CF BANKSHARES INC., PARENT OF CFBANK NA, REPORTS RESULTS FOR THE 1st QUARTER 2026

Commercial loan payoffs occurred early in, and steadily throughout, the quarter, while heavier loan fundings and net loan growth were concentrated in the final ten days of Q1. This timing dynamic of loan fundings, combined with elevated loan payoffs, impacted average loans outstanding during the quarter and resulted in lower interest income. We expect to see the interest income benefit of Q1 net loan growth beginning in the second quarter.

Commercial loan and deposit pipelines remain strong, underscoring our expectations for continued solid growth within the Commercial Bank. Scaling the Commercial Bank remains a top strategic objective. Recent loan fundings also include adding new full C&I banking relationships. Another key strategic objective is improving overall loan mix and diversification.

Our expanded CF Commercial Banking teams continue to demonstrate our ability to compete effectively with regional banks and other larger competitors to win high-quality banking relationships.

In addition to our focus on commercial loan and deposit growth, initiatives are underway to increase fee based (non‑interest) income. Q1 results reflected a 23% increase in overall non-interest income when compared to Q1 2025.  These initiatives include expanding residential mortgage salable loan volumes, increasing treasury management service fees, and utilizing interest rate swaps to grow non‑interest fee income. Going forward, we expect to see increasing earnings lift from our focused investment from these fee‑generating business activities.

NIM expanded modestly when compared to Q1 2025, while overcoming pressures from large Deposit Clients to receive greater Interest Income.

Overall business opportunities and pipelines remain robust. Our investment in increasing the depth of our regional market teams across Columbus, Cleveland, Cincinnati, and Indianapolis is paying off. We are attracting additional proven Business developers and proven Rainmakers.

With loan payoffs expected to decline in subsequent quarters, coupled with expected increases in deal flow driven by expanded production capacity from our deepened regional teams, we believe the table is set to add greater size and scale moving forward."

Robert E. Hoeweler, Chairman of the Board, added "We believe our Bank is particularly well positioned to leverage the strength of our Commercial Banking Team & Franchise to achieve scalable growth."

Overview of Results

Net income for the three months ended March 31, 2026 totaled $5.0 million (or $0.77 per diluted common share) compared to net income of $5.7 million (or $0.88 per diluted common share) for the three months ended December 31, 2025 and net income of $4.4 million (or $0.68 per diluted common share) for the three months ended March 31, 2025.  PPNR for the three months ended March 31, 2026 was $6.5 million compared to PPNR of $8.0 million for the three months ended December 31, 2025 and PPNR of $6.2 million for the three months ended March 31, 2025.

Net Interest Income and Net Interest Margin

Net interest income totaled $13.3 million for the quarter ended March 31, 2026 and decreased $1.0 million, or 7.0%, compared to $14.3 million for the prior quarter, and increased $411,000, or 3.2%, compared to $12.9 million for the first quarter of 2025.

The decrease in net interest income compared to the prior quarter was primarily due to a $1.9 million, or 6.4%, decrease in interest income, partially offset by a $934,000 decrease in interest expense.  The decrease in interest income was primarily attributed to a 31bps decrease in the average yield on interest-earning assets, coupled with a $26.6 million, or 1.3%, decrease in average interest-earning assets outstanding. During the quarter ended March 31, 2026, we placed a $5.0 million loan on nonaccrual status. The reversal of accrued interest on this loan resulted in a $528,000 decline in interest income during the quarter and a corresponding 11bps decline in NIM and the average yield on loans.  This loan is a non-core (non-customer) commercial loan. The decrease in interest expense when compared to the prior quarter was attributed to a 27bps decrease in the average rate on interest-bearing liabilities.   The net interest margin of 2.69% for the quarter ended March 31, 2026 decreased 16bps compared to the net interest margin of 2.85% for the prior quarter.

The increase in net interest income compared to the first quarter of 2025 was primarily due to a $1.5 million, or 9.1%, decrease in interest expense, partially offset by a $1.1 million, or 3.7%, decrease in interest income.  The decrease in interest expense was primarily attributed to a 50bps decrease in the average rate on interest-bearing liabilities, partially offset by a $56.6 million, or 3.6%, increase in average interest-bearing liabilities. The decrease in interest income was primarily attributed to a 30bps decrease in the average yield on interest-earning assets, partially offset by a $28.3 million, or 1.5%, increase in average interest-earning assets outstanding. As previously stated, during the quarter ended March 31, 2026, we placed a $5.0 million loan on nonaccrual status, which resulted in a $528,000 decline in interest income during the quarter and a corresponding 11bps decline in NIM and the average yield on loans.  The net interest margin of 2.69% for the quarter ended March 31, 2026 increased 5bps compared to the net interest margin of 2.64% for the first quarter of 2025.

Noninterest Income

Noninterest income for the three months ended March 31, 2026 totaled $1.5 million and increased $64,000, or 4.5%, compared to $1.4 million for the prior quarter. 

Noninterest income for the three months ended March 31, 2026 increased $281,000, or 23.3%, compared to $1.2 million for the three months ended March 31, 2025. The increase was primarily related to a $172,000 increase in service charges on deposit accounts.

The following table represents the notional amount of loans sold during the three months ended March 31, 2026, December 31, 2025, and March 31, 2025 (in thousands).

Noninterest Expense

Noninterest expense for the quarter ended March 31, 2026 totaled $8.3 million and increased $569,000, or 7.4%, compared to $7.7 million for the prior quarter.  The increase in noninterest expense was primarily due to a $545,000 increase in salaries and employee benefits. The increase in salaries and employee benefits was driven by a $352,000 increase in payroll tax expense and 401(k) match expense, which on a percentage basis are higher in the first quarter of the year.

Noninterest expense for the quarter ended March 31, 2026 increased $357,000, or 4.5%, compared to $8.0 million for the quarter ended March 31, 2025.  The increase in noninterest expense was primarily due to a $292,000 increase in advertising and promotion expense.  Advertising costs during the first quarter of 2026 were roughly double what we would expect going forward, as we tested several additional marketing campaigns.

Income Tax Expense

Income tax expense was $868,000 for the quarter ended March 31, 2026 (effective tax rate of 14.7%), compared to $1.1 million for the prior quarter (effective tax rate of 16.1%) and $1.1 million for the quarter ended March 31, 2025 (effective tax rate of 20.6%).

Loans and Loans Held For Sale

Gross loans and leases totaled $1.8 billion at March 31, 2026 and increased $23.4 million, or 1.3%, from December 31, 2025.  The increase in loans and leases balances from the prior quarter was primarily due to a $17.1 million increase in commercial real estate loan balances, an $8.7 million increase in commercial and industrial (C&I) loan balances, and an $8.3 million increase in construction loan balances, partially offset by a $10.5 million decrease in single-family residential loan balances.

The following table presents the principal balance outstanding of loans and leases for certain non-owner-occupied loan types (in thousands).

Asset Quality

Nonaccrual loans were $20.3 million, or 1.14% of total loans at March 31, 2026, an increase of $5.0 million from $15.3 million at December 31, 2025, and an increase of $5.8 million from $14.5 million at March 31, 2025.  The increase in nonperforming loans during the first quarter of 2026 included the addition of one non-core (non-customer) commercial and industrial (C&I) loan for $5.0 million. Of the $20.3 million of nonaccrual loans at March 31, 2026, $5.1 million was guaranteed by the SBA.

Loans 30 days or more past due totaled $17.5 million at March 31, 2026, compared to $12.9 million at December 31, 2025 and $11.4 million at March 31, 2025.  The increase in loans 30 days or more past due during the first quarter of 2026 was driven by the addition of the aforementioned non-core loan for $5.0 million.

The allowance for credit losses on loans and leases totaled $18.6 million at March 31, 2026, compared to $17.7 million at December 31, 2025 and $17.8 million at March 31, 2025.  The ratio of the allowance for credit losses on loans and leases to total loans and leases was 1.05% at March 31, 2026 compared to 1.01% at both December 31, 2025 and March 31, 2025. 

There was $604,000 in provision for credit losses expense for the quarter ended March 31, 2026, compared to $1.2 million for the quarter ended December 31, 2025 and $582,000 for the quarter ended March 31, 2025.  Net charge-offs for the quarter ended March 31, 2026 totaled $16,000, compared to net charge-offs of $131,000 for the prior quarter and net charge-offs of $23,000 for the quarter ended March 31, 2025.

Deposits

Deposits totaled $1.8 billion at March 31, 2026, an increase of $28.8 million, or 1.6%, from December 31, 2025, and an increase of $25.8 million, or 1.4%, from March 31, 2025.  The increase when compared to December 31, 2025 was primarily due to a $73.7 million increase in interest-bearing account balances, partially offset by a $44.9 million decrease in noninterest-bearing account balances.  The increase when compared to March 31, 2025 was primarily due to a $76.9 million increase in interest-bearing account balances, partially offset by a $51.2 million decrease in noninterest-bearing accounts balances.

At March 31, 2026, approximately 29.8% of our deposit balances exceeded the FDIC insurance limit of $250,000, as compared to approximately 29.5% at December 31, 2025 and approximately 31.1% at March 31, 2025.

Borrowings

FHLB advances and other debt totaled $101.0 million at March 31, 2026, compared to $101.0 million at December 31, 2025 and $92.7 million at March 31, 2025.  The increase when compared to March 31, 2025 was primarily due to a $10.0 million increase in the outstanding balance on the holding company credit facility.

Capital

Stockholders' equity totaled $189.0 million at March 31, 2026, an increase of $4.6 million, or 2.5%, when compared to $184.4 million at December 31 2025, and an increase of $16.3 million, or 9.4%, from $172.7 million at March 31, 2025.  The increase in total stockholders' equity during the three months ended March 31, 2026 was primarily attributed to net income, partially offset by $583,000 in dividend payments.

USE OF NON-GAAP FINANCIAL MEASURES

This earnings release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP").  Non-GAAP financial measures included in this earnings release include Pre-Provision, Pre-Tax Net Revenue (PPNR).  PPNR is defined as net interest income plus total non-interest income, excluding net gains and losses, minus total non-interest expense. This measure is a non- GAAP financial measure because it excludes the provision for (recovery of) credit losses and all gains and losses included in net income.  Management uses this "non-GAAP" financial measure in its analysis of the Company's performance and believes that this non-GAAP financial measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods and peers. 

Disclosures of non-GAAP financial measures should not be viewed as substitutes for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.  A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure is included at the end of this earnings release under the heading "GAAP TO NON-GAAP RECONCILIATION."

About CF Bankshares Inc. and CFBank

CF Bankshares Inc. (the "Company") is a bank holding company that owns 100% of the stock of CFBank, National Association ("CFBank"). 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. The current Leadership Team and Board recapitalized the Company and CFBank in 2012 during the financial crisis, repositioning CFBank as a full-service Commercial Bank model.

CFBank focuses on serving the financial needs of closely held businesses and entrepreneurs, by providing a comprehensive Commercial, Retail, and Mortgage Lending services presence. In all regional markets, CFBank provides commercial loans and equipment leases, commercial and residential real estate loans and treasury management depository services, residential mortgage lending, and full-service commercial and retail banking services and products.  CFBank is differentiated by our penchant for individualized service coupled with direct customer access to decision-makers, and ease of doing business. CFBank matches the sophistication of much larger banks, without the bureaucracy.

Additional information about the Company and CFBank is available at www.CF.Bank

FORWARD LOOKING STATEMENTS

This press release and other materials we have filed or may file with the Securities and Exchange Commission ("SEC") contain or may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Reform Act of 1995, which are made in good faith by us.  Forward-looking statements include, but are not limited to: (1) projections of revenues, income or loss, earnings or loss per common share, capital structure and other financial items; (2) plans and objectives of the management or Boards of Directors of the Company or CFBank; (3) statements regarding future events, actions or economic performance; and (4) statements of assumptions underlying such statements.  Words such as "estimate," "strategy," "may," "believe," "anticipate," "expect," "predict," "will," "intend," "plan," "targeted," and the negative of these terms, or similar expressions, are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.  Various risks and uncertainties may cause actual results to differ materially from those indicated by our forward-looking statements, including, without limitation those risks detailed from time to time in our reports filed with the SEC, including those risk factors identified in "Item 1A.  Risk Factors" of Part I of our Annual Report on Form 10-K filed with SEC for the year ended December 31, 2025.

Forward-looking statements are not guarantees of performance or results.  A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement.  We believe that we have chosen these assumptions or bases in good faith and that they are reasonable.  We caution you, however, that assumptions or bases almost always vary from actual results, and the differences between assumptions or bases and actual results can be material.  The forward-looking statements included in this press release speak only as of the date hereof.  We undertake no obligation to publicly release revisions to any forward-looking statements to reflect events or circumstances after the date of such statements, except to the extent required by law.