10QSB

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark one)

þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 0-25045

CENTRAL FEDERAL CORPORATION

(Exact name of small business issuer as specified in its charter)

Delaware	34-1877137
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

2923 Smith Road, Fairlawn, Ohio 44333
(Address of principal executive offices)

(330) 666-7979
(Issuer’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes o No þ

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

Class:	Outstanding at July 31, 2007
Common stock, $0.01 par value	4,434,787 shares

Transitional Small Business Disclosure Format (check one) Yes o No þ

CENTRAL FEDERAL CORPORATION
FORM 10-QSB
QUARTER ENDED JUNE 30, 2007
INDEX

	Page
PART I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006	3
Consolidated Statements of Operations for the three and six months ended June 30, 2007 and 2006	4
Consolidated Statement of Changes in Shareholders’ Equity for the six months ended June 30, 2007	5
Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2007 and 2006	6
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2007 and 2006	7
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis	18
Item 3. Controls and Procedures	26
PART II. Other Information
Item 1. Legal Proceedings	27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 4. Submission of Matters to a Vote of Security Holders	27
Item 6. Exhibits	28
Signatures	29
EX-10.1
EX-11.1
EX-31.1
EX-31.2
EX-32.1

CENTRAL FEDERAL CORPORATION

PART I. Financial Information

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands except per share data)

	June 30,			December 31,
	2007			2006
	(unaudited)
ASSETS
Cash and cash equivalents	$	3,370		$	5,403
Securities available for sale		30,770			29,326
Loans held for sale		795			2,000
Loans, net of allowance of $2,272 and $2,109		208,834			184,695
Federal Home Loan Bank stock		1,963			2,813
Loan servicing rights		183			201
Foreclosed assets, net		262			—
Premises and equipment, net		5,835			4,105
Bank owned life insurance		3,710			3,646
Deferred tax asset		2,036			2,044
Accrued interest receivable and other assets		2,162			1,795
	$	259,920		$	236,028
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Non-interest bearing	$	11,505		$	11,114
Interest bearing		165,612			156,477
Total deposits		177,117			167,591
Federal Home Loan Bank advances		48,045			32,520
Advances by borrowers for taxes and insurance		100			137
Accrued interest payable and other liabilities		2,007			1,540
Subordinated debentures		5,155			5,155
Total liabilities		232,424			206,943
Shareholders’ equity
Preferred stock, 1,000,000 shares authorized; none issued		—			—
Common stock, $.01 par value; 6,000,000 shares authorized; 2007 - 4,628,320 shares issued, 2006 - 4,612,195 shares issued		46			46
Additional paid-in capital		27,272			27,204
Retained earnings		2,002			2,643
Accumulated other comprehensive loss		(211	)		(25	)
Treasury stock, at cost (2007 - 193,533 shares, 2006 - 68,533 shares)		(1,613	)		(783	)
Total shareholders’ equity		27,496			29,085
	$	259,920		$	236,028

See accompanying notes to consolidated financial statements.

3.

CENTRAL FEDERAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands except per share data)

(Unaudited)

	Three months ended					Six months ended
	June 30,					June 30,
	2007		2006			2007		2006
Interest and dividend income
Loans, including fees	$	3,776	$	2,867		$	7,314	$	5,168
Securities		400		438			776		845
Federal Home Loan Bank stock dividends		32		38			72		76
Federal funds sold and other		2		2			6		25
		4,210		3,345			8,168		6,114
Interest expense
Deposits		1,718		1,176			3,387		2,184
Federal Home Loan Bank advances and other debt		541		348			922		485
Subordinated debentures		106		104			212		199
		2,365		1,628			4,521		2,868
Net interest income		1,845		1,717			3,647		3,246
Provision for loan losses		107		292			142		582
Net interest income after provision for loan losses		1,738		1,425			3,505		2,664
Noninterest income
Service charges on deposit accounts		68		54			125		105
Net gains on sales of loans		97		95			172		127
Loan servicing fees, net		9		31			30		45
Net gains (losses) on sales of securities		—		(5	)		—		(5	)
Earnings on bank owned life insurance		32		31			64		63
Other		4		11			19		62
		210		217			410		397
Noninterest expense
Salaries and employee benefits		951		906			2,014		1,835
Occupancy and equipment		123		115			242		229
Data processing		149		116			283		234
Franchise taxes		69		45			138		92
Professional fees		105		75			193		241
Director fees		38		39			75		81
Postage, printing and supplies		42		45			93		95
Advertising and promotion		72		29			96		49
Telephone		24		27			53		53
Loan expenses		2		16			7		61
Foreclosed assets, net		4		(7	)		10		3
Depreciation		154		119			297		224
Other		98		95			182		192
		1,831		1,620			3,683		3,389
Income (loss) before income taxes		117		22			232		(328	)
Income tax expense (benefit)		33		16			63		(110	)
Net income (loss)	$	84	$	6		$	169	$	(218	)
Earnings (loss) per share:
Basic	$	0.02	$	0.00		$	0.04	$	(0.05	)
Diluted	$	0.02	$	0.00		$	0.04	$	(0.05	)

See accompanying notes to consolidated financial statements.

4.

CENTRAL FEDERAL CORPORATION

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(Dollars in thousands except per share data)

(Unaudited)

									Accumulated
			Additional						Other						Total
	Common		Paid-In			Retained			Comprehensive			Treasury			Shareholders’
	Stock		Capital			Earnings			Loss			Stock			Equity
Balance at January 1, 2007	$	46	$	27,204		$	2,643		$	(25	)	$	(783	)	$	29,085
Comprehensive loss:
Net income							169									169
Other comprehensive loss										(186	)					(186	)
Total comprehensive loss																(17	)
Release of 9,234 stock based incentive plan shares				83												83
Tax benefits from dividends on unvested stock based incentive plan shares				3												3
Tax effect from vesting of stock based incentive plan shares				(24	)											(24	)
Stock option expense				6												6
Purchase of 125,000 treasury shares													(830	)		(830	)
Cash dividends declared ($.18 per share)							(810	)								(810	)
Balance at June 30, 2007	$	46	$	27,272		$	2,002		$	(211	)	$	(1,613	)	$	27,496

See accompanying notes to consolidated financial statements.

5.

CENTRAL FEDERAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Dollars in thousands)

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2007			2006			2007			2006
Net income (loss)	$	84		$	6		$	169		$	(218	)
Change in net unrealized gain (loss) on securities available for sale		(371	)		(346	)		(282	)		(550	)
Less: Reclassification adjustment for gains and (losses) later recognized in net income		—			(5	)		—			(5	)
Net unrealized loss		(371	)		(341	)		(282	)		(545	)
Tax effect		126			116			96			185
Other comprehensive loss		(245	)		(225	)		(186	)		(360	)
Comprehensive loss	$	(161	)	$	(219	)	$	(17	)	$	(578	)

See accompanying notes to consolidated financial statements.

6.

CENTRAL FEDERAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Six months ended
	June 30,
	2007			2006
Cash flows from operating activities	$	1,984		$	(470	)
Cash flows from investing activities
Available-for-sale securities:
Sales		—			4,395
Maturities, prepayments and calls		3,209			3,257
Purchases		(4,873	)		(7,383	)
Loan originations and payments, net		(19,370	)		(32,929	)
Loans purchased		(5,145	)		(11,616	)
Proceeds from redemption of FHLB stock		850			—
Additions to premises and equipment		(2,042	)		(165	)
Proceeds from the sale of premises and equipment		9			43
Proceeds from the sale of foreclosed assets		—			158
Net cash from investing activities		(27,362	)		(44,240	)
Cash flows from financing activities
Net change in deposits		9,506			19,072
Net change in short-term borrowings from the Federal Home Loan Bank and other debt		13,325			11,454
Proceeds from Federal Home Loan Bank advances and other debt		3,200			5,000
Repayments on Federal Home Loan Bank advances and other debt		(1,000	)		(3,000	)
Net change in advances by borrowers for taxes and insurance		(37	)		(1	)
Cash dividends paid		(819	)		(611	)
Proceeds from issuance of common stock in public offering		—			14,558
Repurchase of common stock		(830	)		—
Net cash from financing activities		23,345			46,472
Net change in cash and cash equivalents		(2,033	)		1,762
Beginning cash and cash equivalents		5,403			2,972
Ending cash and cash equivalents	$	3,370		$	4,734
Supplemental cash flow information:
Interest paid	$	4,352		$	2,863
Income taxes paid		15			—
Supplemental noncash disclosures:
Transfers from loans to repossessed assets	$	262		$	218

See accompanying notes to consolidated financial statements.

7.

CENTRAL FEDERAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:

The accompanying consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission (the SEC) and in compliance with U.S. generally accepted accounting principles. Because this report is based on an interim period, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accounting principles have been condensed or omitted.

In the opinion of the management of Central Federal Corporation (the Company), the accompanying consolidated financial statements as of June 30, 2007 and December 31, 2006 and for the three and six months ended June 30, 2007 and 2006 include all adjustments necessary for a fair presentation of the financial condition and the results of operations for those periods. The financial performance reported for the Company for the three and six months ended June 30, 2007 are not necessarily indicative of the results to be expected for the full year. This information should be read in conjunction with the Company’s Annual Report to Shareholders and Form 10-KSB for the period ended December 31, 2006. Reference is made to the accounting policies of the Company described in Note 1 of the Notes to Consolidated Financial Statements contained in the Company’s 2006 Annual Report that was filed as Exhibit 13 to the Form 10-KSB. The Company has consistently followed those policies in preparing this Form 10-QSB.

Earnings Per Share:

Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period. Stock based incentive plan shares are considered outstanding as they are earned over the vesting period. Diluted earnings per common share include the dilutive effect of stock based incentive plan shares and additional potential common shares issuable under stock options.

8.

CENTRAL FEDERAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The factors used in the earnings (loss) per share computation follow.

	Three months ended June 30,				Six months ended June 30,
	2007		2006		2007		2006
Basic
Net income (loss)	$	84	$	6	$	169	$	(218	)
Weighted average common shares outstanding		4,501,889		4,524,051		4,517,158		4,374,493
Basic earnings (loss) per common share	$	0.02	$	0.00	$	0.04	$	(0.05	)
Diluted
Net income (loss)	$	84	$	6	$	169	$	(218	)
Weighted average common shares outstanding for basic earnings (loss) per share		4,501,889		4,524,051		4,517,158		4,374,493
Add: Dilutive effects of assumed exercises of stock options and stock based incentive plan shares		—		—		21		—
Average shares and dilutive potential common shares		4,501,889		4,524,051		4,517,179		4,374,493
Diluted earnings (loss) per common share	$	0.02	$	0.00	$	0.04	$	(0.05	)

The following potential average common shares were anti-dilutive and not considered in computing diluted loss per share because the Company had a loss from continuing operations, the exercise price of the options was greater than the average stock price for the periods, or the fair value of the stock based incentive plan shares at the date of grant was greater than the average stock price for the periods.

	Three months ended June 30,				Six months ended June 30,
	2007		2006		2007		2006
Stock options		294,622		278,272		287,505		280,372
Stock based incentive plan shares		20,663		16,304		20,163		18,566

Reclassifications:

Some items in the prior year period financial statements were reclassified to conform to the current presentation.

9.

CENTRAL FEDERAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Adoption of New Accounting Standards:

In February 2006, the Financial Accounting Standards Board (FASB) issued Statement No. 155, Accounting for Certain Hybrid Financial Instruments-an amendment to FASB Statements No. 133 and 140. This Statement clarified the treatment of derivatives that are freestanding or embedded as part of a beneficial interest in a securitized financial asset. This statement was effective on January 1, 2007 and adoption did not have a material impact on the Company’s consolidated financial position or results of operations.

In March 2006, the FASB issued Statement No. 156, Accounting for Servicing of Financial Assets. This statement allows an entity to choose the amortization method or fair value method to account for each separately recognized servicing asset or liability. This statement was effective on January 1, 2007. The Company elected to account for all servicing assets and liabilities according to the amortization method, which did not change the prior treatment of accounting for servicing rights and therefore had no impact on the Company’s consolidated financial position or results of operations.

In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 (FIN 48), which prescribes a recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted FIN 48 effective January 1, 2007. Details related to the adoption of FIN 48 and the impact on the Company’s consolidated financial position and results of operations are more fully discussed in the Note 5 – Income Taxes.

In September 2006, the FASB Emerging Issues Task Force finalized Issue No. 06-5, Accounting for Purchases of Life Insurance — Determining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin No. 85-4 (Accounting for Purchases of Life Insurance). This issue requires that a policyholder consider contractual terms of a life insurance policy in determining the amount that could be realized under the insurance contract. It also requires that if the contract provides for a greater surrender value if all individual policies in a group are surrendered at the same time, that the surrender value be determined based on the assumption that policies will be surrendered on an individual basis. Lastly, the issue discusses whether the cash surrender value should be discounted when the policyholder is contractually limited in its ability to surrender a policy. This issue was effective on January 1, 2007 and adoption had no impact on the Company’s consolidated financial position or results of operations.

Effect of Newly Issued But Not Yet Effective Accounting Standards:

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. It is effective for fiscal years beginning after November 15, 2007 and will apply to the Company effective January 1, 2008. The Company did not elect early adoption as of January 1, 2007. Management does not expect the adoption of this statement will have a material impact on its consolidated financial position or results of operations.

In February 2007, the FASB issued Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilites, including an amendment of FASB Statement No. 115 (SFAS 159). This statement allows entities the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities. Subsequent changes in fair value of the financial assets and liabilities would be recognized in earnings when they occur. This pronouncement also establishes certain additional disclosure requirements. It is effective at the beginning of the first fiscal year beginning after November 15, 2007 and will apply to the Company effective January 1, 2008. The Company did not elect early adoption as of January 1, 2007. At the present time, management does not expect the adoption of this statement will have a material impact on the Company’s consolidated financial position or results of operations.

10.

CENTRAL FEDERAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)

NOTE 2 – LOANS

Loans were as follows:

	June 30,			December 31,
	2007			2006
Commercial	$	28,489		$	31,913
Real estate:
Single-family residential		29,652			30,209
Multi-family residential		41,330			47,247
Commercial		81,159			47,474
Consumer		30,827			30,246
Subtotal		211,457			187,089
Less: Net deferred loan fees		(351	)		(285	)
Allowance for loan losses		(2,272	)		(2,109	)
Loans, net	$	208,834		$	184,695

Real estate loans include $4,510 and $4,454 in construction loans at June 30, 2007 and December 31, 2006.

Activity in the allowance for loan losses was as follows.

	Three months ended						Six months ended
	June 30,						June 30,
	2007			2006			2007			2006
Beginning balance	$	2,150		$	1,730		$	2,109		$	1,495
Provision for loan losses		107			292			142			582
Loans charged-off		(1	)		(80	)		(9	)		(150	)
Recoveries		16			46			30			61
Ending balance	$	2,272		$	1,988		$	2,272		$	1,988

Nonperforming loans were as follows:

	June 30,		December 31,
	2007		2006
Loans past due over 90 days still on accrual	$	—	$	—
Nonaccrual loans		168		297

Nonperforming loans include both smaller balance single-family mortgage and consumer loans that are collectively evaluated for impairment and individually classified impaired loans. Impaired loans were not material for any period presented.

11.

CENTRAL FEDERAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)

NOTE 3 – STOCK COMPENSATION PLANS

The Company has two share-based compensation plans as described below. Total compensation cost that has been charged against income for those plans was $44 and $89 for the three and six months ended June 30, 2007 and $42 and $108 for the three and six months ended June 30, 2006. The total income tax benefit was $15 and $30 for the three and six months ended June 30, 2007 and $14 and $37 for the three and six months ended June 30, 2006.

Stock-based incentive plans provide for stock option grants and restricted stock awards to directors, officers and employees. The 1999 Stock-based Incentive Plan was approved by shareholders on July 13, 1999. The plan provided 193,887 shares for stock option grants and 77,554 shares for restricted stock awards. The 2003 Equity Compensation Plan was ratified by shareholders on April 23, 2003 and provided an aggregate of 100,000 shares for stock option grants and restricted stock awards, including up to a maximum of 30,000 shares for restricted stock awards. An amendment and restatement of the 2003 Equity Compensation Plan was approved by stockholders on April 20, 2004 to provide an additional 100,000 shares of Company stock for stock option grants and restricted stock awards, including up to a maximum of 30,000 shares for restricted stock awards. A second amendment and restatement of the 2003 Equity Compensation Plan was approved by stockholders on May 20, 2005 to provide an additional 100,000 shares of Company stock for stock option grants and restricted stock awards, including up to a maximum of 30,000 shares for restricted stock awards. A third amendment and restatement of the 2003 Equity Compensation Plan was approved by stockholders on May 17, 2007 to provide an additional 200,000 shares of Company stock for stock option grants and restricted stock awards, including up to a maximum of 60,000 shares for restricted stock awards.

Stock Options

The Plans permit the grant of share options to directors, officers and employees for up to 693,887 shares of common stock. The Company believes that such awards better align the interests of its employees with those of its shareholders. Option awards are granted with an exercise price equal to the market price of the Company’s common stock at the date of grant; those option awards generally have vesting periods ranging from 3 to 5 years and have 10-year contractual terms.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock. The Company uses historical data to estimate option exercise and post-vesting termination behavior. (Employee and management options are tracked separately.) The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The fair value of options granted was determined using the following weighted-average assumptions as of grant date for options granted during the six months ended June 30, 2007. There were no options granted during the three months ended June 30, 2007 or the six months ended June 30, 2006.

	Six months ended
	June 30, 2007
Risk-free interest rate		4.68	%
Expected option life (years)		6
Expected stock price volatility		23	%
Dividend yield		4.90	%

12.

CENTRAL FEDERAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)

NOTE 3 – STOCK COMPENSATION PLANS (continued)

A summary of stock option activity in the plan for the six months ended June 30, 2007 follows:

	Six months ended June 30, 2007
					Weighted
			Weighted		Average
			Average		Remaining
			Exercise		Contractual		Intrinsic
	Shares		Price		Term (Years)		Value
Options outstanding, beginning of period		273,272	$	11.23		6.7
Granted		21,350		7.35		9.6
Exercised		—		—		—
Forfeited or expired		—		—		—
Options outstanding, end of period		294,622	$	10.95		6.4	$	—
Options exercisable, end of period		273,272	$	11.23		6.2	$	—

Information related to the stock option plan during each period follows:

	Three months ended June 30,				Six months ended June 30,
	2007		2006		2007		2006
Intrinsic value of options exercised	$	—	$	—	$	—	$	—
Cash received from option exercises		—		—		—		—
Related tax benefit realized from option exercises		—		—		—		—
Weighted average fair value of options granted		—		—		1.19		—

As of June 30, 2007, there was $19 of total unrecognized compensation cost related to nonvested stock options granted under the plan. The cost is expected to be recognized over a weighted-average period of 1.7 years.

13.

CENTRAL FEDERAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)

NOTE 3 – STOCK COMPENSATION PLANS (continued)

Restricted Stock Awards

The plans permit the grant of restricted stock awards to directors, officers and employees. Compensation expense is recognized over the vesting period of the shares based on the market value of the shares at issue date. Shares issuable under the plans totaled 60,125 at June 30, 2007, and 18,250 shares were issued during the six months ended June 30, 2007. No shares were issued during the six months ended June 30, 2006.

A summary of changes in the Company’s nonvested shares for the period follows:

	Six months ended June 30, 2007
				Weighted
				Average Grant-
	Shares			Date Fair Value
Nonvested shares outstanding at beginning of period		29,552		$	11.36
Granted		18,250			7.35
Vested		(15,277	)		12.05
Forfeited		—			—
Nonvested shares outstanding at end of period		32,525		$	8.79

     As of June 30, 2007, there was $161 of total unrecognized compensation cost related to nonvested shares granted under the plans. The cost is expected to be recognized over a weighted-average period of 1.5 years. The total fair value of shares vested during the three and six months ended June 30, 2007 was $86 and $184. The total fair value of shares vested during the three and six months ended June 30, 2006 was $67 and $171.

14.

CENTRAL FEDERAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)

NOTE 4 – FEDERAL HOME LOAN BANK ADVANCES

Advances from the Federal Home Loan Bank were as follows.

	June 30, 2007		December 31, 2006
Maturity July 2007 at 5.31% floating rate	$	34,575	$	—
Maturity January 2007 at 5.18% floating rate		—		21,250
Maturities July 2007 thru March 2010, fixed at rates from 2.69% to 5.60%, averaging 4.51% at June 30, 2007, and maturities March 2007 thru June 2009, fixed at rates from 2.44% to 5.60%, averaging 4.16% at December 31, 2006		13,470		11,270
Total	$	48,045	$	32,520

The fixed rate advances are due in full at their maturity date, with a penalty if prepaid. Floating rate advances can be prepaid at any time with no penalty.

The advances were collateralized as follows.

	June 30, 2007		December 31, 2006
First mortgage loans under a blanket lien arrangement	$	26,282	$	30,422
Second mortgage loans		586		679
Multi-family mortgage loans		16,663		12,580
Home equity lines of credit		9,429		10,495
Commercial real estate loans		52,294		35,028
Securities		20,655		10,748
Total	$	125,909	$	99,952

Based on this collateral and CFBank’s holdings of FHLB stock, CFBank is eligible to borrow up to $64,344 at June 30, 2007.

Payment information

Required payments over the next five years are:
June 30, 2008	$	38,845
June 30, 2009		8,200
June 30, 2010		1,000
Total	$	48,045

15.

CENTRAL FEDERAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)

NOTE 5 – INCOME TAXES

The Company adopted the provisions of FIN 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007. Adoption did not result in the recognition of a liability for unrecognized tax benefits. The Company and its subsidiaries file consolidated income tax returns in the U.S. federal jurisdiction and separate income tax returns in various state and local jurisdictions. The Company is no longer subject to U.S. federal or state tax examinations by tax authorities for years before 2003. Interest accrued related to unrecognized tax benefits will be recognized in interest expense and penalties in operating expenses.

NOTE 6 – SEGMENT INFORMATION

The reportable segments are determined by the products and services offered, primarily distinguished between banking and mortgage banking operations. Loans, securities, deposits and servicing fees provide the revenues in the banking operation, and single-family residential mortgage loan sales provide the revenues in mortgage banking. All operations are domestic.

The accounting policies used are the same as those described in the summary of significant accounting policies. Segment performance is evaluated using net income. Income taxes are allocated and transactions among segments are made at fair value. “Parent and Other” includes activities that are not directly attributed to the reportable segments and is comprised of the parent company and elimination entries between all segments. Information reported internally for performance assessment follows:

				Mortgage						Consolidated
	Banking			Banking			Parent and Other			Total
For the three months ended June 30, 2007:
Net interest income (expense)	$	1,933		$	18		$	(106	)	$	1,845
Provision for loan losses		(107	)		—			—			(107	)
Net gain (loss) on sales of loans		(18	)		115			—			97
Other revenue		113			(7	)		7			113
Depreciation and amortization		(153	)		(1	)		—			(154	)
Other expense		(1,510	)		(78	)		(89	)		(1,677	)
Income (loss) before income tax		258			47			(188	)		117
Income tax expense (benefit)		80			17			(64	)		33
Net income (loss)	$	178		$	30		$	(124	)	$	84
For the three months ended June 30, 2006:
Net interest income (expense)	$	1,792		$	29		$	(104	)	$	1,717
Provision for loan losses		(292	)		—			—			(292	)
Net gain (loss) on sales of loans		(53	)		148			—			95
Other revenue		116			—			6			122
Depreciation and amortization		(100	)		(19	)		—			(119	)
Other expense		(1,279	)		(138	)		(84	)		(1,501	)
Income (loss) before income tax		184			20			(182	)		22
Income tax expense (benefit)		70			7			(61	)		16
Net income (loss)	$	114		$	13		$	(121	)	$	6

16.

CENTRAL FEDERAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)

NOTE 6 – SEGMENT INFORMATION (continued)

	Banking			Mortgage Banking			Parent and Other			Consolidated Total
For the six months ended June 30, 2007:
Net interest income (expense)	$	3,818		$	41		$	(212	)	$	3,647
Provision for loan losses		(142	)		—			—			(142	)
Net gain (loss) on sales of loans		(48	)		220			—			172
Other revenue		230			(7	)		15			238
Depreciation and amortization		(289	)		(8	)		—			(297	)
Other expense		(2,996	)		(207	)		(183	)		(3,386	)
Income (loss) before income tax		573			39			(380	)		232
Income tax expense (benefit)		178			14			(129	)		63
Net income (loss)	$	395		$	25		$	(251	)	$	169
June 30, 2007
Segment assets	$	257,318		$	857		$	1,745		$	259,920
For the six months ended June 30, 2006:
Net interest income (expense)	$	3,397		$	48		$	(199	)	$	3,246
Provision for loan losses		(582	)		—			—			(582	)
Net gain (loss) on sales of loans		(54	)		181			—			127
Other revenue		259			(3	)		14			270
Depreciation and amortization		(198	)		(26	)		—			(224	)
Other expense		(2,692	)		(295	)		(178	)		(3,165	)
Income (loss) before income tax		130			(95	)		(363	)		(328	)
Income tax expense (benefit)		45			(32	)		(123	)		(110	)
Net income (loss)	$	85		$	(63	)	$	(240	)	$	(218	)
June 30, 2006
Segment assets	$	214,909		$	2,963		$	1,148		$	219,020

NOTE 7 – ARBITRATION

In December 2005, CFBank terminated the President of Reserve Mortgage Services, Inc. (Reserve), which had been acquired by the Company in October 2004, and later merged into, CFBank. The former President filed a request for arbitration against CFBank and contends that CFBank owes him $600 for breaching an employment agreement between him and CFBank by discharging him without just cause. CFBank responded by denying that it breached the employment agreement in that CFBank had just cause to discharge him, alleging causes of action for breach of contract, breach of fiduciary duty, and breach of duty of loyalty. The arbitration hearing occurred from March through May of 2007 and the parties are currently waiting for the arbitration panel’s decision. An outcome cannot be determined at this time.

17.

CENTRAL FEDERAL CORPORATION

Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS

The following analysis discusses changes in financial condition and results of operations during the periods included in the Consolidated Financial Statements which are part of this filing.

Forward-Looking Statements

This Form 10-QSB contains “forward-looking statements” which may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to our financial condition, results of operations and business that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not limited to (i) general and local economic conditions, (ii) changes in interest rates, deposit flows, demand for mortgages and other loans, real estate values and competition, (iii) changes in accounting principles, policies or guidelines, (iv) changes in legislation or regulation and (v) other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services.

Any or all of our forward-looking statements in this Form 10-QSB and in any other public statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed and we caution readers not to place undue reliance on any such forward-looking statements. We undertake no obligation to publicly release revisions to any forward-looking statements to reflect events or circumstances after the date of such statements.

Business Overview

Central Federal Corporation is a unitary savings and loan holding company incorporated in Delaware in 1998. Our primary business is the operation of our principal subsidiary, CFBank, a federally chartered savings association formed in Ohio in 1892.

CFBank is a community-oriented financial institution offering a variety of financial services to meet the needs of the communities we serve. CFBank’s client-centric method of operation emphasizes personalized service, clients’ access to decision makers, solution-driven lending and quick execution, efficient use of technology and the convenience of remote deposit, telephone banking, corporate cash management and online internet banking. CFBank attracts deposits from the general public and use the deposits, together with borrowings and other funds, primarily to originate commercial and commercial real estate loans, single-family and multi-family residential mortgage loans and home equity lines of credit.

General

Our results of operations are dependent primarily on net interest income, which is the difference between the interest income earned on loans and securities and the cost of funds, consisting of interest paid on deposits and borrowed funds. Net interest income is affected by regulatory, economic and competitive factors that influence interest rates, loan demand and deposit flows. Net income is also affected by, among other things, loan fee income, provisions for loan losses, service charges, gains on loan sales, operating expenses and franchise and income taxes. Operating expenses principally consist of employee compensation and benefits, occupancy and other general and administrative expenses. Results of operations are significantly affected by general economic and competitive conditions, particularly changes in market interest rates, government policies and actions of regulatory authorities. Future changes in applicable laws, regulations or government policies may also materially impact our performance.

Management Strategy

We continued to successfully execute our plan for growth and generated net income of $84 for the quarter ended June 30, 2007, our 5th consecutive profitable quarter. Net income totaled $169 for the six months ended June 30, 2007. Total assets increased $23.9 million or 20.2% on an annualized basis during the 1^st six months of 2007 and included an increase of $24.3 million, or a 38.4% annualized growth rate for commercial, commercial real estate and multi-family loans.

18.

CENTRAL FEDERAL CORPORATION
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS

During the twelve months ended June 30, 2007, total assets increased $40.9 million or 18.7% and included $43.2 million or a 40.1% increase in commercial, commercial real estate and multi-family loans. Commercial, commercial real estate and multi-family loans are the focus of our growth plan.

The flat/inverted yield curve continued to negatively affect funding costs and challenge the net interest margin. Although loan growth positively affected gross interest income, which increased 25.9% in the 2^nd quarter of 2007 compared to the prior year quarter, interest expense increased 45.3% during the same time frame resulting in a 7.5% increase in net interest income for the 2^nd quarter of 2007 compared to the prior year quarter. On a year-to-date basis, gross interest income increased 33.6% during the six months ended June 30, 2007 compared to the prior year period and interest expense increased 57.6% in the same time frame, resulting in a 12.4% increase in net interest income for the six months ended June 30, 2007 compared to the prior year period.

The level of short-term market interest rates, a flat to inverted yield curve and increased local competition for both loans and deposits continued to impact yields on assets and the cost of funding. As a result, net interest margin declined from 3.50% the 2^nd quarter of 2006 to 3.12% in the 2^nd quarter of 2007. On a year-to-date basis, net interest margin declined from 3.53% for the six months ended June 30, 2006 to 3.18% for the current year period. Management of the net interest margin in the current interest rate and competitive environment will continue to be a challenge and continued downward pressure on margins is expected. CFBank continues to manage the net interest margin through matching its asset and liability pricing closely to its business model.

Other than described above, we are not aware of any market or institutional trends, events or uncertainties that are expected to have a material effect on liquidity, capital resources or operations or any current recommendations by regulators which would have a material effect if implemented.

Financial Condition

General. Assets totaled $259.9 million at June 30, 2007 and increased $23.9 million or 10.1% from $236.0 million at December 31, 2006 due to growth in the loan portfolio, which was funded with deposits and FHLB advances.

Securities. Securities available for sale totaled $30.8 million at June 30, 2007, an increase of $1.4 million or 4.9% compared to $29.3 million at December 31, 2006 due to current period purchases offset by repayments on mortgage-backed securities.

Loans. Net loans totaled $208.8 million at June 30, 2007 and increased $24.1 million from $184.7 million at December 31, 2006. Commercial, commercial real estate and multi-family loans totaled $151.0 million at June 30, 2007 and increased $24.4 million from $126.6 million at December 31, 2006. Mortgage loans totaled $29.7 million at June 30, 2007 and decreased $557,000 from $30.2 million at December 31, 2006 as most of our mortgage loan production was originated for sale. Consumer loans increased $581,000 and totaled $30.8 million at June 30, 2007 compared to $30.2 million at December 31, 2006. CFBank purchased auto loans totaling $5.1 million during the six months ended June 30, 2007.

Deposits. Deposits totaled $177.1 million at June 30, 2007 and increased $9.5 million, or 5.7% from $167.6 million at December 31, 2006. The increase in deposits was due to an increase of $8.9 million in certificate of deposit accounts, $1.5 million in interest bearing checking accounts and $391,000 in noninterest bearing deposits offset by a decline of $440,000 in money market accounts and $860,000 in traditional savings account balances. The increase in certificate of deposit accounts included $8.6 million in brokered deposits.

FHLB advances. FHLB advances totaled $48.0 million at June 30, 2007 and increased $15.5 million or 47.7% compared to $32.5 million at December 31, 2006. A $2.2 million economic development advance from the FHLB was drawn during the March 2007 quarter to fund construction of CFBank’s new Columbus regional office in Worthington, which opened in June 2007. The remaining increase in FHLB advances was used to fund loan growth.

19.

CENTRAL FEDERAL CORPORATION
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS

Shareholders’ equity. Shareholders’ equity totaled $27.5 million at June 30, 2007 and decreased $1.6 million or 5.5% compared to $29.1 million at December 31, 2006 as a result of an $830,000 treasury stock repurchase and $810,000 in dividends to shareholders offset by net income in the first half of 2007.

In the second quarter of 2007, we announced a stock repurchase program to buy back up to 400,000 shares of the Company’s common stock. We believe that the repurchase of our shares represents an attractive investment opportunity that will benefit both the Company and its stockholders. The Board of Directors approved this repurchase program based on market and economic factors, alternate investment strategies and the strong capital position of the Company and its subsidiary, CFBank. The repurchased shares will become treasury shares available for general corporate purposes.

Comparison of the Results of Operations for the Three Months Ended June 30, 2007 and 2006

General. Net income for the three months ended June 30, 2007 totaled $84,000, or $.02 per diluted share and improved $78,000 compared to net income of $6,000, or $0.00 per diluted share in the prior year quarter. Sustained customer and asset growth resulting in improved profitability continues to be our focus.

Net interest income. Net interest income totaled $1.8 million for the quarter ended June 30, 2007, an increase of $128,000 or 7.5% compared to $1.7 million for the quarter ended June 30, 2006. Both the volume and yield on interest-earning assets increased in the second quarter of 2007 compared to the prior year quarter. The resultant growth in interest income was partially offset by increased interest expense due to an increase in volume and cost of interest-bearing liabilities in the current year quarter.

Average interest earning assets increased $40.8 million or 20.8% to $236.6 million in the second quarter of 2007 from $195.8 million in the second quarter of 2006 due to loan growth offset by a decline in the average balance of securities and FHLB stock. The yield on interest earning assets increased 29 basis points (bp) to 7.11% in the second quarter of 2007 from 6.82% in the prior year quarter reflecting higher yields on home equity lines of credit, commercial, commercial real estate and multi-family loans due to higher market interest rates in the current year quarter. Interest income increased $865,000 or 25.9% to $4.2 million in the second quarter of 2007 from $3.3 million in the prior year quarter due to growth in interest income on loans offset by a decline in income on securities and FHLB stock. Interest income on loans increased $909,000 or 31.7% to $3.8 million for the quarter ended June 30, 2007 from $2.9 million in the prior year quarter due to an increase in both volume and yield on loans. Average loan balances increased $42.2 million, or 26.2% to $203.0 million in the second quarter of 2007 from $160.8 million in the prior year quarter. The average yield on loans increased 31 bp to 7.44% in the second quarter of 2007 from 7.13% in the prior year quarter due to commercial, commercial real estate and multi-family mortgage loan growth and an increase in yields on home equity lines of credit due to a higher prime interest rate in the current year quarter. Interest income on securities decreased $38,000 or 8.7% to $400,000 in the second quarter of 2007 from $438,000 in the prior year quarter due to a decline in the average securities balance and yield on securities. Average securities balances decreased $789,000 or 2.4% and totaled $31.5 million in the second quarter of 2007 compared to $32.3 million in the prior year quarter due principal repayments on mortgage-backed securities. The average yield on securities declined 31 bp to 5.06% during the second quarter of 2007 from 5.37% in the prior year quarter. The average balance of FHLB stock totaled $2.0 million during the second quarter of 2007, a decrease of $743,000 from $2.7 million in the prior year quarter due to a redemption of $850,000 offset by stock dividends.

Average interest-bearing liabilities increased $38.8 million or 22.5% to $211.2 million in the second quarter of 2007 from $172.4 million in the second quarter of 2006 due to an increase in the average balance of deposits and borrowings. The average cost of interest-bearing liabilities increased 70 bp, or 18.5% to 4.48% in the second quarter of 2007, from 3.78% in the second quarter of 2006 primarily due to higher market interest rates in the current year quarter which increased both deposit and borrowing costs. Interest expense on deposits increased $542,000 or 46.1% to $1.7 million for the quarter ended June 30, 2007 from $1.2 million in the prior year quarter. Average deposit balances increased $27.3 million or 20.6% to $159.5 million in the second quarter of 2007 from

20.

CENTRAL FEDERAL CORPORATION
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS

$132.2 million in the prior year quarter due to an increase in certificate of deposit accounts. The average cost of deposits increased 75 bp to 4.31% in the second quarter of 2007 from 3.56% in the prior year quarter and reflected higher market interest rates during the current year quarter. Interest expense on FHLB advances and other debt, including subordinated debentures increased $195,000 to $647,000 in the second quarter of 2007 from $452,000 in the prior year quarter due to a $11.5 million increase in average borrowing balances in the second quarter of 2007 to $51.7 million compared to $40.2 million in the prior year quarter as FHLB advances were used to fund loan growth and construction costs of the Worthington office. The average cost of borrowings increased 50 bp to 5.00% in the second quarter of 2007 from 4.50% in the prior year quarter due to higher market interest rates in the current year quarter.

Net interest margin decreased 38 bp to 3.12% for the quarter ended June 30, 2007 compared to 3.50% in the prior year quarter. The level of short-term market interest rates, a flat to inverted yield curve and increased local competition for both loans and deposits continued to negatively affect net interest margin.

Provision for loan losses. Management analyzes the adequacy of the allowance for loan losses regularly through reviews of the performance of the loan portfolio giving consideration to economic conditions, changes in interest rates and the effect of such changes on real estate values, and changes in the composition of the loan portfolio. The allowance for loan losses is established through a provision for loan losses based on management’s evaluation of the risk in the loan portfolio. The evaluation includes a review of all loans for which full collectibility may not be reasonably assured and considers, among other factors, the estimated fair value of the underlying collateral, economic conditions, historical loan loss experience, changes in the size and growth of the loan portfolio and additional factors that warrant recognition in providing for an adequate loan loss allowance. Future additions to the allowance for loan losses will be dependent on these factors.

Based on management’s review, the provision for loan losses totaled $107,000 in the second quarter of 2007, a decrease of $185,000 from $292,000 in the prior year quarter. The provision in the current year quarter was lower than the prior year period due to a smaller percentage increase in commercial, commercial real estate and multi-family loan balances in the 2007 period, a decline in nonperforming loans and a decline in historical write-offs on single-family mortgage and consumer loans. Commercial, commercial real estate and multi-family loans increased 19.4% in the 2^nd quarter of 2006 compared to 13.7% in the 2^nd quarter of 2007. Although commercial, commercial real estate and multi-family loan growth remained strong, no significant credit problems have appeared as the portfolio has aged, which resulted in lower allocations to the allowance on loans with satisfactory risk ratings. CFBank continued to experience low levels of nonperforming loans and net loan charge-offs. Nonperforming loans totaled $168,000 or 0.08% of total loans at June 30, 2007 compared to $297,000 or 0.16% of total loans at year-end 2006. Single-family homes in our primary market area secured approximately 97% of the nonperforming balances at both June 30, 2007 and December 31, 2006. Net (recoveries) totaled ($15,000) or (.03%) on an annualized basis to average loans during the three months ended June 30, 2007 and net charge-offs totaled $34,000 or 0.08% on an annualized basis to average loans during the prior year period. The ratio of the allowance for loan losses to total loans was 1.08% at June 30, 2007 and 1.13% at December 31, 2006.

As we continue to execute our plan for growth and improved profitability, we will continue to prudently monitor credit quality in both the existing portfolio and potential loan opportunities. We believe the allowance for loan losses is adequate to absorb probable incurred credit losses in the loan portfolio at June 30, 2007; however, future additions to the allowance may be necessary based on changes in economic conditions and other factors discussed previously.

Noninterest income. Noninterest income totaled $210,000 for the quarter ended June 30, 2007 and was $7,000 or 3.2% lower than the quarter ended June 30, 2006 due to a decline in loan servicing fees offset by an increase in service charges on deposit accounts. Loan servicing fees decreased due to a lower outstanding principal balance of loans serviced, since mortgage loans have generally been sold on a servicing released basis since October 2004. Service charges on deposit accounts increased $14,000 due to an increase in NSF fee income.

21.

CENTRAL FEDERAL CORPORATION
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS

Noninterest expense. Noninterest expense increased $211,000 and totaled $1.8 million in the quarter ended June 30, 2007 compared to $1.6 million in the quarter ended June 30, 2006. The increase in noninterest expense in the current year period was due to costs associated with additional operational resources necessary to further our strategic growth plan. Specifically, during the quarter ended June 30, 2007 additional expense were incurred for the opening of CFBank’s office in Worthington, Ohio replacing the office in Easton, Ohio. Non-interest expenses in the second quarter of 2007 were also incurred for marketing, advertising and the hiring of necessary human resources to support growth.

Management leveraged growth during calendar year 2006 and was able to grow assets by 36.4% or $63.0 million with no increase in noninterest expense during that year. Noninterest expense to average assets improved to 2.89% in the quarter ended June 30, 2007 from 3.03% in the prior year quarter.

Income taxes. Income taxes totaled $33,000 for the quarter ended June 30, 2007 compared to $16,000 in the prior year quarter due to higher pretax income in the current year period.

Comparison of the Results of Operations for the Six Months Ended June 30, 2007 and 2006

General. Net income for the six months ended June 30, 2007 totaled $169,000, or $.04 per diluted share and improved $387,000 compared to a net loss of ($218,000), or ($.05) per diluted share for the prior year period.

Net interest income. Net interest income totaled $3.6 million for the six months ended June 30, 2007, an increase of $401,000 or 12.4% compared to $3.2 million for the six months ended June 30, 2006. Both the volume and yield on interest-earning assets increased in the first half of 2007 compared to the prior year period. The resultant growth in interest income was partially offset by increased interest expense due to an increase in both the volume and cost of interest-bearing liabilities in the current year period.

Average interest earning assets increased $45.4 million or 24.7% to $229.3 million in the first half of 2007 from $183.9 million in the first half of 2006 due to loan growth offset by a decline in the average balance of securities, FHLB stock and other interest earning assets. The yield on interest earning assets increased 48 bp to 7.12% in the first half of 2007 from 6.64% in the prior year period reflecting higher yields on home equity lines of credit, commercial, commercial real estate and multi-family loans due to higher market interest rates in the current year quarter. Interest income increased $2.1 million or 33.6% to $8.2 million in the first half of 2007 from $6.1 million in the prior year period due to growth in interest income on loans offset by a decline in income on securities, FHLB stock and other assets. Interest income on loans increased $2.1 million or 41.5% to $7.3 million for the six months ended June 30, 2007 from $5.2 million in the prior year period due to an increase in both volume and yield on loans. Average loan balances increased $48.3 million, or 32.6% to $196.2 million in the first half of 2007 from $147.9 million in the prior year period. The average yield on loans increased 47 bp to 7.46% in the first half of 2007 from 6.99% in the prior year period due to commercial, commercial real estate and multi-family mortgage loan growth and an increase in yields on home equity lines of credit due to a higher prime interest rate in the current year period. Interest income on securities decreased $69,000 or 8.2% to $776,000 in the first half of 2007 from $845,000 in the prior year period due to a decline in the average securities balance and yield on securities. Average securities balances decreased $1.6 million or 5.0% and totaled $30.7 million in the first half of 2007 compared to $32.3 million in the prior year period due principal repayments on mortgage-backed securities. The average yield on securities declined 16 bp to 5.04% during the first half of 2007 from 5.20% in the prior year period. The average balance of FHLB stock totaled $2.2 million during the first half of 2007, a decrease of $434,000 from $2.7 million in the prior year period due to a redemption of $850,000 offset by stock dividends. Income from other interest earning assets declined $19,000 and totaled $6,000 for the first half of 2007 compared to $25,000 in the prior year period due to a decline in the average balance of other interest earning assets offset by an increase in yield. The average balance of other interest earning assets decreased $766,000 and totaled $232,000 in the first half of 2007 compared to $998,000 in the prior year period due to a higher balance of overnight cash investments in the prior year period. The average yield on other interest earning assets increased 16 bp to 5.17% during the first half of 2007 from 5.01% in the prior year period due to higher short-term interest rates in the current year period.

22.

CENTRAL FEDERAL CORPORATION
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS

Average interest-bearing liabilities increased $45.3 million or 28.5% to $204.2 million in the first half of 2007 from $158.9 million in the first half of 2006 due to an increase in the average balance of deposits and borrowings. The average cost of interest-bearing liabilities increased 82 bp, or 22.7%, to 4.43% in the first half of 2007, from 3.61% in the first half of 2006 primarily due to higher market interest rates in the current year period which increased both deposit and borrowing costs. Interest expense on deposits increased $1.2 million or 55.1% to $3.4 million for the six months ended June 30, 2007 from $2.2 million in the prior year period. Average deposit balances increased $29.6 million or 23.1% to $157.5 million in the first half of 2007 from $127.9 million in the prior year period due to an increase in interest-bearing checking and certificate of deposit accounts. The average cost of deposits increased 89 bp to 4.30% in the first half of 2007 from 3.41% in the prior year period and reflected higher market interest rates during the current year period. Interest expense on FHLB advances and other debt, including subordinated debentures increased $450,000 to $1.1 million in the first half of 2007 from $684,000 in the prior year period due to a $15.7 million increase in average borrowing balances in the first half of 2007 to $46.7 million compared to $31.0 million in the prior year period as FHLB advances were used to fund loan growth and construction costs of the Worthington office. The average cost of borrowings increased 45 bp to 4.86% in the first half of 2007 from 4.41% in the prior year period due to higher market interest rates in the current year period.

Net interest margin decreased 35 bp to 3.18% for the six months ended June 30, 2007 compared to 3.53% in the prior year period. The level of short-term market interest rates, a flat to inverted yield curve and increased local competition for both loans and deposits continued to negatively affect net interest margin.

Provision for loan losses. The provision for loan losses totaled $142,000 in the first half of 2007, a decrease of $440,000 from $582,000 in the prior year period. The provision in the current year period was lower than the prior year period due to a smaller percentage increase in commercial, commercial real estate and multi-family loan balances in the 2007 period, a decline in nonperforming loans, discussed previously, and a decline in historical write-offs on single-family mortgage and consumer loans. For the six months ended June 30, 2006, commercial, commercial real estate and multi-family loans increased 48.7% compared to 19.2% during the current year period. Although commercial, commercial real estate and multi-family loan growth remained strong, no significant credit problems have appeared as the portfolio has aged, which resulted in lower allocations to the allowance on loans with satisfactory risk ratings. Net (recoveries) totaled ($21,000) or (.02%) on an annualized basis to average loans during the six months ended June 30, 2007 and net charge-offs totaled $89,000 or 0.12% on an annualized basis to average loans during the prior year period.

Noninterest income. Noninterest income totaled $410,000 for the six months ended June 30, 2007 and was $13,000 or 3.3% higher than the six months ended June 30, 2006 due to an increase in gains on sales of loans and service charges on deposit accounts offset by a decline in loan servicing fees and other income. Gains on loan sales increased $45,000 and totaled $172,000 for the six months ended June 30, 2007 compared to $127,000 for the six months ended June 30, 2006 due to higher volume of loans originated for sale in the current year period. Service charges on deposit accounts increased $20,000 due to an increase in nonsufficient funds (NSF) fee income. Loan servicing fees decreased due to a lower outstanding principal balance of loans serviced, since mortgage loans have generally been sold on a servicing released basis since October 2004. Other income included a $43,000 gain on the sale of a parcel of land at CFBank’s Calcutta, Ohio office to the State of Ohio through eminent domain in the 2006 period.

Noninterest expense. Noninterest expense increased $294,000 and totaled $3.7 million in the six months ended June 30, 2007 compared to $3.4 million in the six months ended June 30, 2006. The increase in noninterest expense in the current year period was due to costs associated with additional operational resources necessary to further our strategic growth plan. Additional expenses were incurred for the opening of CFBank’s office in Worthington, Ohio and also included marketing, advertising and the hiring of necessary human resources to support growth. Noninterest expense to average assets improved to 3.03% in the six months ended June 30, 2007 from 3.38% in the 2006 period.

23.

CENTRAL FEDERAL CORPORATION
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS

Income taxes. Income tax expense totaled $63,000 for the six months ended June 30, 2007 compared to a tax benefit of $110,000 for the six months ended June 30, 2006 due to pretax income in the current year period and a pretax loss in the prior year period.

Critical Accounting Policies

We follow financial accounting and reporting policies that are in accordance with U.S. generally accepted accounting principles and conform to general practices within the banking industry. These policies are presented in Note 1 to our audited consolidated financial statements in our 2006 Annual Report to Shareholders incorporated by reference into our 2006 Annual Report on Form 10-KSB. Some of these accounting policies are considered to be critical accounting policies, which are those policies that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Application of assumptions different than those used by management could result in material changes in our financial position or results of operations. We believe that the judgments, estimates and assumptions used in the preparation of the consolidated financial statements are appropriate given the factual circumstances at the time.

We have identified accounting polices that are critical accounting policies, and an understanding of these is necessary to understand our financial statements. One critical accounting policy relates to determining the adequacy of the allowance for loan losses. The Allowance for Loan and Lease Losses Policy provides a thorough, disciplined and consistently applied process that incorporates management’s current judgments about the credit quality of the loan portfolio into determination of the allowance for loan losses in accordance with generally accepted accounting principles and supervisory guidance. Management estimates the required allowance balance using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Management believes that an adequate allowance for loan losses has been established. Additional information regarding this policy is included in the previous sections captioned “Provision for Loan Losses” and in the notes to the consolidated financial statements in our 2006 Annual Report to Shareholders incorporated by reference into our 2006 Annual Report on Form 10-KSB, Note 1 (Summary of Significant Accounting Policies) and Note 3 (Loans).

Another critical accounting policy relates to valuation of the deferred tax asset for net operating losses. Net operating losses totaling $2.2 million, $2.7 million and $431,000 expire in 2023, 2024 and 2025, respectively. No valuation allowance has been recorded against the deferred tax asset for net operating losses because the benefit is more likely than not to be realized. As we continue our strategy to expand into business financial services and focus on growth, the resultant increase in interest-earning assets is expected to increase profitability. Additional information is included in Notes 1 and 13 to our audited consolidated financial statements in our 2006 Annual Report to Shareholders incorporated by reference into our 2006 Annual Report on Form 10-KSB.

Liquidity and Capital Resources

In general terms, liquidity is a measurement of ability to meet cash needs. The primary objective in liquidity management is to maintain the ability to meet loan commitments or to repay deposits and other liabilities in accordance with their terms without an adverse impact on current or future earnings. Principal sources of funds are deposits, amortization and prepayments of loans, maturities, sales and principal receipts of securities available for sale, borrowings and operations. While maturities and scheduled amortization of loans are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition.

CFBank is required by regulation to maintain sufficient liquidity to ensure its safe and sound operation. Thus, adequate liquidity may vary depending on CFBank’s overall asset/liability structure, market conditions, the activities of competitors and the requirements of its own deposit and loan customers. Management believes that CFBank’s liquidity is sufficient.

24.

CENTRAL FEDERAL CORPORATION
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS

Liquidity management is both a daily and long-term responsibility of management. We adjust our investments in liquid assets, primarily cash, short-term investments and other assets that are widely traded in the secondary market, based on management’s assessment of expected loan demand, deposit flows, yields available on interest-earning deposits and securities and the objective of our asset/liability management program. In addition to liquid assets, we have other sources of liquidity available including, but not limited, to access to advances from the FHLB, use of brokered deposits and the ability to obtain deposits by offering above-market interest rates.

CFBank relies primarily on competitive rates, customer service and relationships with customers to retain deposits. Based on our historical experience with deposit retention and current retention strategies, we believe that, although it is not possible to predict future terms and conditions upon renewal, a significant portion of deposits will remain with CFBank.

At June 30, 2007, CFBank exceeded all of its regulatory capital requirements to be considered well-capitalized with a Tier 1 capital level of $23.1 million, or 9.0% of adjusted total assets, which exceeds the required level of $12.9 million, or 5.0%; Tier 1 risk-based capital level of $23.1 million, or 10.3% of risk-weighted assets, which exceeds the required level of $13.5 million, or 6.0%; and risk-based capital of $25.4 million, or 11.3% of risk-weighted assets, which exceeds the required level of $22.5 million, or 10.0%.

25.

CENTRAL FEDERAL CORPORATION

Item 3.

CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act of 1934 (Exchange Act) reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure. Management, with the participation of our principal executive and financial officers, has evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based on such evaluation, our principal executive and financial officers have concluded that, as of the end of such period, our disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports we file or submit under the Exchange Act.

Changes in internal control over financial reporting. We made no change in our internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

26.

CENTRAL FEDERAL CORPORATION

PART II. — Other Information

Item 1. Legal Proceedings

Information required by Item 103 of Regulation S-B is incorporated by reference to our 2006 Annual Report on Form 10-KSB filed with the SEC on March 29, 2007 under the caption “Item 3. Legal Proceedings”. Also see Note 7 – Arbitration contained in the Notes to Consolidated Financial Statements included in this Form 10-QSB.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

								Maximum Number
								(or Approximate
						Total Number of		Dollar Value) of
						Shares (or Units)		Shares (or Units)
				Average		Purchased as Part		that May Yet Be
	Total Number of			Price Paid		of Publicly		Purchased Under
	Shares (or Units)			per Share		Announced Plans		the Plans or
Period	Purchased			(or Unit)		or Programs		Programs
April 1 - 30, 2007		—			—		—		—
May 1 - 31, 2007		—			—		—		—
June 1 - 30, 2007		125,000	(1)	$	6.64		—		400,000	(2)

(1)	These shares were purchased in an open market transaction and were not part of the publicly announced program.
(2)	On June 22, 2007, the Company announced a 400,000 share repurchase program to begin on June 26, 2007.

Item 4. Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting on May 17, 2007. The term of three of the Company’s seven directors expired at the meetings. Each director was re-elected by the stockholders for a three-year term expiring at the annual meeting in 2010. Results of the voting were as follows:

Election of Directors:

Nominee	For		Vote Withheld
Thomas P. Ash		3,913,226		112,543
David C. Vernon		3,783,459		242,310
Jerry F. Whitmer		3,901,595		124,174

     In addition to the foregoing, the following directors continued in office after the meeting, each until the annual meeting in the year indicated:

Continuing Director	Year
Jeffrey W. Aldrich		2009
Mark S. Allio		2009
William R. Downing		2008
Gerry W. Grace		2008

27.

CENTRAL FEDERAL CORPORATION
PART II. — Other Information

Item 4. Submission of Matters to a Vote of Security Holders (continued)

Approval of the Third Amended and Restated 2003 Equity Compensation Plan:

For	Against	Abstain	Broker Non-Vote
1,834,971	804,431	25,390	1,308,577

Ratification of the appointment of Crowe Chizek and Company LLC as independent auditors of the Company for the year ending December 31, 2007:

For	3,988,290
Against	33,579
Abstain	3,900

There were no broker non-votes with respect to either of the foregoing matters, except as noted above.

Item 6. Exhibits

(a) Exhibit
Number	Exhibit
3.1*	Certificate of Incorporation
3.2*	Bylaws
4.0*	Form of Common Stock Certificate
10.1	Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan
11.1	Statement Re: Computation of Per Share Earnings
31.1	Rule 13a-14(a) Certifications of the Chief Executive Officer
31.2	Rule 13a-14(a) Certifications of the Chief Financial Officer
32.1	Section 1350 Certifications of the Chief Executive Officer and Chief Financial Officer

* Incorporated by reference to the Exhibits included with the registrant’s Registration Statement on Form SB-2 No. 333-64089, filed with the Commission on September 23, 1998

28.

CENTRAL FEDERAL CORPORATION

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CENTRAL FEDERAL CORPORATION
Dated: August 13, 2007	By:	/s/ Mark S. Allio
		Mark S. Allio
		Chairman of the Board, President and Chief Executive Officer

Dated: August 13, 2007	By:	/s/ Therese Ann Liutkus
		Therese Ann Liutkus, CPA
		Treasurer and Chief Financial Officer

29.

EX-10.1

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

THIRD AMENDED AND RESTATED CENTRAL FEDERAL CORPORATION
2003 EQUITY COMPENSATION PLAN

1. DEFINITIONS

(a)	“Affiliate” means any “parent corporation” or “subsidiary corporation” of the Holding Company, as such terms are defined in Sections 424(e) and 424(f) of the Code.
(b)	“Award” means, individually or collectively, a grant under the Plan of Non-Statutory Stock Options, Incentive Stock Options, Stock Appreciation Rights and Restricted Stock Awards.
(c)	“Bank” means CFBank and includes any of its wholly owned subsidiaries.
(d)	“Board of Directors” means the board of directors of the Holding Company.
(e)	“Change in Control” means with respect to the Bank or the Holding Company, an event of a nature that:

(i)	would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or
(ii)	results in a Change in Control of the Holding Company or the Bank within the meaning of the Home Owner’s Loan Act of 1933, as amended, the Federal Deposit Insurance Act and the Rules and Regulations promulgated by the Office of Thrift Supervision (the “OTS”) (or its predecessor agency), as in effect on the date hereof (provided, that in applying the definition of change in control as set forth under the rules and regulations of the OTS, the Board shall substitute its judgment for that of the OTS); or
(iii)	without limitation, such a Change in Control shall be deemed to have occurred at such time as:

(A)	any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of voting securities of the Bank or the Holding Company representing 20% or more of the Bank’s or the Holding Company’s outstanding voting securities or right to acquire such securities except for any voting securities of the Bank purchased by the Holding Company and any voting securities purchased by any employee benefit plan of the Holding Company or its Subsidiaries; or
(B)	individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Holding Company’s stockholders was approved by a Nominating Committee solely composed of members who are Incumbent Board members, shall be, for purposes of this clause (B), considered as though he were a member of the Incumbent Board; or
(C)	a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Holding Company or similar transaction occurs or is effectuated in which the Bank or Holding Company is not the resulting entity; or

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

(D)

a proxy statement has been distributed soliciting proxies from stockholders of the Holding Company, by someone other than the current management of the Holding Company, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Holding Company or Bank with one or more corporations as a result of which the outstanding shares of the class of securities then subject to such plan or transaction are exchanged for or converted into cash or property or securities not issued by the Bank or the Holding Company shall be distributed; or

(E)

a tender offer is made for 20% or more of the voting securities of the Bank or Holding Company then outstanding.

(f)	“Code” means the Internal Revenue Code of 1986, as amended.
(g)	“Committee” means the committee designated, pursuant to Section 4 of the Plan, to administer the Plan.
(h)	“Common Stock” means the common stock of the Holding Company, par value $.01 per share.
(i)	“Disability” means any mental or physical condition with respect to which the Participant qualifies for and receives benefits under a long-term disability plan of the Holding Company or an Affiliate, or in the absence of such a long-term disability plan or coverage under such a plan, “Disability” shall mean a physical or mental condition which, in the sole discretion of the Committee, is reasonably expected to be of indefinite duration and to substantially prevent the Participant from fulfilling his duties or responsibilities to the Holding Company or an Affiliate. In the case of Incentive Stock Options, “Disability” has the meaning set forth in Code Section 22(e)(3).
(j)	“Effective Date” of this Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan means May 17, 2007. The original Effective Date of the Central Federal Corporation 2003 Equity Compensation Plan, as amended herein, was April 23, 2003.
(k)	“Employee” means any person employed by the Holding Company or an Affiliate. Directors who are also employed by the Holding Company or an Affiliate shall be considered Employees under the Plan.
(l)	“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(m)	“Exercise Price” means the price at which an individual may purchase a share of Common Stock pursuant to an Option.
(n)	“Fair Market Value” means the market price of Common Stock, determined by the Committee as follows:

(i)	If the Common Stock was traded on the date in question on the Nasdaq® Stock Market, then the Fair Market Value shall be equal to the closing price reported for such date;
(ii)	If the Common Stock was traded on a stock exchange for the date in question, then the Fair Market Value shall be equal to the closing price reported by the applicable composite transactions report for such date; and
(iii)	If neither of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.

Whenever possible, the determination of Fair Market Value by the Committee shall be based on the prices reported in The Wall Street Journal. The Committee’s determination of Fair Market Value shall be conclusive and binding on all persons.

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

(o) “Holding Company” means Central Federal Corporation (formerly Grand Central Financial Corp.) and any entity which succeeds to the business of Central Federal Corporation.

(p) “Incentive Stock Option” means a stock option granted under the Plan that is intended to meet the requirements of Section 422 of the Code.

(q) “Non-Statutory Stock Option” means a stock option granted to an individual under the Plan that is not intended to be and is not identified as an Incentive Stock Option, or a stock option granted under the Plan that is intended to be and is identified as an Incentive Stock Option, but that does not meet the requirements of Section 422 of the Code.

(r) “Option” means an Incentive Stock Option or a Non-Statutory Stock Option.

(s) “Outside Director” means a member of the board(s) of directors of the Holding Company or an Affiliate who is not also an Employee of the Holding Company or an Affiliate.

(t) “Participant” means any Employee or Outside Director who was granted an Option or Restricted Stock Award under the Plan.

(u) “Plan” means this Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan.

(v) “Restricted Stock Award” means an Award of restricted stock granted to an individual pursuant to Section 7 of the Plan.

(w) “Retirement” means retirement from employment with the Holding Company or an Affiliate in accordance with the then current retirement policies of the Holding Company or Affiliate, as applicable. “Retirement” with respect to an Outside Director means the termination of service from the board(s) of directors of the Holding Company and any Affiliate following written notice to such board(s) of directors of the Outside Director’s intention to retire.

(x) “Stock Appreciation Right” or “SAR” means a right to a payment provided in accordance with Section 7 of the Plan.

(y) “Termination for Cause” shall mean, in the case of an Outside Director, removal from the board(s) of directors of the Holding Company and its Affiliates in accordance with the applicable by-laws of the Holding Company and its Affiliates or, in the case of an Employee, as defined under any employment agreement with the Holding Company or an Affiliate; provided, however, that if no employment agreement exists with respect to the Employee, Termination for Cause shall mean termination of employment because of a material loss to the Holding Company or an Affiliate, as determined by and in the sole discretion of the Board of Directors or its designee(s).

2. PURPOSE

The purpose of this Plan is to:

(a) provide the Holding Company with the ability to continue using Common Stock as a means to attract and retain Employees and Outside Directors;

(b) provide Participants with additional incentives to continue to work for the success of the Holding Company and its Affiliates; and

(c) align the financial interests of Participants with the interests of the Holding Company’s shareholders.

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

3. ELIGIBILITY

(a)	Incentive Stock Options may be granted to any individual who, at the time the Incentive Stock Option is granted, is an Employee.
(b)	Non-Qualified Stock Options may be granted to Employees and Outside Directors.
(c)	Stock Appreciation Rights may be granted to Employees and Outside Directors.
(d)	Restricted Stock Awards may be granted to Employees and Outside Directors.
4.	ADMINISTRATION
(a)	The Committee shall administer the Plan. The Committee shall consist of the entire Board of Directors of the Company.
(b)	The Committee shall:

(i)	select the individuals who are to receive grants of Awards under the Plan;
(ii)	determine the type, number, vesting requirements and other features and conditions of such Awards made under the Plan;
(iii)	interpret the Plan and Award Agreements (as defined below); and
(iv)	make all other decisions related to the operation of the Plan.

In granting Awards under the Plan, the Committee shall consider recommendations of the Chief Executive Officer. The Committee shall adopt any rules or guidelines that it deems appropriate to implement and administer the Plan. The Committee’s determinations under the Plan shall be final and binding on all persons.

(c) Each Award granted under the Plan shall be evidenced by a written agreement (“Award Agreement”). Each Award Agreement shall constitute a binding contract between the Holding Company or an Affiliate and the Award holder, and every Award holder, upon acceptance of an Award Agreement, shall be bound by the terms and restrictions of the Plan and the Award Agreement. The terms of each Award Agreement shall be set in accordance with the Plan, but each Award Agreement may also include any additional provisions and restrictions determined by the Committee. In particular, and at a minimum, the Committee shall set forth in each Award Agreement:

(i)	the type of Award granted;
(ii)	the Exercise Price of any Option or base price of any SAR;
(iii)	the number of shares subject to the Award;
(iv)	the expiration date of the Award;
(v)	the manner, time and rate (cumulative or otherwise) of exercise or vesting of the Award; and
(vi)	the restrictions, if any, placed on the Award, or upon shares which may be issued upon the exercise or vesting of the Award.

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

The Chairman of the Committee and such Outside Directors and Employees as shall be designated by the Committee are hereby authorized to execute Award Agreements on behalf of the Holding Company or an Affiliate and to cause them to be delivered to the recipients of Awards granted under the Plan.

(d)	The Committee may delegate all authority for the determination of forms of payment to be made or received by the Plan and for the execution of any Award Agreement. The Committee may rely on the descriptions, representations, reports and estimates provided to it by the management of the Holding Company or an Affiliate for determinations to be made pursuant to the Plan.
5.	STOCK SUBJECT TO THE PLAN
(a)	Subject to adjustment as provided in Section 13 of the Plan, the number of shares reserved for issuance under the Plan is 500,000. The share reserve includes shares of Common Stock previously issued under the Plan prior to the Plan’s restatement. The following limits also apply with respect to Awards granted under the Plan:

(i)	The maximum number of shares of Common Stock that may be delivered pursuant to Incentive Stock Options granted under the Plan is 500,000 shares less the number of shares of Common Stock issued pursuant to Non-Statutory Stock Options and Restricted Stock Awards.
(ii)	The maximum number of shares of Common Stock that may be delivered pursuant to Non-Statutory Stock Options granted under the Plan is 500,000 shares less the number of shares of Common Stock issued pursuant to Incentive Stock Options and Restricted Stock Awards.
(iii)	The maximum number of Shares of Common Stock that may be delivered pursuant to Restricted Stock Awards granted under the Plan is 150,000 Shares.

(b) The shares of Common Stock issued under the Plan may be either authorized but unissued shares or authorized shares previously issued and acquired or reacquired by the Holding Company. Shares underlying outstanding Awards will be unavailable for any other use, including future grants under the Plan, except that, to the extent the Awards terminate, expire or are forfeited without vesting or having been exercised, new Awards may be granted with respect to these shares subject to the limitations set forth in this Section 5.

(c) To the extent that an Award is settled in cash or a form other than shares of Common Stock, the shares that would have been delivered had there been no such cash or other settlement shall not be counted against the shares available for issuance under this Plan. Shares of Common Stock that are exchanged by a Participant or withheld by the Holding Company as full or partial payment in connection with any Award under this Plan, as well as any shares exchanged by a Participant or withheld by the Holding Company to satisfy the tax withholding obligations related to any Award under this Plan, shall be available for subsequent Awards under this Plan.

6. OPTIONS

The Committee may, subject to the limitations of this Plan and the availability of shares of Common Stock reserved but not previously awarded under the Plan, grant Options to Employees and outside directors, subject to terms and conditions as it may determine, to the extent that such terms and conditions are consistent with the following provisions:

(a) Exercise Price. The Exercise Price shall not be less than one hundred percent (100%) of the Fair Market Value of the Common Stock on the date of grant.

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

(b) Terms of Options. In no event may an individual exercise an Option, in whole or in part, more than ten (10) years from the date of grant.

(c)

Non-Transferability. Unless otherwise determined by the Committee in accordance with this Section 6(c), an individual may not transfer, assign, hypothecate, or dispose of an Option in any manner, other than by will or the laws of intestate succession. The Committee may, however, in its sole discretion, permit transfer or assignment of a Non-Statutory Stock Option, if it determines that the transfer or assignment is for valid estate planning purposes and is permitted under the Code and Rule 16b-3 of the Exchange Act. For

purposes of this Section 6(c), a transfer for valid estate planning purposes includes, but is not limited to, transfers:

(i)	to a revocable inter vivos trust, as to which an individual is both settlor and trustee; or
(ii)	for no consideration to:

(A)	any member of the individual’s Immediate Family;
(B)	a trust solely for the benefit of members of the individual’s Immediate Family;
(C)	any partnership whose only partners are members of the individual’s Immediate Family; or
(D)	any limited liability corporation or other corporate entity whose only members or equity owners are members of the individual’s Immediate Family.

For purposes of this Section 6(c), “Immediate Family” includes, but is not necessarily limited to, an individual’s parents, grandparents, spouse, children, grandchildren, siblings (including half brothers and sisters), and individuals who are family members by adoption. Nothing contained in this Section 6(c) shall be construed to require the Committee to approve the transfer or assignment of any Non-Statutory Stock Option, in whole or in part. Receipt of the Committee’s approval to transfer or assign a Non-Statutory Stock Option, in whole or in part, does not mean that the Committee must approve a transfer or assignment of any other Non-Statutory Stock Option, or portion thereof. The transferee or assignee of any Non-Statutory Stock Option shall be subject to all terms and conditions applicable to the Option immediately prior to transfer or assignment, and shall remain subject to any other conditions proscribed by the Committee with respect to the Option.

(d) Special Rules for Incentive Stock Options. Notwithstanding foregoing provisions, the following rules apply to the grant of Incentive Stock Options:

(i)	If an Employee owns or is treated as owning, for purposes of Section 422 of the Code, Common Stock representing more than ten percent (10%) of the total combined voting securities of the Holding Company at the time the Committee grants the Incentive Stock Option (a “10% Owner”), the Exercise Price shall not be less than one hundred and ten percent (110%) of the Fair Market Value of the Common Stock on the date of grant.
(ii)	An Incentive Stock Option granted to a 10% Owner shall not be exercisable more than five (5) years from the date of grant.
(iii)	To the extent the aggregate Fair Market Value of shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an Employee during any calendar year, under the Plan or any other stock option plan of the Holding Company, exceeds $100,000, or such higher value as may be permitted under Section 422 of the Code, Options in excess of the

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

	limit shall be treated as Non-Statutory Stock Options. Fair Market Value shall be determined as of the date of grant for each Incentive Stock Option.
(iv)	Each Award Agreement for an Incentive Stock Option shall require the individual to notify the Committee within ten (10) days of any disposition of shares of Common Stock under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions).
(v)	Incentive Stock Options exercised more than three (3) months following the date an Employee terminates employment (for reasons other than death or Disability) will be treated as Non-Statutory Stock Options. In the event employment is terminated due to death or Disability, Incentive Stock Options will remain exercisable for one (1) year from the date the Employee terminates employment.

(e) Acceleration Upon a Change in Control. Upon a Change in Control, all Options held by an individual as of the date of the Change in Control shall immediately become exercisable and shall remain exercisable until the expiration of the Option term.

(f) Termination of Employment or Service. The following rules apply upon the termination of a Participant’s employment or other service:

(i)	In General. Unless the Committee determines otherwise, upon termination of employment or service for any reason other than Retirement, Disability or death, or Termination for Cause, a Participant may exercise only those Options that were immediately exercisable by the Participant at the date of termination, and only for a period of three (3) months from the date of termination, or, if sooner, until the expiration of the Option term.
(ii)	Retirement. Unless the Committee determines otherwise, upon a Participant’s Retirement, the Participant may exercise only those Options that were immediately exercisable by the Participant at the date of Retirement, and only for a period of one (1) year from the date of Retirement, or, if sooner, until the expiration of the Option term. Incentive Stock Options exercised more than three (3) months following a Participant’s Retirement date will be treated as Non-Statutory Stock Options for tax purposes.
(iii)	Disability or Death. Unless the Committee determines otherwise, upon termination of a Participant’s employment or service due to Disability or death, all Options shall become immediately exercisable and shall remain exercisable for a period of one (1) year from the date of termination, or, if sooner, until the expiration of the Option term.
(iv)	Termination for Cause. Unless the Committee determines otherwise, upon Termination for Cause, all rights to a Participant’s Options shall expire immediately upon the effective date of Termination for Cause.

7. STOCK APPRECIATION RIGHTS

An SAR shall provide a Participant with the right to receive a payment, in cash and/or Common Stock, equal to the excess of the Fair Market Value of a specified number of shares of Common Stock on the date the SAR is exercised over the Fair Market Value of a share of Common Stock on the date the SAR was granted (the “base price”) as set forth in the applicable Award Agreement, provided, however, that, in the case of an SAR granted retroactively, in tandem with or as a substitution for another Award, the base price may be no lower than the Fair Market Value of a share of Common Stock on the date such other Award was granted. The maximum term of an SAR shall be ten (10) years. Notwithstanding the foregoing, effective on and after January 1, 2005, the exercise of an SAR shall entitle the Participant to receive payment with respect to such SAR only in the form of Common Stock. Further, effective

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

January 1, 2005, the base price of an SAR may never be less than the Fair Market Value of a share of Common Stock on the date that the SAR is awarded even if the SAR is awarded in tandem with or as substitution for another Award.

(a) Termination of Employment or Service. The following rules apply upon the termination of a Participant’s employment or other service:

(i)	In General. Unless the Committee determines otherwise, upon termination of employment or service for any reason other than Retirement, Disability or death, or Termination for Cause, a Participant may exercise only those SARs that were immediately exercisable by the Participant at the date of termination, and only for a period of three (3) months from the date of termination, or, if sooner, until the expiration of the SAR term.
(ii)	Retirement. Unless the Committee determines otherwise, upon a Participant’s Retirement, the Participant may exercise only those SARs that were immediately exercisable by the Participant at the date of Retirement, and only for a period of one (1) year from the date of Retirement, or, if sooner, until the expiration of the SAR term.
(iii)	Disability or Death. Unless the Committee determines otherwise, upon termination of a Participant’s employment or service due to Disability or death, all SARs shall become immediately exercisable and shall remain exercisable for a period of one (1) year from the date of termination, or, if sooner, until the expiration of the SAR term.
(iv)	Termination for Cause. Unless the Committee determines otherwise, upon Termination for Cause, all rights to a Participant’s SARs shall expire immediately upon the effective date of Termination for Cause.

(b) Acceleration Upon a Change in Control. Upon a Change in Control, all SARs held by an individual as of the date of the Change in Control shall immediately become exercisable and shall remain exercisable until the expiration of the SAR term.

(c) Determination of Number of Shares Issuable Upon Exercise of an SAR. The number of shares of Common Stock issuable upon the exercise of an SAR shall be determined by dividing:

(i) the number of shares of Common Stock for which the SAR is exercised multiplied by the amount of appreciation per share of Common Stock (for this purpose the “appreciation per share of Common Stock” shall be equal to the amount by which the Fair Market Value of a share of Common Stock on the date that the SAR is exercised exceeds:

(A)	in the case of an SAR granted in tandem with an Option, the exercise price with respect to such Option; or
(B)	in the case of an SAR granted alone without reference to an Option, the base price of the SAR);
	by

     (ii) the Fair Market Value of a share of Common Stock on the date that the SAR is exercised.

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

8. RESTRICTED STOCK AWARDS

     The Committee may make grants of Restricted Stock Awards, which shall consist of the grant of some number of shares of Common Stock to an individual upon such terms and conditions as it may determine to the extent such terms and conditions are consistent with the following provisions:

(a) Grants of Stock. Restricted Stock Awards may only be granted in whole shares of Common Stock.

(b) Non-Transferability. Except to the extent permitted by the Code, the rules promulgated under Section 16(b) of the Exchange Act or any successor statutes or rules:

(i)	The recipient of a Restricted Stock Award grant shall not sell, transfer, assign, pledge, or otherwise encumber shares subject to the grant until full vesting of such shares has occurred. For purposes of this section, the separation of beneficial ownership and legal title through the use of any “swap” transaction is deemed to be a prohibited encumbrance.
(ii)	Unless determined otherwise by the Committee and except in the event of the Participant’s death or pursuant to a domestic relations order, a Restricted Stock Award grant is not transferable and may be earned in his or her lifetime only by the individual to whom it is granted. Upon the death of a Participant, a Restricted Stock Award grant is transferable by will or the laws of descent and distribution. The designation of a beneficiary shall not constitute a transfer.
(iii)	If the recipient of a Restricted Stock Award is subject to the provisions of Section 16 of the Exchange Act, shares of Common Stock subject to the grant may not, without the written consent of the Committee (which consent may be given in the Award Agreement), be sold or otherwise disposed of within six (6) months following the date of grant.

(c) Acceleration of Vesting Upon a Change in Control. Upon a Change in Control, all Restricted Stock Awards held by a Participant as of the date of the Change in Control shall immediately become vested and any further restrictions shall lapse.

(d) Termination of Employment or Service. The following rules will govern the treatment of a Restricted Stock Award upon the termination of a Participant’s termination of employment or other service:

(i)	In General. Unless the Committee determines otherwise, upon the termination of a Participant’s employment or service for any reason other than Retirement, Disability or death, or Termination for Cause, any Restricted Stock Award in which the Participant has not become vested as of the date of such termination shall be forfeited and any rights the Participant had to such Restricted Stock Award shall become null and void.
(ii)	Retirement. Unless the Committee determines otherwise, upon a Participant’s Retirement, any Restricted Stock Award in which the Participant has not become vested as of the date of Retirement shall be forfeited and any rights the individual had to such unvested Restricted Stock Award shall become null and void.
(iii)	Disability or Death. Unless otherwise determined by the Committee, in the event of a termination of a Participant’s service due to Disability or death, all unvested Restricted Stock Awards held by such Participant shall immediately vest as of the date of such termination.
(iv)	Termination for Cause. Unless otherwise determined by the Committee, in the event of a Participant’s Termination for Cause, all Restricted Stock Awards in which the Participant had not become vested as of the effective date of such termination shall be forfeited and any rights the Participant had to such unvested Restricted Stock Awards shall become null and void.

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

(e) Issuance of Certificates. Unless otherwise held in trust and registered in the name of the Plan trustee, reasonably promptly after the date of grant with respect to shares of Common Stock pursuant to a Restricted Stock Award, the Holding Company shall cause to be issued a stock certificate, registered in the name of the Participant to whom the Restricted Stock Award was granted, evidencing such shares; provided, however, that the Holding Company shall not cause a stock certificate to be issued unless it has received a stock power duly endorsed in blank with respect to such shares. Each such stock certificate shall bear the following legend:

The transferability of this certificate and the shares of stock represented hereby are subject to the restrictions, terms and conditions (including forfeiture provisions and restrictions against transfer) contained in the Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan entered into between the registered owner of such shares and Central Federal Corporation or its Affiliates. A copy of the Plan and Award Agreement is on file in the office of the Corporate Secretary of Central Federal Corporation, 2923 Smith Road, Fairlawn, Ohio 44333.

	This legend shall not be removed until the individual becomes vested in such shares pursuant to the terms of the Plan and Award Agreement. Each certificate issued pursuant to this Section 8(e) shall be held by the Holding Company or its Affiliates, unless the Committee determines otherwise.
(f)	Treatment of Dividends. Participants are entitled to all dividends and other distributions declared and paid on Common Stock with respect to all shares of Common Stock subject to a Restricted Stock Award, from and after the date such shares are awarded or from and after such later date as may be specified by the Committee in the Award Agreement. The Participant shall not be required to return any such dividends or other distributions to the Holding Company in the event of forfeiture of the Restricted Stock Award. In the event the Committee establishes a trust for the Plan, the Committee may elect to distribute dividends and other distributions at the time the Restricted Stock Award vests or pay the dividends (or other distributions) directly to the Participants.
(g)	Voting of Restricted Stock Awards. Participants who are granted Restricted Stock Awards are entitled to vote or to direct the Plan trustee to vote, as the case may be, all unvested shares of Common Stock subject to the Restricted Stock Award.

9. DEFERRED PAYMENTS

The Committee, in its discretion, may permit an individual to elect to defer the receipt of all or any part of any cash or stock payment under the Plan, or the Committee may determine to defer receipt by some or all individuals, of all or a portion of any payment. The Committee shall determine the terms and conditions of any permitted deferral, including the period of deferral, the manner of deferral and the method used to measure appreciation on deferred amounts until paid. Notwithstanding the foregoing, the provisions of this Section 9 shall not apply on and after January 1, 2005 to Options or SARs and, after such date, a Participant shall not be permitted to defer the receipt of all or any part of any cash or stock payment under an Award other than an Option or SAR made pursuant to the Plan unless such deferral is made pursuant to such rules, procedures or programs as the Committee may establish for purposes of this Plan and which are intended to comply with the requirements of Code Section 409A.

10. METHOD OF EXERCISING OPTIONS

Subject to any applicable Award Agreement, an individual may exercise any Option, in whole or in part, at such time or times as the Committee specifies in the Award Agreement. The individual may make payment of the Exercise Price in such form or forms as the Committee specifies in the Award Agreement, including, without limitation, payment by delivery of cash, Common Stock or a cashless exercise with a qualified broker. Any Common Stock used in full or partial payment of the Exercise Price shall be valued at the Fair Market Value of the Common Stock on the date of exercise. Delivery by the Holding Company of the shares as to which an Option has

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

been exercised shall be made to the person exercising the Option or the designee of such person. If so provided by the Committee upon grant of the Option, the shares received upon exercise may be subject to certain restrictions upon subsequent transfer or sale by the Participant. In the event the Exercise Price is to be paid in full or in part by surrender of Common Stock, in lieu of actual surrender of shares of Common Stock the Holding Company may waive such surrender and instead deliver to or on behalf of the Participant a number of shares equal to the total number of shares as to which the Option is then being exercised less the number of shares which would otherwise have been surrendered by the Participant to the Holding Company.

11. RIGHTS OF INDIVIDUALS

No individual shall have any rights as a shareholder with respect to any shares of Common Stock covered by a grant under this Plan until the date of issuance of a stock certificate for such Common Stock. Nothing contained in this Plan or in any Award Agreement confers on any person the right to continue in the employ or service of the Holding Company or an Affiliate or interferes in any way with the right of the Holding Company or an Affiliate to terminate an individual’s services.

12. DESIGNATION OF BENEFICIARY

With the Committee’s consent, an individual may designate a person or persons to receive, upon the individual’s death, any Award to which the individual would then be entitled. This designation shall be made upon forms supplied by, or otherwise acceptable to, and delivered to the Holding Company. A designation of beneficiary may be revoked in writing. If an individual fails to effectively designate a beneficiary, the individual’s estate shall be deemed to be the beneficiary for purposes of the Plan.

13. DILUTION AND OTHER ADJUSTMENTS

In the event of any change in the outstanding shares of Common Stock, by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination or exchange of shares, or other similar corporate change, or any other increase or decrease in such shares, without receipt or payment of consideration by the Holding Company, or in the event an extraordinary capital distribution is made, the Committee may make adjustments to previously granted Awards, to prevent dilution, diminution, or enlargement of the rights of individuals, including any or all of the following:

(a) adjustments in the aggregate number or kind of shares of Common Stock or other securities that may underlie future Awards under the Plan;

(b) adjustments in the aggregate number or kind of shares of Common Stock or other securities that underlie Awards already made under the Plan; and

(c) adjustments in the Exercise Price of outstanding Options or base price of outstanding SARs.

The Committee, however, shall not make adjustments that materially change the value of benefits available to an individual under a previously granted Award. All Awards under this Plan shall be binding upon any successors or assigns of the Holding Company.

14. TAXES

Under this Plan, whenever cash or shares of Common Stock are to be delivered, the Committee is entitled to require as a condition of delivery that:

(a) the individual remit an amount sufficient to satisfy all related federal, state, and local withholding tax requirements;

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

(b) the withholding of such sums may come from compensation otherwise due to the individual or from shares of Common Stock due to the individual under this Plan; or

(c) any combination of (a) and (b), above; provided, however, that no amount shall be withheld from any cash payment or shares of Common Stock related to an Option transferred by the individual in accordance with this Plan.

15. NOTIFICATION UNDER SECTION 83(b)

The Committee may, on the date of grant or at a later date, prohibit an individual from making the election described below. If the Committee has not prohibited an individual from making this election, and the individual shall, in connection with the exercise of any Award, make the election permitted under Section 83(b) of the Code, the individual shall notify the Committee of the election within ten (10) days of filing notice of the election with the Internal Revenue Service. This requirement is in addition to any filing and notification required under the regulations issued under the authority of Section 83(b) of the Code.

16. AMENDMENT OF THE PLAN AND AWARD GRANTS

(a) Except as provided in paragraph (c) of this Section 16, the Board of Directors may at any time, and from time to time, modify or amend the Plan in any respect, prospectively or retroactively; provided, however, that provisions governing grants of Incentive Stock Options shall be submitted for shareholder approval to the extent required by law, regulation, or otherwise. Failure to ratify or approve amendments or modifications by shareholders shall be effective only as to the specific amendment or modification requiring shareholder ratification or approval. Other provisions of this Plan shall remain in full force and effect. No termination, modification, or amendment of this Plan may adversely affect the rights of an individual under an outstanding Award without the written permission of the affected individual.

(b) Except as provided in paragraph (c) of this Section 16, the Committee may amend any Award Agreement, prospectively or retroactively; provided, however, that no amendment shall adversely affect the rights of an individual under an outstanding Award Agreement without the written consent of the affected individual.

(c) In no event shall the Board of Directors amend the Plan or shall the Committee amend an Award Agreement in any manner that effectively:

(i)	allows any Option to be granted with an Exercise Price below the Fair Market Value of the Common Stock on the date of grant; or
(ii)	allows the Exercise Price of any Option previously granted under the Plan to be reduced after the date of grant.

(d) It is intended that this Plan and any Awards made pursuant to this Plan shall comply with the provisions of Section 409A of the Code, to the extent applicable. If Code Section 409A becomes applicable to this Plan or any Award, this Plan and such Award shall be administered in a manner consistent with such intent and any provision that would cause this Plan or any Award to fail to satisfy Code Section 409A shall have no force or effect until amended to comply with Code Section 409A (which amendments may be made retroactive to the extent permitted by Code Section 409A and may be made by the Board of Directors without the consent of the Participants). References in this Plan to Code Section 409A shall include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to Code Section 409A by the United States Department of the Treasury or the Internal Revenue Service.

17. TERMINATION OF THE PLAN

The right to grant Awards under the Plan will terminate upon the earlier of:

CENTRAL FEDERAL CORPORATION

Exhibit 10.1
Third Amended and Restated Central Federal Corporation 2003 Equity Compensation Plan

(a) April 23, 2013, which is ten (10) years after the original Effective Date of the Plan; or

(b) the issuance of a number of shares of Common Stock pursuant to the exercise of Options and Stock Appreciation Rights and the vesting of Restricted Stock Awards equal to the maximum number of shares reserved under the Plan, as set forth in Section 5. The Board of Directors may suspend or terminate the Plan at any time; provided, however, that no such action will adversely affect an individual’s vested rights under a previously granted Award, without the consent of the affected individual.

18. APPLICABLE LAW

The Plan will be administered in accordance with the laws of the state of Delaware, except to the extent that Federal law is deemed to apply.

EX-11.1

CENTRAL FEDERAL CORPORATION

Exhibit 11.1
Computation of Per Share Earnings

The information regarding Computation of Per Share Earnings is contained in Note 1 – Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements contained in this report on Form 10-QSB.

EX-31.1

CENTRAL FEDERAL CORPORATION

Exhibit 31.1
Rule 13a-14(a) Certifications of the Chief Executive Officer

I, Mark S. Allio, certify that:

1.	I have reviewed this report on Form 10-QSB of Central Federal Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4.	The small business issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors:

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: August 13, 2007	/s/ Mark S. Allio
	Mark S. Allio
	Chairman of the Board, President and Chief Executive Officer

EX-31.2

CENTRAL FEDERAL CORPORATION

Exhibit 31.2
Rule 13a-14(a) Certifications of the Chief Financial Officer

I, Therese Ann Liutkus, certify that:

1.	I have reviewed this report on Form 10-QSB of Central Federal Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4.	The small business issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors:

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: August 13, 2007	/s/ Therese Ann Liutkus
	Therese Ann Liutkus, CPA
	Treasurer and Chief Financial Officer

EX-32.1

CENTRAL FEDERAL CORPORATION
Exhibit 32.1
Section 1350 Certifications of the Chief Executive Officer and Chief Financial Officer

In connection with the Quarterly Report of Central Federal Corporation (the “Company”) on Form 10-QSB for the quarter ended June 30, 2007, as filed with the Securities and Exchange Commission (the “Report”), the undersigned, Mark S. Allio, Chairman of the Board, President and Chief Executive Officer of the Company, and Therese Ann Liutkus, Treasurer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by this Report.

Dated: August 13, 2007	By:	/s/ Mark S. Allio
		Mark S. Allio
		Chairman of the Board, President and Chief Executive Officer

Dated: August 13, 2007	By:	/s/ Therese Ann Liutkus
		Therese Ann Liutkus, CPA
		Treasurer and Chief Financial Officer