EX-99.1 2 c01125exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
         
Exhibit 99.1
(CENTRAL FEDERAL CORPORATION LOGO)
PRESS RELEASE
     
FOR IMMEDIATE RELEASE:
  May 14, 2010
For Further Information:
  Mark S. Allio, Chairman, President and CEO
 
  Phone: 330.576.1334
 
  Fax: 330.666.7959
CENTRAL FEDERAL CORPORATION REVISES 1st QUARTER 2010 EARNINGS
Fairlawn, Ohio — May 14, 2010 — Central Federal Corporation (Nasdaq: CFBK) announced a revision to its previously announced first quarter 2010 earnings. The revision resulted in the Company posting a net loss for the quarter instead of a net profit, as originally announced. The revision was due to a $300,000 increase in the provision for loan losses. The revised net loss totaled $95,000, or $.05 per diluted common share for the quarter ended March 31, 2010, compared to a net loss of $246,000, or $.08 per diluted common share for the quarter ended March 31, 2009.
The Company revised its first quarter 2010 provision for loan losses to $748,000 from the previously announced $448,000. The increase was primarily related to a $1.8 million loan relationship. Subsequent to the Company’s announcement of its first quarter earnings, additional information regarding that loan relationship came to the attention of management which caused it to conclude that the loan was impaired at March 31, 2010. As a result of the impairment, a specific reserve for loan losses was applied. The additional provision increased the allowance for loan losses to $7.4 million, or 3.20% of total loans at March 31, 2010.
CFBank remains well-capitalized for regulatory purposes with a core capital ratio of 8.40% and total risk-based capital ratio of 12.20% as of March 31, 2010.
Revised financial statements are available as part of the Company’s Form 8-K filing on May 14, 2010 with the Securities and Exchange Commission, which can be accessed at http://www.sec.gov/edgar/searchedgar/companysearch.html or on the Company’s website at www.CFBankOnline.com.
About Central Federal Corporation and CFBank
Central Federal Corporation is the holding company for CFBank, a federally chartered savings association formed in Ohio in 1892. CFBank has four full-service banking offices in Fairlawn, Calcutta, Wellsville and Worthington, Ohio. Additional information about CFBank’s banking services and the Company is available at www.CFBankOnline.com.

 

 

 

Forward-Looking Information
Statements in this release that are not statements of historical fact are forward-looking statements. 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 Company, as defined below, or its management or Board of Directors; (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. Such differences could be caused by factors including, but not limited to: (i) changes in political, economic or other factors such as inflation rates, recessionary or expansive trends, and taxes; (ii) competitive pressures; (iii) fluctuations in interest rates; (iv) the level of defaults and prepayments on loans made by CFBank; (v) unanticipated litigation, claims or assessments; (vi) fluctuations in the cost of obtaining funds to make loans; and (vii) regulatory changes. Further information on these risk factors is included in the Company’s filings with the Securities and Exchange Commission. 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. The Company believes it has 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 release speak only as of the date they are made. 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.

 

 

 

Consolidated Statements of Operations
($ in thousands, except share data)
(unaudited)
                         
    Three months ended        
    March 31,        
    2010     2009     % change  
Total interest income
   $ 3,372     $ 3,730       -10 %
Total interest expense
     1,143       1,670       -32 %
 
                    
Net interest income
     2,229       2,060       8 %
Provision for loan losses
     748       550       n/m  
 
                    
Net interest income after provision for loan losses
     1,481       1,510       -2 %
Noninterest income
                       
Service charges on deposit accounts
     70       82       -15 %
Net gain on sales of loans
     150       152       -1 %
Net gain on sale of securities
     240       —       n/m  
Other
     50       52       -4 %
 
                    
Noninterest income
     510       286       78 %
 
                        
Noninterest expense
                        
Salaries and employee benefits
     1,053       1,046       1 %
Occupancy and equipment
     68       145       -53 %
Data processing
     155       156       -1 %
Franchise taxes
     93       86       8 %
Professional fees
     206       337       -39 %
Director fees
     26       34       -24 %
Postage, printing and supplies
     59       59       0 %
Advertising and promotion
     28       12       133 %
Telephone
     24       24       0 %
Loan expenses
     27       12       125 %
Depreciation
     131       119       10 %
FDIC premiums
     149       65       129 %
Amortization of intangibles
     10       —       n/m  
Other
     77       85       -9 %
 
                    
Noninterest expense
     2,106       2,180       -3 %
 
                        
Loss before income taxes
     (115 )     (384 )     n/m  
Income tax benefit
     (20 )     (138 )     n/m  
 
                    
Net loss
   $ (95 )   $ (246 )     n/m  
 
                    
Net loss available to common stockholders
   $ (197 )   $ (347 )     n/m  
 
                    
 
                        
Share Data
                        
Basic loss per common share
   $ (0.05 )   $ (0.08 )     -41 %
Diluted loss per common share
   $ (0.05 )   $ (0.08 )     -41 %
Cash dividends per common share
   $ —     $ —       n/m  
Average common shares outstanding — basic
     4,095,217       4,084,520          
Average common shares outstanding — diluted
     4,095,217       4,084,520          
n/m — not meaningful

 

 

 

Consolidated Statements of Financial Condition
($ in thousands)
(unaudited)
                                         
    March 31,     December 31,     September 30,     June 30,     March 31,  
    2010     2009     2009     2009     2009  
Assets
                                        
Cash and cash equivalents
   $ 23,707     $ 2,973     $ 9,400     $ 12,510     $ 12,329  
Securities available for sale
     23,238       21,241       22,824       22,700       22,529  
Loans held for sale
     1,586       1,775       943       5,995       1,642  
Loans
                                        
Single-family residential
     29,586       30,519       30,386       28,703       27,756  
Commercial, commercial real estate and multi-family
     180,677       181,629       180,746       181,921       186,492  
Consumer
     20,598       26,047       27,425       25,079       25,482  
 
                              
Total loans
     230,861       238,195       238,557       235,703       239,730  
Less allowance for loan losses
     (7,396 )     (7,090 )     (4,619 )     (3,996 )     (3,528 )
 
                              
Loans, net
     223,465       231,105       233,938       231,707       236,202  
Federal Home Loan Bank stock
     1,942       1,942       1,942       2,109       2,109  
Loan servicing rights
     82       88       91       97       105  
Foreclosed assets, net
     —       —       —       —       175  
Premises and equipment, net
     6,887       7,003       4,926       5,032       5,139  
Other intangible assets
     159       169       —       —       —  
Bank owned life insurance
     4,050       4,017       3,989       3,956       3,924  
Deferred tax asset
     —       —       —       2,064       1,657  
Accrued interest receivable and other assets
     3,488       3,429       2,373       2,232       3,481  
 
                              
Total assets
   $ 288,604     $ 273,742     $ 280,426     $ 288,402     $ 289,292  
 
                              
 
                                        
Liabilities and Stockholders’ Equity
                                        
Deposits
                                        
Noninterest bearing
   $ 20,171     $ 17,098     $ 16,458     $ 14,960     $ 15,108  
Interest bearing
     214,563       193,990       199,439       199,958       205,283  
 
                              
Total deposits
     234,734       211,088       215,897       214,918       220,391  
Short-term Federal Home Loan Bank advances
     —       2,065       —       —       —  
Long-term Federal Home Loan Bank advances
     23,942       29,942       30,942       33,942       28,200  
Advances by borrowers for taxes and insurance
     75       161       111       72       93  
Accrued interest payable and other liabilities
     1,953       2,104       2,919       2,265       2,531  
Subordinated debentures
     5,155       5,155       5,155       5,155       5,155  
 
                              
Total liabilities
     265,859       250,515       255,024       256,352       256,370  
 
                                        
Stockholders’ equity
     22,745       23,227       25,402       32,050       32,922  
 
                              
Total liabilities and stockholders’ equity
   $ 288,604     $ 273,742     $ 280,426     $ 288,402     $ 289,292  
 
                              

 

 

 

Consolidated Financial Highlights
($ in thousands except per share data)
(unaudited)
                                         
    At or for the three months ended  
    March 31,     December 31,     September 30,     June 30,     March 31,  
    2010     2009     2009     2009     2009  
Earnings (loss)
                                        
Net interest income
   $ 2,229     $ 2,234     $ 2,132     $ 2,073     $ 2,060  
Provision for loan losses
   $ 748     $ 3,245     $ 4,776     $ 1,357     $ 550  
Noninterest income
   $ 510     $ 477     $ 313     $ 301     $ 286  
Noninterest expense
   $ 2,106     $ 1,841     $ 2,059     $ 2,182     $ 2,180  
Net loss
   $ (95 )   $ (2,195 )   $ (6,688 )   $ (762 )   $ (246 )
Net loss available to common stockholders
   $ (197 )   $ (2,297 )   $ (6,790 )   $ (864 )   $ (347 )
Basic loss per common share
   $ (0.05 )   $ (0.56 )   $ (1.66 )   $ (0.21 )   $ (0.08 )
Diluted loss per common share
   $ (0.05 )   $ (0.56 )   $ (1.66 )   $ (0.21 )   $ (0.08 )
 
                                        
Performance Ratios (annualized)
                                        
Return on average assets
     (0.13 %)     (3.13 %)     (9.26 %)     (1.05 %)     (0.34 %)
Return on average equity
     (1.62 %)     (35.45 %)     (89.50 %)     (9.42 %)     (2.98 %)
Average yield on interest-earning assets
     5.12 %     5.31 %     5.20 %     5.33 %     5.53 %
Average rate paid on interest-bearing liabilities
     1.91 %     2.20 %     2.36 %     2.62 %     2.82 %
Average interest rate spread
     3.21 %     3.11 %     2.84 %     2.71 %     2.71 %
Net interest margin, fully taxable equivalent
     3.39 %     3.37 %     3.12 %     3.03 %     3.05 %
Efficiency ratio
     83.87 %     67.69 %     84.21 %     91.91 %     92.92 %
Noninterest expense to average assets
     2.97 %     2.63 %     2.85 %     3.01 %     3.04 %
 
                                        
Capital
                                        
Equity to total assets at end of period
     7.88 %     8.48 %     9.06 %     11.11 %     11.38 %
Tangible equity to tangible assets
     7.83 %     8.43 %     9.06 %     11.11 %     11.38 %
Book value per common share
   $ 3.83     $ 3.95     $ 4.49     $ 6.11     $ 6.32  
Tangible book value per common share
   $ 3.79     $ 3.91     $ 4.49     $ 6.11     $ 6.32  
Period-end market value per common share
   $ 1.19     $ 1.50     $ 2.65     $ 2.92     $ 2.90  
Dividends declared per common share
   $ —     $ —     $ —     $ —     $ —  
Period-end common shares outstanding
     4,098,671       4,099,587       4,100,337       4,100,337       4,101,537  
Average basic common shares outstanding
     4,095,217       4,092,903       4,090,299       4,087,785       4,084,520  
Average diluted common shares outstanding
     4,095,217       4,092,903       4,090,299       4,087,785       4,084,520  
 
                                        
Asset Quality
                                        
Nonperforming loans
   $ 14,066     $ 13,234     $ 12,265     $ 7,288     $ 4,996  
Nonperforming loans to total loans
     6.09 %     5.56 %     5.14 %     3.09 %     2.08 %
Nonperforming assets to total assets
     4.87 %     4.83 %     4.37 %     2.53 %     1.79 %
Allowance for loan losses to total loans
     3.20 %     2.98 %     1.94 %     1.70 %     1.47 %
Allowance for loan losses to nonperforming loans
     52.58 %     53.57 %     37.66 %     54.83 %     70.62 %
Net charge-offs
   $ 430     $ 789     $ 4,102     $ 889     $ 141  
Annualized net charge-offs to average loans
     0.74 %     1.32 %     6.91 %     1.49 %     0.24 %
 
                                        
Average Balances
                                        
Loans
   $ 226,913     $ 233,146     $ 233,041     $ 234,235     $ 236,011  
Assets
   $ 284,005     $ 280,357     $ 289,025     $ 290,097     $ 287,216  
Stockholders’ equity
   $ 23,472     $ 24,770     $ 29,889     $ 32,350     $ 33,070