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CB

CF BANKSHARES INC. (CFBK)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 EPS was $0.68 with net income of $4.4M; management noted results were net of an estimated ~$1M after-tax impact from additional credit loss reserves, while PPNR rose 12% sequentially to $6.5M .
  • Net interest income increased 9.4% q/q to $12.5M as NIM expanded 16 bps to 2.57%, driven by a 30 bps reduction in the average rate paid on interest-bearing liabilities (third consecutive quarter of NIM expansion) .
  • Noninterest income grew 40% y/y to $1.45M on stronger deposit service fees; noninterest-bearing deposits rose $38M y/y (16%) and deposit fees rose ~60% for FY24 .
  • Asset quality mixed: NPLs were 0.85% of loans (vs. 0.33% in Q4’23), loans 30+ DPD rose to $12.1M (from $7.7M in Q3), and provision increased to $1.38M (from $0.56M in Q3) due to reserves on two commercial participations .
  • Capital returns strengthened: common dividend raised to $0.07 (Jan 2025) and a new stock repurchase program up to 325,000 shares (~5% of shares) authorized on Feb 4, 2025—both potential stock-supportive catalysts alongside sustained NIM expansion .

What Went Well and What Went Wrong

What Went Well

  • NIM inflected for a third straight quarter to 2.57% (+16 bps q/q) as deposit costs fell 30 bps; net interest income rose ~$1.0M q/q to $12.5M .
  • Fee momentum continued: noninterest income +40% y/y to $1.45M on deposit service fees (+$181K y/y in Q4; +60% for FY24), with Q4 loans sold notional up markedly y/y [$15.7M vs. $2.0M] .
  • Mix improved: noninterest-bearing deposits grew $38M (16%) in 2024, supporting lower funding costs and reinforcing treasury management strategy; ROA 0.86% and ROE 10.61% reflect stabilized performance .
  • CEO: “Fourth Quarter 2024 Net Income was $4.4 million, which is net of a $1 million after-tax impact from additional Credit Loss Reserves…results reflect improving results and stabilized performance achieved through ongoing operating adjustments” .

What Went Wrong

  • Credit costs rose: provision for credit losses increased to $1.38M (from $0.56M in Q3) on added reserves for two commercial loan participations; loans 30+ DPD climbed to $12.1M (from $7.7M in Q3) .
  • Asset quality headwinds persisted y/y: NPLs reached 0.85% of loans vs. 0.33% a year ago; ACL coverage declined from 1.13% in Q2 to 1.00% in Q4 as balances shifted and prior-quarter charge-offs ran through .
  • Swap fee income fell q/q (-$183K), softening total noninterest income sequentially; select noninterest expense lines (loan expense, professional fees) increased q/q .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Net Interest Income ($MM)$11.754 $11.367 $11.460 $12.533
Noninterest Income ($MM)$1.033 $1.218 $1.606 $1.446
PPNR ($MM)$6.042 $5.493 $5.840 $6.546
Provision for Credit Losses ($MM)$0.875 $3.561 $0.558 $1.381
Net Income ($MM)$4.235 $1.695 $4.205 $4.417
Diluted EPS ($)$0.65 $0.26 $0.65 $0.68
Net Interest Margin (%)2.44% 2.39% 2.41% 2.57%
Efficiency Ratio (%)52.75% 56.35% 55.30% 53.17%
ROA (%)0.84% 0.34% 0.84% 0.86%
ROE (%)11.02% 4.23% 10.38% 10.61%

Segment/KPI Breakdowns

Deposits mix and uninsured exposure:

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Noninterest-Bearing Deposits ($000s)$235,916 $217,771 $257,715 $273,668
Interest-Bearing Deposits ($000s)$1,508,141 $1,478,705 $1,487,861 $1,482,127
Total Deposits ($000s)$1,744,057 $1,696,476 $1,745,576 $1,755,795
% Balances > FDIC Limit29.2% 28.6% 30.2% 29.8%

Asset quality and loan metrics:

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Loans & Leases, Net ($000s)$1,694,133 $1,687,695 $1,717,075 $1,722,019
Nonperforming Loans ($000s)$5,722 $10,909 $14,597 $14,719
NPLs / Total Loans (%)0.33% 0.64% 0.84% 0.85%
ACL / Loans (%)0.99% 1.13% 0.97% 1.00%
Net Charge-offs ($000s)$623 $2,108 $3,291 $95
Annualized NCOs (%)0.15% 0.49% 0.77% 0.02%
Loans 30+ DPD ($000s)$2,000 $7,620 $7,700 $12,100

Loans sold (notional):

MetricQ4 2023Q3 2024Q4 2024
Notional Loans Sold ($000s)$1,990 $12,053 $15,670

Funding cost/asset yield:

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Avg Yield on Earning Assets (%)6.16% 6.16% 6.30% 6.16%
Avg Rate on Interest-Bearing Liab. (%)4.49% 4.57% 4.70% 4.40%

Guidance Changes

MetricPeriodPrevious Guidance/ActionCurrent Guidance/ActionChange
Common Dividend per ShareQ4 2024 → Q1 2025$0.06 quarterly (announced Oct 1, 2024) $0.07 quarterly (announced Jan 6, 2025) Raised (17%)
Share Repurchase AuthorizationThrough Jan 31, 2026N/ANew program up to 325,000 shares (~5% of outstanding) New authorization
Revenue/EPS/NIM/Expense Guidance2025Not provided in Q4 release/8-K Not provided Maintained (no formal guidance)

Earnings Call Themes & Trends

Note: No Q4 2024 earnings call transcript was available in our document set.

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
NIM and Funding CostsQ2: NIM +3 bps; rising funding costs pressure . Q3: NIM +2 bps; deposit cost +13 bps q/q; building NIB .NIM 2.57% (+16 bps q/q) on 30 bps lower cost of interest-bearing liabilities; third consecutive expansion .Improving
Deposits & Treasury Mgmt FeesQ2: Service charges +64% y/y; treasury mgmt leadership; NIB down q/q . Q3: NIB +18% q/q; core deposits +$57M; fees +65% y/y .NIB +$38M y/y; deposit fees +60% FY; Q4 fees +37% y/y .Improving
Credit Quality & ProvisionQ2: Provision $3.6M on two non-core loan participations; NPLs up . Q3: Provision $0.56M; NPLs 0.84%; NCOs $3.3M .Provision $1.38M on reserves for two commercial participations; NPLs 0.85%; 30+ DPD $12.1M .Mixed
Balance Sheet RepositioningQ2: Reduce residential mortgage; redirect to commercial growth . Q3: Strengthen regional teams; new Cleveland office; pipeline growth .Added proven bankers; deeper regional teams; continuing to outrun CRE construction payoffs moving to perm financing .Positive execution
Capital ReturnsQ2/Q3: $0.06 dividend .Dividend raised to $0.07; new 5% buyback .More shareholder-friendly

Management Commentary

  • “Fourth Quarter 2024 Net Income was $4.4 million, which is net of a $1 million after-tax impact from additional Credit Loss Reserves…Our fourth quarter results reflect improving results and stabilized performance achieved through ongoing operating adjustments made to our business and pricing models.” — Timothy T. O’Dell, President & CEO .
  • “NIM expanded by 16bps…Net Interest Income increased by roughly $1 million during the fourth quarter as compared to the third quarter.” — CEO .
  • “NIB deposits grew by $38 million, or 16%, during the year…Full year deposit-related service fee income increased nearly $1 million, up 60%.” — CEO .
  • Board Chair: “Our team is navigating through some of the most challenging and disruptive financial times…Our focus remains providing our customers with comprehensive solutions…while building long-term mutually beneficial relationships.” — Robert E. Hoeweler .

Q&A Highlights

  • An earnings call transcript for Q4 2024 was not available in our document set; therefore, Q&A themes and any guidance clarifications could not be assessed.

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 and FY 2024 was unavailable at time of retrieval due to access limits; as a result, we cannot assess beats/misses versus consensus for EPS or revenue at this time.
  • We will update vs. estimates comparisons once S&P Global consensus data is accessible.

Key Takeaways for Investors

  • The quarter showed clear core earnings traction: NIM expanded 16 bps q/q to 2.57% and net interest income rose 9.4% q/q, underpinned by a 30 bps reduction in funding costs—momentum that can continue if deposit mix improvements persist .
  • Fee income is scaling: deposit service fees are becoming a more material driver (+37% y/y in Q4; +60% in FY24), supporting revenue diversification beyond spread income .
  • Credit remains the watch item: provision lifted on two commercial participations; loans 30+ DPD rose to $12.1M and NPLs remain elevated y/y, though Q4 net charge-offs subsided to $95K after a heavy Q3—monitor reserve adequacy and migration closely .
  • Deposit quality improved: noninterest-bearing balances rose $38M y/y and uninsured balances remained stable ~30%—helpful for cost of funds and stability perceptions, especially amid a shifting rate backdrop .
  • Capital returns accelerate the bull case: dividend increased to $0.07 and a 5% buyback authorization provides incremental support to EPS and TBV per share if executed opportunistically .
  • Short-term trading: potential positive reaction to sustained NIM expansion and buyback; sensitivity to any incremental adverse credit developments or signs of fee softness (e.g., swaps) remains high .
  • Medium-term thesis: if management continues to lower funding costs, deepen treasury management relationships, and contain credit costs, ROA/ROE could continue to grind higher from Q4 levels (0.86%/10.61%) .

Sources: Q4 2024 earnings press release and financial tables ; 8-K Item 2.02 and Exhibit 99.1 (confirming release) -; prior quarters’ press releases for trend analysis (Q3 2024, Q2 2024) - -; dividend and buyback press releases .