERNANCE – Certain Relationships and Related Party Transactions” and “CORPORATE GOVERNANCE – Director Independence” in our 2024 Proxy Statement, which sections are incorporated herein by reference. It em 14. Principal Accounting Fees and Services.
Certain Relationships and Related Transactions, and Director Independence. Information required by Items 404 and 407(a) of Regulation S-K will be included in the sections captioned “CORPORATE GOVERNANCE – Certain Relationships and Related Party Transactions” and “CORPORATE GOVERNANCE – Director Independence” in our 2025 Proxy Statement, which sections are incorporated herein by reference. It em 14. Principal Accounting Fees and Services.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
As of December 31, 2023 and December 31, 2022, there was $ 100 in interest-bearing deposits in other financial institutions. Securities : Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income.
As of December 31, 2024 and December 31, 2023, there was $ 100 in interest-bearing deposits in other financial institutions. Securities : Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income.
Based on these criteria, the Company determined as of December 31, 2023 that no valuation allowance was required against the net deferred tax asset. In 2012, a recapitalization program through the sale of $ 22,500 in common stock improved the capital levels of CFBank and provided working capital for the Holding Company.
Based on these criteria, the Company determined as of December 31, 2024 that no valuation allowance was required against the net deferred tax asset. In 2012, a recapitalization program through the sale of $ 22,500 in common stock improved the capital levels of CFBank and provided working capital for the Holding Company.
Collectability of home equity lines of credit are dependent on the borrower's continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. We continue to monitor collateral values and borrower FICO® scores on both purchased and portfolio loans and, when the situation warrants, have frozen the lines of credit.
Collections of home equity lines of credit are dependent on the borrower's continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. We continue to monitor collateral values and borrower FICO® scores on both purchased and portfolio loans and, when the situation warrants, have frozen the lines of credit.
Changes in internal control over financial reporting. There were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) in the fourth quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Ite m 9B. Other Information.
Changes in internal control over financial reporting. There were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) in the fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Ite m 9B. Other Information.
(a) None (b) During the quarter ended December 31, 2023, no director or officer (as defined under Rule 16a-1 of the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangements or any non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of regulation S-K) I tem 9C.
(a) None (b) During the quarter ended December 31, 2024, no director or officer (as defined under Rule 16a-1 of the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangements or any non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of regulation S-K). I tem 9C.
This compiled document has not been filed with the Delaware Secretary of State.] 3.12 Certificate of Designations to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K dated February 5, 2024, filed with the Commission on February 6, 2024 (File No. 0-25045)) 3.13 Second Amended and Restated Bylaws of the registrant (incorporated by reference to Exhibit 3.3 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, filed with the Commission on March 27, 2008 (File No. 0-25045)) 4.1 Form of Stock Certificate of Central Federal Corporation (incorporated by reference to Exhibit 4.0 to the registrant’s Registration Statement on Form SB-2 (File No. 333-64089), filed with the Commission on September 23, 1998) 4.2 Form of Subordinated Note Purchase Agreement by and between the Company and several Purchasers, dated December 20,2018 (incorporated by reference to Exhibit 10.1 to the registrants Current Report on Form 8-K dated December 20, 2018, filed with the Commission on December 21, 2018 (File No. 0-25045)) 4.3 Form of 7.0% Fixed-to-Floating Rate Subordinated Note due 2028 (incorporated by reference to Exhibit 10.2 to the registrants Current Report on Form 8-K dated December 20, 2018, filed with the Commission on December 21, 2018 (File No. 0-25045)) 4.4 Description of Capital Stock 4.5 Agreement to furnish instruments defining rights of holders of long-term debt 10.1 * Central Federal Corporation 2009 Equity Compensation Plan (incorporated by reference to Appendix A to the registrant’s Definitive Proxy Statement filed with the Commission on March 31, 2009) 10.2 * First Amendment to the Central Federal Corporation 2009 Equity Compensation Plan (incorporated by reference to Appendix A to the registrant’s Definitive Proxy Statement filed with the Commission on April 11, 2013) 10.3 * Form of Incentive Stock Option Award Agreement under the Central Federal Corporation 2009 Equity Compensation Plan (incorporated by reference to Exhibit 10.3 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed with the Commission on April 1, 2013 (File No. 0-25045) 108 Table of Contents 10.4 * Form of Non-Qualified Stock Option Award Agreement under the Central Federal Corporation 2009 Equity Compensation Plan (incorporated by reference to Exhibit 10.4 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed with the Commission on April 1, 2013 (File No. 0-25045) 10.5 * Central Federal Corporation 2019 Equity Compensation Plan (incorporated by reference to Annex A to the registrant’s Definitive Proxy Statement filed with the Commission on April 26, 2019) 10.6 * Form of Employee Restricted Stock Award Agreement under the Central Federal Corporation 2019 Equity Compensation Plan (incorporated by reference to Exhibit 10.8 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Commission on March 16, 2020 (File No. 0-25045)) 10.7 * Form of Director Restricted Stock Award Agreement under the Central Federal Corporation 2019 Equity Compensation Plan (incorporated by reference to Exhibit 10.9 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Commission on March 16, 2020 (File No. 0-25045)) 10.8 * Employment Agreement, dated April 22, 2019, by and among Central Federal Corporation, CFBank and Timothy T.
This compiled document has not been filed with the Delaware Secretary of State.] 3.12 Certificate of Designations to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K dated February 5, 2024, filed with the Commission on February 6, 2024 (File No. 0-25045)) 3.13 Second Amended and Restated Bylaws of the registrant (incorporated by reference to Exhibit 3.3 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, filed with the Commission on March 27, 2008 (File No. 0-25045)) 4.1 Form of Stock Certificate of Central Federal Corporation (incorporated by reference to Exhibit 4.0 to the registrant’s Registration Statement on Form SB-2 (File No. 333-64089), filed with the Commission on September 23, 1998) 4.2 Form of Subordinated Note Purchase Agreement by and between the Company and several Purchasers, dated December 20,2018 (incorporated by reference to Exhibit 10.1 to the registrants Current Report on Form 8-K dated December 20, 2018, filed with the Commission on December 21, 2018 (File No. 0-25045)) 4.3 Form of 7.0% Fixed-to-Floating Rate Subordinated Note due 2028 (incorporated by reference to Exhibit 10.2 to the registrants Current Report on Form 8-K dated December 20, 2018, filed with the Commission on December 21, 2018 (File No. 0-25045)) 4.4 Description of Capital Stock (incorporated by reference to Exhibit 4.4 to the registrant’s Form 10-K for the fiscal year ended December 31, 2023, filed with the Commission on March 29, 2024 (File No. 0-25045) 4.5 Agreement to furnish instruments defining rights of holders of long-term debt 10.1 * Central Federal Corporation 2009 Equity Compensation Plan (incorporated by reference to Appendix A to the registrant’s Definitive Proxy Statement filed with the Commission on March 31, 2009) 10.2 * First Amendment to the Central Federal Corporation 2009 Equity Compensation Plan (incorporated by reference to Appendix A to the registrant’s Definitive Proxy Statement filed with the Commission on April 11, 2013) 107 Table of Contents 10.3 * Form of Incentive Stock Option Award Agreement under the Central Federal Corporation 2009 Equity Compensation Plan (incorporated by reference to Exhibit 10.3 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed with the Commission on April 1, 2013 (File No. 0-25045) 10.4 * Form of Non-Qualified Stock Option Award Agreement under the Central Federal Corporation 2009 Equity Compensation Plan (incorporated by reference to Exhibit 10.4 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed with the Commission on April 1, 2013 (File No. 0-25045) 10.5 * Central Federal Corporation 2019 Equity Compensation Plan (incorporated by reference to Annex A to the registrant’s Definitive Proxy Statement filed with the Commission on April 26, 2019) 10.6 * First Amendment to the CF Bankshares Inc. 2019 Equity Incentive Plan 10.7 * Form of Employee Restricted Stock Award Agreement under the Central Federal Corporation 2019 Equity Compensation Plan (incorporated by reference to Exhibit 10.8 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Commission on March 16, 2020 (File No. 0-25045)) 10.8 * Form of Director Restricted Stock Award Agreement under the Central Federal Corporation 2019 Equity Compensation Plan (incorporated by reference to Exhibit 10.9 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Commission on March 16, 2020 (File No. 0-25045)) 10.9 * Employment Agreement, dated April 22, 2019, by and among Central Federal Corporation, CFBank and Timothy T.
The Holding Company is not considered the primary beneficiary of this trust (variable interest entity); therefore, the 92 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) trust is not consolidated in the Company’s financial statements, but rather the subordinated debentures are shown as a liability.
The Holding Company is not considered the primary beneficiary of this trust (variable interest entity); therefore, the 91 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) trust is not consolidated in the Company’s financial statements, but rather the subordinated debentures are shown as a liability.
The marketability of the underlying property also may be adversely affected in a rising interest rate environment. Cash flows are affected by changes in market interest rates. Generally, in rising interest rate environments, loan prepayment rates are likely to decline, and in falling interest rate environments, loan prepayment rates are likely to increase. 54 Table of Contents CF BANKSHARES INC.
The marketability of the underlying property also may be adversely affected in a rising interest rate environment. Cash flows are affected by changes in market interest rates. Generally, in rising interest rate environments, loan prepayment rates are likely to decline, and in falling interest rate environments, loan prepayment rates are likely to increase. 52 Table of Contents CF BANKSHARES INC.
Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would have totaled $ 473 at year-end 2023. However, if CFBank were wholly or partially liquidated or otherwise ceases to be a bank, or if tax laws were to change, this amount would have to be recaptured and a tax liability recorded.
Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would have totaled $ 473 at year-end 2024. However, if CFBank were wholly or partially liquidated or otherwise ceases to be a bank, or if tax laws were to change, this amount would have to be recaptured and a tax liability recorded.
Concentration of Credit Risk : Most of the Company’s primary business activity is with customers located within the Ohio counties of Franklin, Delaware, Hamilton, Cuyahoga and Summit and Marian County, Indiana and contiguous counties. Therefore, the Company’s exposure to credit risk can be affected by changes in the economies within these counties.
Concentration of Credit Risk : Most of the Company’s primary business activity is with customers located within the Ohio counties of Franklin, Delaware, Hamilton, Cuyahoga and Summit and Marion County, Indiana and contiguous counties. Therefore, the Company’s exposure to credit risk can be affected by changes in the economies within these counties.
Executive Officers of the Registrant. Information required by Item 401 of Regulation S-K with respect to our executive officers will be included in the section captioned “EXECUTIVE OFFICERS” in our 2024 Proxy Statement, which section is incorporated herein by reference. Compliance with Section 16(a) of the Exchange Act.
Executive Officers of the Registrant. Information required by Item 401 of Regulation S-K with respect to our executive officers will be included in the section captioned “EXECUTIVE OFFICERS” in our 2025 Proxy Statement, which section is incorporated herein by reference. Compliance with Section 16(a) of the Exchange Act.
There were no loans 90 days or more past due and still accruing interest at December 31, 2023 or December 31, 2022.
There were no loans 90 days or more past due and still accruing interest at December 31, 2023.
Information required by Item 405 of Regulation S-K will be included in the section captioned “BENEFICIAL OWNERSHIP OF COMPANY COMMON STOCK – DELINQUENT SECTION 16(a) REPORTS” in our 2024 Proxy Statement, which section is incorporated herein by reference. Code of Ethics.
Information required by Item 405 of Regulation S-K will be included in the section captioned “BENEFICIAL OWNERSHIP OF COMPANY COMMON STOCK – DELINQUENT SECTION 16(a) REPORTS” in our 2025 Proxy Statement, which section is incorporated herein by reference. Code of Ethics.
Information required by Items 407(c)(3), (d)(4) and (d)(5) of Regulation S-K will be included in the section captioned “CORPORATE GOVERNANCE – Board Meetings and Committees” in our 2024 Proxy Statement, which section is incorporated herein by reference.
Information required by Items 407(c)(3), (d)(4) and (d)(5) of Regulation S-K will be included in the section captioned “CORPORATE GOVERNANCE – Board Meetings and Committees” in our 2025 Proxy Statement, which section is incorporated herein by reference.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria for effective internal control over financial reporting as described in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria for effective internal control over financial reporting as described in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
(the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).
(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
O’Dell (incorporated by reference to Exhibit 10.12 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Commission on March 31, 2023 (File No. 0-25045)) 10.13 * Deferred Cash Incentive Agreement, dated as of August 23, 2021, by and between CFBank and Bradley Ringwald (incorporated by reference to Exhibit 10.13 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Commission on March 31, 2023 (File No. 0-25045)) 10.14 * Deferred Cash Incentive Agreement, dated as of August 23, 2021, by and between CFBank and Kevin Beerman (incorporated by reference to Exhibit 10.14 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Commission on March 31, 2023 (File No. 0-25045)) 21.1 Subsidiaries of the Registrant 23.1 Consent of Independent Registered Public Accounting Firm 31.1 Rule 13a-14(a) Certifications of the Chief Executive Officer 31.2 Rule 13a-14(a) Certifications of the Principal Financial Officer 32.1 Section 1350 Certifications of the Chief Executive Officer and Principal Financial Officer 97 Clawback Policy 101.1 Interactive Data File ( Inline XBRL) 104 Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101 *Management contract or compensation plan or arrangement identified pursuant to Item 15 of Form 10-K ‎ 109 Table of Contents SIGN ATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorize CF BANKSHARES INC. /s/ Timothy T.
O’Dell (incorporated by reference to Exhibit 10.12 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Commission on March 31, 2023 (File No. 0-25045)) 10.16 * Deferred Cash Incentive Agreement, dated as of August 23, 2021, by and between CFBank and Bradley Ringwald (incorporated by reference to Exhibit 10.13 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Commission on March 31, 2023 (File No. 0-25045)) 10.17 * Deferred Cash Incentive Agreement, dated as of August 23, 2021, by and between CFBank and Kevin Beerman (incorporated by reference to Exhibit 10.14 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Commission on March 31, 2023 (File No. 0-25045)) 21.1 Subsidiaries of the Registrant 19 Insider Trading Policy 23.1 Consent of Independent Registered Public Accounting Firm 31.1 Rule 13a-14(a) Certifications of the Chief Executive Officer 31.2 Rule 13a-14(a) Certifications of the Principal Financial Officer 32.1 Section 1350 Certifications of the Chief Executive Officer and Principal Financial Officer 97 Clawback Policy (incorporated by reference to Exhibit 97 to the registrant’s Form 10-K for the fiscal year ended December 31, 2023, filed with the Commission on March 29, 2024 (File No. 0-25045) 108 Table of Contents 101.1 Interactive Data File ( Inline XBRL) 104 Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101 *Management contract or compensation plan or arrangement identified pursuant to Item 15 of Form 10-K ‎ 109 Table of Contents SIGN ATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorize CF BANKSHARES INC. /s/ Timothy T.
Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied.
Revenue is recognized when our performance obligation is completed, which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payments for such performance obligations are generally received at the time the performance obligations are satisfied.
The Company is subject to U.S. federal income tax and is no longer subject to federal examination for years prior to 2020. Our deferred tax assets are composed of U.S. net operating losses (“NOLs”), and other temporary book to tax differences.
The Company is subject to U.S. federal income tax and is no longer subject to federal examination for years prior to 2021. Our deferred tax assets are composed of U.S. net operating losses (“NOLs”), and other temporary book to tax differences.
All values are within the acceptable range established by CFBank’s Board of Directors. 53 Table of Contents Economic Value of Equity as a Percent of Assets (CFBank only) Basis Point Economic Change in Rates Value Ratio +400 7.9% +300 8.5% +200 9.0% +100 9.6% 0 10.2% -100 10.8% -200 11.4% -300 12.1% -400 12.3% In evaluating CFBank’s exposure to interest rate risk, certain limitations inherent in the method of analysis presented in the foregoing table must be considered.
All values are within the acceptable range established by CFBank’s Board of Directors. 51 Table of Contents Economic Value of Equity as a Percent of Assets (CFBank only) Basis Point Economic Change in Rates Value Ratio +400 9.4% +300 9.7% +200 10.1% +100 10.5% 0 10.9% -100 11.3% -200 11.8% -300 12.3% -400 12.9% In evaluating CFBank’s exposure to interest rate risk, certain limitations inherent in the method of analysis presented in the foregoing table must be considered.
Loans listed as pass-rated are loans that are subject to internal loan reviews and are determined not to meet the criteria required to be classified as special mention, substandard, doubtful or loss. ‎ 82 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) The following table summarizes the risk grading of the Company’s loan portfolio by loan class and by year of origination for the years indicated as of December 31, 2023.
Loans listed as pass-rated are loans that are subject to internal loan reviews and are determined not to meet the criteria required to be classified as special mention, substandard, doubtful or loss. ‎ 81 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) The following table summarizes the risk grading of the Company’s loan portfolio by loan class and by year of origination for the years indicated as of December 31, 2024.
As of December 31, 2023, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.
As of December 31, 2024, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.
Public entities are required to disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. In addition, public entities must provide all annual disclosures about a reportable segment's profit or loss and assets currently required by FASB ASC Topic 280, Segment Reporting, in interim periods.
Public entities are required to disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. In addition, public entities must provide all annual disclosures about a reportable segment's profit or loss and assets currently required by ASC 280 in interim periods.
The following table summarizes securities with unrealized losses at December 31, 2023 and December 31, 2022 aggregated by major security type and length of time in a continuous unrealized loss position.
The following table summarizes securities with unrealized losses at December 31, 2024 and December 31, 2023 aggregated by major security type and length of time in a continuous unrealized loss position.
As of December 31, 2023, CFBank was well-capitalized under regulatory capital standards and was not subject to any adverse regulatory events specified in CFBank’s interest-rate swap instruments.
As of December 31, 2024, CFBank was well-capitalized under regulatory capital standards and was not subject to any adverse regulatory events specified in CFBank’s interest-rate swap instruments.
The unpaid principal balance is the contractual principal balance outstanding. The recorded investment is the unpaid principal balance adjusted for partial charge-offs, purchase premiums and discounts, deferred loan fees and costs. Cash payments of interest on these loans during the twelve months ended December 31, 2022 and 2021 totaled $ 47 and $ 169 , respectively.
The unpaid principal balance is the contractual principal balance outstanding. The recorded investment is the unpaid principal balance adjusted for partial charge-offs, purchase premiums and discounts, deferred loan fees and costs. Cash payments of interest on these loans during the twelve months ended December 31, 2022 totaled $ 47 .
At December 31, 2023, CFBank’s EVE ratios, using interest rate shocks ranging from a 400 bps rise in rates to a 400 bps decline in rates, are shown in the following table.
At December 31, 2024, CFBank’s EVE ratios, using interest rate shocks ranging from a 400 bps rise in rates to a 400 bps decline in rates, are shown in the following table.
Amounts in parentheses indicate a reduction of other comprehensive income. (2) There were no amounts reclassified out of other comprehensive income for the years ended December 31, 2023, 2022 and 2021.
Amounts in parentheses indicate a reduction of other comprehensive income. (2) There were no amounts reclassified out of other comprehensive income for the years ended December 31, 2024, 2023 and 2022.
Information required by Item 401 of Regulation S-K with respect to our directors will be included in the section captioned “PROPOSAL 1 – ELECTION OF DIRECTORS” of our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission (the “Commission” or the “SEC”) pursuant to SEC Regulation 14A (the “2024 Proxy Statement”), which section is incorporated herein by reference.
Information required by Item 401 of Regulation S-K with respect to our directors will be included in the section captioned “PROPOSAL 1 – ELECTION OF DIRECTORS” of our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission (the “Commission” or the “SEC”) pursuant to SEC Regulation 14A (the “2025 Proxy Statement”), which section is incorporated herein by reference.
Life Insurance Benefits: CFBank has entered into agreements with certain employees, former employees and directors to provide life insurance benefits which are funded through life insurance policies purchased and owned by CFBank. The expense related to these benefits totaled ($ 12 ), ($ 3 ) and $ 13 in 2023, 2022 and 2021, respectively.
Life Insurance Benefits: CFBank has entered into agreements with certain employees, former employees and directors to provide life insurance benefits which are funded through life insurance policies purchased and owned by CFBank. The expense related to these benefits totaled ($ 12 ), ($ 12 ) and ($ 3 ) in 2024, 2023 and 2022, respectively.
Equity Compensation Plan Information Plan Category (a) ‎ Number of Common Shares to be issued upon exercise of all outstanding options, warrants and rights (a) (b) ‎ Weighted-average exercise price of outstanding options, warrants and rights (b) (c) ‎ Number of Common Shares remaining available for future issuance under equity compensation plans (excluding common shares reflected in column (a)) Equity compensation plans approved by shareholders - $ - 76,330 Equity compensation plans not approved by shareholders - - - Total - $ - 76,330 It em 13.
Equity Compensation Plan Information Plan Category (a) ‎ Number of Common Shares to be issued upon exercise of all outstanding options, warrants and rights (a) (b) ‎ Weighted-average exercise price of outstanding options, warrants and rights (b) (c) ‎ Number of Common Shares remaining available for future issuance under equity compensation plans (excluding common shares reflected in column (a)) Equity compensation plans approved by shareholders - $ - 203,065 Equity compensation plans not approved by shareholders - - - Total - $ - 203,065 It em 13.
Effective as of July 27, 2020, the Company changed its name from Central Federal Corporation to CF Bankshares Inc. The Holding Company and CFBank are sometimes collectively referred to herein as the “Company”. Intercompany transactions and balances are eliminated in consolidation.
Effective as of July 27, 2020, the Company changed its name from Central Federal Corporation to CF Bankshares Inc. The Holding Company and CFBank are sometimes collectively referred to herein as the “Company.” Intercompany transactions and balances are eliminated in consolidation.
The amendments in the ASU are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss.
The amendments in the ASU are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss.
Based on that evaluation, management concluded that our internal controls over financial reporting as of December 31, 2023 were effective. Management’s Report on Internal Control Over Financial Reporting. Information required by Item 308 of Regulation S-K is included on page 56 of this Form 10-K; the information appears under the caption “Management’s Report on Internal Control over Financial Reporting”.
Based on that evaluation, management concluded that our internal controls over financial reporting as of December 31, 2024 were effective. Management’s Report on Internal Control Over Financial Reporting. Information required by Item 308 of Regulation S-K is included on page 54 of this Form 10-K; the information appears under the caption “Management’s Report on Internal Control over Financial Reporting”.
NOTE 22 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes within each classification of accumulated other comprehensive income, net of tax, for the years ended December 31, 2023, 2022 and 2021 and summarizes the significant amounts reclassified out of each component of accumulated other comprehensive income: Changes in Accumulated Other Comprehensive Income by Component For the Year Ended December 31, 2023, 2022 and 2021 (1) Unrealized Gains and Losses on Available-for-Sale Securities 2023 2022 2021 Accumulated other comprehensive gain (loss), beginning of period $ ( 2,037 ) $ ( 170 ) $ 96 Other comprehensive gain (loss) before reclassifications ( 253 ) ( 1,867 ) ( 266 ) Less amount reclassified from accumulated other comprehensive loss (2) - - - Net current-period other comprehensive income (loss) ( 253 ) ( 1,867 ) ( 266 ) Accumulated other comprehensive income (loss), end of period $ ( 2,290 ) $ ( 2,037 ) $ ( 170 ) (1) All amounts are net of tax.
NOTE 22 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes within each classification of accumulated other comprehensive income, net of tax, for the years ended December 31, 2024, 2023 and 2022 and summarizes the significant amounts reclassified out of each component of accumulated other comprehensive income: Changes in Accumulated Other Comprehensive Income by Component For the Year Ended December 31, 2024, 2023 and 2022 (1) Unrealized Gains and Losses on Available-for-Sale Securities 2024 2023 2022 Accumulated other comprehensive loss, beginning of period $ ( 2,290 ) $ ( 2,037 ) $ ( 170 ) Other comprehensive gain (loss) before reclassifications 487 ( 253 ) ( 1,867 ) Less amount reclassified from accumulated other comprehensive loss (2) - - - Net current-period other comprehensive income (loss) 487 ( 253 ) ( 1,867 ) Accumulated other comprehensive loss, end of period $ ( 1,803 ) $ ( 2,290 ) $ ( 2,037 ) (1) All amounts are net of tax.
O’Dell Timothy T. O’Dell President and Chief Executive Officer Date: March 28, 2024 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Title Date /s/ Timothy T.
O’Dell Timothy T. O’Dell President and Chief Executive Officer Date: March 14, 2025 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Title Date /s/ Timothy T.
Approximately $ 225.1 million of that amount was held by either the Federal Reserve Bank or the Federal Home Loan Bank of Cincinnati, which is not federally insured. Interest-Bearing Deposits in Other Financial Institutions : Interest-bearing deposits in other financial institutions mature in April, 2025 and are carried at cost.
Approximately $ 218.8 million of that amount was held by either the Federal Reserve Bank or the Federal Home Loan Bank of Cincinnati, which is not federally insured. Interest-Bearing Deposits in Other Financial Institutions : Interest-bearing deposits in other financial institutions mature in April, 2025 and are carried at cost.
Total expense for matching contributions for 2023, 2022 and 2021 was $ 92 , $ 301 and $ 343 , respectively. Salary Continuation Agreement: In 2004, CFBank entered into a nonqualified salary continuation agreement with its former Chairman Emeritus. Benefits provided under the plan are unfunded, and payments are made by CFBank.
Total expense for matching contributions for 2024, 2023 and 2022 was $ 170 , $ 92 and $ 301 , respectively. Salary Continuation Agreement: In 2004, CFBank entered into a nonqualified salary continuation agreement with its former Chairman Emeritus. Benefits provided under the plan are unfunded, and payments are made by CFBank.
Our independent registered public accounting firm is FORVIS, LLP, Indianapolis, Indiana(PCAOB Auditor Firm ID 686 ). Information required by this Item 14 will be included in the section captioned “AUDIT COMMITTEE MATTERS” in our 2024 Proxy Statement, which section is incorporated herein by reference. ‎ 106 Table of Contents PA RT IV Ite m 15.
Our independent registered public accounting firm is Forvis Mazars, LLP, Indianapolis, Indiana (PCAOB Auditor Firm ID 686 ). Information required by this Item 14 will be included in the section captioned “AUDIT COMMITTEE MATTERS” in our 2025 Proxy Statement, which section is incorporated herein by reference. ‎ 105 Table of Contents PA RT IV Ite m 15.
Deferred Cash Incentive Agreements: CFBank has entered into agreements with certain officers to provide deferred cash compensation as an incentive and reward for the success of CFBank. The expense related to these benefits totaled $ 129 , $ 262 , and $ 118 in 2023, 2022 and 2021, respectively.
Deferred Cash Incentive Agreements: CFBank has entered into agreements with certain officers to provide deferred cash compensation as an incentive and reward for the success of CFBank. The expense related to these benefits totaled $ 134 , $ 129 , and $ 262 in 2024, 2023 and 2022, respectively.
The notional amount of the interest-rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest-rate swap agreements.
Hedge accounting is not applied. The notional amount of the interest-rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest-rate swap agreements.
At December 31, 2023, CFBank had $ 3,394 in cash pledged as collateral for these derivatives. Should the liability increase beyond the collateral value, CFBank may be required to pledge additional collateral. Additionally, CFBank’s interest-rate swap instruments contain provisions that require CFBank to remain well capitalized under regulatory capital standards and to comply with certain other regulatory requirements.
At December 31, 2024, CFBank had $ 2,128 in cash pledged as collateral for these derivatives. Should the liability increase beyond the collateral value, CFBank may be required to pledge additional collateral. Additionally, CFBank’s interest-rate swap instruments contain provisions that require CFBank to remain well capitalized under regulatory capital standards and to comply with certain other regulatory requirements.
Under the plan, CFBank pays him, or his beneficiary, a benefit of $ 25 annually for 20 years, beginning 6 months after his retirement date, which was February 28, 2008. The expense related to this plan totaled $ 5 , $ 6 , and $ 7 in 2023, 2022 and 2021, respectively.
Under the plan, CFBank pays him, or his beneficiary, a benefit of $ 25 annually for 20 years, beginning six months after his retirement date, which was February 28, 2008. The expense related to this plan totaled $ 4 , $ 5 , and $ 6 in 2024, 2023 and 2022, respectively.
Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
The mortgage servicing rights on these loans were immaterial at December 31, 2023 and 2022.
The mortgage servicing rights on these loans were immaterial at December 31, 2024 and 2023.
Additionally, any distributions in excess of CFBank’s current or accumulated earnings and profits would reduce amounts allocated to its bad debt reserve and create a tax liability for CFBank. ‎ 95 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) NOTE 14 – RELATED-PARTY TRANSACTIONS Loans to principal officers, directors, and their affiliates during 2023 and 2022 were as follows: Year ended December 31, 2023 2022 Beginning balance $ 8,298 $ 10,137 New loans 15,604 1,189 Repayments ( 514 ) ( 3,028 ) Ending balance $ 23,388 $ 8,298 All loans to related parties were made by CFBank in the ordinary course of business under terms equivalent to those prevailing in the market for arm’s length transactions at the time of origination.
Additionally, any distributions in excess of CFBank’s current or accumulated earnings and profits would reduce amounts allocated to its bad debt reserve and create a tax liability for CFBank. ‎ 94 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) NOTE 14 – RELATED-PARTY TRANSACTIONS Loans to principal officers, directors, and their affiliates during 2024 and 2023 were as follows: Year ended December 31, 2024 2023 Beginning balance $ 23,388 $ 8,298 New loans 4,532 15,604 Repayments ( 4,604 ) ( 514 ) Ending balance $ 23,316 $ 23,388 All loans to related parties were made by CFBank in the ordinary course of business under terms equivalent to those prevailing in the market for arm’s length transactions at the time of origination.
Net cash flows are reported for customer loan and deposit transactions, interest-bearing deposits in other financial institutions and borrowings with original maturities under 90 days. Cash in Excess of FDIC Limits: At December 31, 2023, the Company’s cash accounts exceeded federally insured limits by approximately $ 229.1 million.
Net cash flows are reported for customer loan and deposit transactions, interest-bearing deposits in other financial institutions and borrowings with original maturities under 90 days. Cash in Excess of FDIC Limits: At December 31, 2024, the Company’s cash accounts exceeded federally insured limits by approximately $ 226.9 million.
Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on loans held for investment. None of these loans were 90 days or more past due or on nonaccrual as of December 31, 2023 or December 31, 2022.
Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on loans held for investment. No ne of these loans were 90 days or more past due or on nonaccrual as of December 31, 2024 or December 31, 2023.
NOTE 13 – INCOME TAXES Income tax expense was as follows: December 31, 2023 December 31, 2022 December 31, 2021 Current federal $ 3,592 $ 4,213 $ 3,592 Deferred federal (1) 456 215 773 Total $ 4,048 $ 4,428 $ 4,365 (1) Includes tax benefit of operating loss carryforwards of $ 34 , $ 34 , and $ 34 for the years ended December 31, 2023, 2022 and 2021, respectively.
NOTE 13 – INCOME TAXES Income tax expense was as follows: December 31, 2024 December 31, 2023 December 31, 2022 Current federal $ 3,122 $ 3,592 $ 4,213 Deferred federal (1) ( 365 ) 456 215 Total $ 2,757 $ 4,048 $ 4,428 (1) Includes tax benefit of operating loss carryforwards of $ 34 , $ 34 , and $ 34 for the years ended December 31, 2024, 2023 and 2022, respectively.
The accrual for CFBank’s obligation under these agreements is included in accrued interest payable and other liabilities in the consolidated balance sheets and totaled $ 126 at year-end 2023 and $ 139 at year-end 2022.
The accrual for CFBank’s obligation under these agreements is included in accrued interest payable and other liabilities in the consolidated balance sheets and totaled $ 115 at year-end 2024 and $ 126 at year-end 2023.
The accrual for CFBank’s obligation under these agreements is included in accrued interest payable and other liabilities in the consolidated balance sheets and totaled $ 509 at year-end 2023 and $ 380 at year-end 2022.
The accrual for CFBank’s obligation under these agreements is included in accrued interest payable and other liabilities in the consolidated balance sheets and totaled $ 617 at year-end 2024 and $ 509 at year-end 2023.
The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan.
The Pentegra DB Plan is a tax-qualified defined-benefit pension plan. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan.
O’Dell Director, President and Chief Executive Officer March 28, 2024 Timothy T. O’Dell /s/ Kevin J. Beerman Executive Vice President and Chief Financial Officer March 28, 2024 Kevin J. Beerman /s/ Robert E. Hoeweler Chairman March 28, 2024 Robert E. Hoeweler /s/ Thomas P. Ash Director March 28, 2024 Thomas P. Ash /s/ James H.
O’Dell Director, President and Chief Executive Officer March 14, 2025 Timothy T. O’Dell /s/ Kevin J. Beerman Executive Vice President and Chief Financial Officer March 14, 2025 Kevin J. Beerman /s/ Robert E. Hoeweler Chairman March 14, 2025 Robert E. Hoeweler /s/ Thomas P. Ash Director March 14, 2025 Thomas P. Ash /s/ James H.
Future Accounting Matters: In March 2023, the FASB issued ASU No. 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using Proportional Amortization Method. The ASU is intended to improve the accounting and disclosures for investments in tax credit structures.
In March 2023, the FASB issued ASU No. 2023-02, “Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using Proportional Amortization Method.” This ASU is intended to improve the accounting and disclosures for investments in tax credit structures.
Descriptions of our revenue-generating activities that are within the scope of ASC 606, which are presented in our income statements as components of noninterest income, are as follows: Service charges on deposit accounts - these represent general service fees for monthly account maintenance and activity, or transaction-based fees, and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue.
Descriptions of revenue-generating activities which are presented in our Consolidated Statements of Income as components of Noninterest income are as follows: Service charges on deposit accounts - these represent general service fees for monthly account maintenance and activity, or transaction-based fees, and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue.
Interest on any principal amounts outstanding from time to time under these lines accrues daily at a variable rate based on the commercial bank’s cost of funds and current market returns . There were no outstanding borrowings with the FRB at December 31, 2023 and December 31, 2022.
There were no outstanding borrowings on either line at December 31, 2024 and December 31, 2023. Interest on any principal amounts outstanding from time to time under these lines accrues daily at a variable rate based on the commercial bank’s cost of funds and current market returns .
CFBank was party to interest-rate swaps with a combined notional amount of $ 81,858 , $ 42,177 and $ 44,887 at December 31, 2023, 2022 and 2021, respectively. The counterparty to CFBank’s interest-rate swaps is exposed to credit risk whenever the interest-rate swaps are in a liability position.
CFBank was party to interest-rate swaps with a combined notional amount of $ 92,818 , $ 81,858 and $ 42,177 at December 31, 2024, 2023 and 2022, respectively. The counterparty to CFBank’s interest-rate swaps is exposed to credit risk whenever the interest-rate swaps are in a liability position.
Form 10-K Summary Not Applicable ‎ 107 Table of Contents EXHIBIT INDEX Exhibit No.
Form 10-K Summary Not Applicable ‎ 106 Table of Contents EXHIBIT INDEX Exhibit No.
NOTE 3 – SECURITIES The following tables summarize the amortized cost and fair value of the available-for-sale securities portfolio at December 31, 2023 and December 31, 2022 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income (loss): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2023 Corporate debt $ 9,980 $ - $ 2,880 $ 7,100 Issued by U.S. government-sponsored entities and agencies: U.S.
NOTE 3 – SECURITIES The following tables summarize the amortized cost and fair value of the available-for-sale securities portfolio at December 31, 2024 and December 31, 2023 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income (loss): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2024 Corporate debt $ 9,983 $ - $ 2,283 $ 7,700 Issued by U.S. government-sponsored entities and agencies: U.S.
Because the decline in fair value was attributable to changes in market conditions, and not credit quality, and because the Company did not have the intent to sell these securities and would unlikely be required to sell these securities before their anticipated recovery, the Company did not consider these securities to be impaired at December 31, 2023 and December 31, 2022.
Because the declines in fair value were attributable to changes in market conditions, and not credit quality, and because the Company did not have the intent to sell these securities and would unlikely be required to sell these securities before their anticipated recovery, the Company did not consider these securities to be impaired at December 31, 2024 and December 31, 2023.

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