CF Bankshares Inc.

What they do

CFBank was originally organized in 1892 and is a national bank. It makes commercial loans and residential mortgage loans and funds them with deposits, including noninterest-bearing business deposits. The holding company became a registered bank holding company supervised by the Federal Reserve in 2016 and changed its name from Central Federal Corporation to CF Bankshares Inc. in July 2020.

Revenue drivers

• Commercial lending — Largest balance sheet category. For Q2 2026, average loans and leases and loans held for sale were $1.76 billion, earning a 6.24% yield and generating $27.5 million of interest income; commercial loan fundings were $135 million in the quarter.
• Deposits and net interest margin — Average deposits were $1.49 billion in Q2 2026 at a 3.71% cost, producing net interest income of $14.8 million and a 2.93% net interest margin.
• Noninterest income (fees) — Q2 2026 noninterest income rose $214,000, or 14%, over Q1 2026, driven by a $184,000 increase in Swap Fees and a $78,000 increase in Customer Fees including Treasury Management.
• Securities and other earning assets — Q2 2026 average securities were $17.4 million at a 3.62% yield, other earning assets were $236.1 million at 3.72%, and FHLB/FRB stock was $8.4 million at 6.74%.

Recent performance

Q2 2026 net income was $5.9 million, or $0.90 per diluted common share, up 18% from Q1 2026 net income of $5.0 million ($0.77 per share) and equal to Q2 2025 net income of $5.0 million ($0.77 per share). Q2 2026 results included $944,000 of provision expense; pre-provision, pre-tax net revenue was $8.2 million, up 26% from $6.5 million in Q1 2026. Net interest margin was 2.93%, up 24 basis points from the prior quarter. ROE was 12.31% and ROA was 1.11% for Q2 2026, with the efficiency ratio improving to 50.4% from 56.1%. Book value per share was $29.04 at June 30, 2026.

Strategy

Management is adding size and scale to the commercial bank while reducing low-rate residential mortgage portfolio loans. It is expanding commercial banking regional teams across the footprint and building business banking and commercial loan pipelines. Treasury Management is focused on sourcing low-cost deposits from businesses that hold large balances, and the bank is setting deposit-level requirements for borrowers in response to competitive loan pricing. Management also cites loan rate floors and commercial loan swaps as tools for sustaining commercial loan yields, and expects residential mortgage salable loan volumes to add fee income.

Risks

• Net interest margin pressure — Management states NIM is expected to remain a challenge; Q2 2026 NIM was 2.93% and the cost of interest-bearing liabilities was 3.79%.
• Provision expense and credit risk — Q2 2026 earnings included $944,000 of provision expense, which the company disclosed alongside net income of $5.9 million.
• Competitive loan pricing — Management says it has begun responding to increasingly competitive market loan pricing by setting corresponding deposit level requirements with borrowers.
• Low-rate residential mortgage portfolio — The company is reducing low-rate residential mortgage loans because funding them increases its incremental cost of funds, per management commentary.

Outlook

Management expects increasing size and scale, supported by commercial loan pipelines, to be accretive to core earnings in the second half of 2026. It expects commercial loan swaps to continue lifting noninterest fee income and expanded residential mortgage salable loan volumes to add fee income in the second half. NIM is expected to remain a challenge, and Treasury Management will focus on sourcing low-cost business deposits. CFBank's capital position was reported as a Tier 1 Leverage Ratio of 11.64% and a Total Capital Ratio of 14.76%.