Executive Summary

Q1 2024 EPS declined sequentially to $0.47 (vs $0.65 in Q4 2023; $0.68 in Q1 2023) as elevated provision expense ($1.24M) and roughly $0.75M of nonrecurring items (payroll taxes and recruiting fees) weighed on results, while core earnings (PPNR $5.0M) remained solid .
Net interest margin was relatively stable at 2.36% (down 8 bps QoQ), with pressure from fewer days and lower loan fees; management “held the line” on deposit pricing amid competitors’ ultra-high money-market rates, helping maintain cost of funds .
Credit quality remains solid but normalizing: nonaccrual loans rose to $7.9M (0.46% of loans) and provision increased to $1.24M as reserves on an individually evaluated commercial loan were built; net recoveries were $16K in the quarter .
Potential stock catalysts: delivery of fee-income growth in Treasury Management and Mortgage Lending, continued NIM stabilization, and improved deposit mix (core deposits +$30.8M QoQ) could support sentiment if executed .

What Went Well and What Went Wrong

What Went Well
- Core deposit momentum and discipline on pricing: core deposits increased $30.8M QoQ as the bank “held the line” on rates despite competitive pressure; management emphasized maintaining overall cost of funds .
- PPNR remained healthy at $5.0M, underscoring core earning power despite seasonal and one-time headwinds .
- Strategic build-out continues: three senior commercial banking leaders added across Treasury Management, Central Ohio, and Indianapolis to drive growth and fee initiatives .
What Went Wrong
- Earnings pressure from credit costs and nonrecurring items: provision rose to $1.24M and about $0.75M of nonrecurring expenses (higher first‑quarter payroll taxes and recruiting fees) reduced quarterly profitability .
- NIM edged lower to 2.36% (–8 bps QoQ) reflecting fewer days and lower loan fees; efficiency ratio worsened to 58.96% vs 52.75% in Q4 2023 .
- Asset quality normalization continued: nonaccrual loans increased to $7.9M (0.46% of loans) from $5.7M (0.33%) in Q4, primarily tied to a handful of loans moving to nonaccrual; allowance coverage increased to 1.06% of loans .

Financial Results

Income statement and EPS vs prior periods

Metric	Q1 2023	Q4 2023	Q1 2024
Total interest income ($000)	$24,176	$29,712	$29,086
Total interest expense ($000)	$11,443	$17,958	$17,802
Net interest income ($000)	$12,733	$11,754	$11,284
Provision for credit losses ($000)	$237	$875	$1,237
Noninterest income ($000)	$719	$1,033	$905
Noninterest expense ($000)	$7,691	$6,745	$7,187
Net income ($000)	$4,448	$4,235	$3,070
Diluted EPS ($)	$0.68	$0.65	$0.47

Margins and ratios

Metric	Q1 2023	Q4 2023	Q1 2024
Net interest margin (FTE)	2.93%	2.44%	2.36%
Efficiency ratio	57.17%	52.75%	58.96%
ROA (annualized)	0.98%	0.84%	0.61%
ROE (annualized)	12.55%	11.02%	7.80%

Balance sheet and asset quality KPIs

Metric	Q1 2023	Q4 2023	Q1 2024
Loans & leases, net ($000)	$1,616,083	$1,694,133	$1,695,731
Total deposits ($000)	$1,603,841	$1,744,057	$1,723,070
Nonperforming loans ($000)	$718	$5,722	$7,895
NPLs / total loans	0.04%	0.33%	0.46%
ACL / total loans	0.98%	0.99%	1.06%
Net charge-offs (recoveries) ($000)	$5	$623	$(16)
Tier 1 leverage ratio	10.02%	9.76%	10.05%
Book value per share ($)	$21.88	$23.74	$24.17

Additional operating details

Loan production and sales: New commercial loan production was $37.3M; notional loans sold were $9.0M vs $2.0M in Q4 2023 .
Deposits mix: Core deposits +$28.5M QoQ, brokered deposits −$51.1M QoQ; ~29.8% of balances were above FDIC limits (vs 29.2% in Q4) .

Estimates comparison

Consensus EPS and revenue estimates from S&P Global were not available for comparison at the time of this analysis; therefore, no vs-consensus columns are shown. We will update when available.

Guidance Changes

The company did not issue formal quantitative guidance. Management provided qualitative commentary summarized below.

Metric	Period	Previous Guidance	Current Guidance	Change
Net interest margin	Near term	“Remain challenging; signs of improving stability” (Q4 commentary)	“Relatively stable; Q1 included fewer days and lower loan fees; cost of funds maintained”	Maintained (stabilizing)
Fee income	2024	Expected growth in Business credit cards and salable mortgage; swap fees to moderate in Q4	Expect growth from Treasury Management and Mortgage Lending initiatives	Maintained/Refocused
Loan growth/interest income	2024	Pipelines strong; loans +$34M in Q4	Expect interest income growth via higher pricing and refis; target lower net loan growth with better yields	Maintained (focus on yield)
Dividend	Ongoing	$0.06/share declared Jan 2024	$0.06/share declared Apr 8, 2024 (paid Apr 29)	Maintained

Earnings Call Themes & Trends

Note: A Q1 2024 earnings call transcript was not available; themes reflect management’s press release commentary and prior quarter releases.

Topic	Q3 2023 (Q-2)	Q4 2023 (Q-1)	Q1 2024 (Current)	Trend
NIM trajectory	“NIM reflecting greater stability”	Expect NIM to remain challenging but seeing improving stability	“NIM remained relatively stable”; Q1 affected by fewer days and lower loan fees	Stabilizing
Deposit mix/pricing	Low-cost deposit initiatives showing traction	Deposits +$59M QoQ; noninterest-bearing +$21.6M	Core deposits +$30.8M; disciplined pricing maintained vs ultra-high competitor rates	Improving core mix
Fee income strategy	Fee income expanded; growth in Business CC and mortgage; swap fees to moderate	Swap fees down QoQ; continuing to pursue fee lines	Targeting fee growth in Treasury Mgmt and Mortgage Lending	Building
Credit/CECL	Provision $1.2M; reserves on two loans; credit quality “strong”	Provision $875K; charge-offs $633K (trucking exposure <1%)	Provision $1.24M; nonaccruals $7.9M; ACL 1.06%; expect normalization	Normalizing; elevated provisioning
Talent and market expansion	Attracting top talent; building teams	Continuing to add talent; presence in 4 major metros	Added 3 key commercial leaders (Treasury Mgmt, Central OH, Indianapolis)	Continued investment
Loan growth & pricing	Pipelines strong	Loans +$34M QoQ	$37.3M new production; net growth muted by payoffs; pricing tailwind expected	Prudent growth; yield focus

Management Commentary

“Our Q1 results were impacted by $1.2 million of provision expense, coupled with approximately $750 thousand of other nonrecurring items including higher payroll tax expense… and recruiting fees. PPNR was $5.0 million for the quarter reflective of solid core earnings performance.”
“Our NIM for Q1 included some one-time impacts including fewer days along with lower loan fees… we held the line and successfully maintained our overall cost of funds.”
“We anticipate positive growth in interest income as new loan pricing is adjusted upward, plus existing loans refinancing at higher market rates… [requiring] lower net loan growth rates and… deploying less capital.”
“Going forward we believe our business initiatives will result in fee income growth. In particular, we see opportunities within our Treasury Management and Mortgage Lending lines of business.”
“Credit quality remains strong… We believe our industry, CFBank included, will return to more normalized levels of loan losses going forward.”

Q&A Highlights

No Q1 2024 earnings call transcript was available; therefore, no Q&A details to report [Search returned none; see absence of transcript in filings between Apr–Jun 2024].

Estimates Context

Wall Street consensus estimates (S&P Global) were unavailable for CFBK at the time of this analysis, so we cannot quantify beats/misses vs consensus. We will update when S&P Global consensus can be retrieved.

Key Takeaways for Investors

Earnings softer QoQ on credit costs and nonrecurring items, but core earnings (PPNR $5.0M) and stable NIM indicate resilient underlying profitability .
Deposit discipline and improving mix are notable positives amid aggressive competitor pricing; core deposits rose $30.8M QoQ while brokered balances declined $51.1M .
Asset quality is normalizing from very low loss levels; nonaccruals increased to 0.46% of loans and ACL rose to 1.06%—a prudent stance that should buffer potential losses .
Management sees interest income growth from repricing/refinancings even with lower net loan growth—favoring return on capital and margin protection over volume .
Fee-income initiatives (Treasury Management, Mortgage Lending) and recent senior hires are medium-term growth levers that can diversify revenues beyond spread income .
Capital remains solid (Tier 1 leverage 10.05%, Total capital 13.50%), supporting growth and continued $0.06/share dividend .
Near-term watch items: trajectory of NIM stabilization, pace of fee-income ramp, and resolution of newly nonaccrual loans—each a potential catalyst for multiple re-rating if executed well .

References

Q1 2024 earnings 8‑K and Exhibit 99.1 press release, including full financials and KPI tables .
Q4 2023 earnings 8‑K and press release for sequential comparisons .
Q3 2023 earnings 8‑K and press release for two‑quarter trend context .
Additional Q1 2024 press releases: three commercial leadership additions (Apr 23, 2024) and dividend declaration (Apr 8, 2024) .

CF BANKSHARES INC. (CFBK)·Q1 2024 Earnings Summary