10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

Or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from __________ to______________

Commission File Number 0-25045

CF BANKSHARES INC.

(Exact name of registrant as specified in its charter)

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

7000 North High St., Worthington, Ohio 43085

(Address of principal executive offices) (Zip Code)

(614) 334-7979

(Registrant’s telephone number, including area code)

______________________________________

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
(Voting) Common Stock, $.01 par value	CFBK	The NASDAQ Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 [X]    No [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes [X]   No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [  ] Accelerated Filer [X] Non-accelerated Filer [  ] Smaller Reporting Company [X]

Emerging Growth Company [  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ]    No [X]

As of May 2, 2022, there were 5,244,076 shares of the registrant’s (Voting) Common Stock outstanding and 1,260,700 shares of the registrant’s Non-Voting Common Stock outstanding.

CF BANKSHARES INC.

INDEX

PART I. Financial Information		Page
Item 1. Financial Statements		3
	Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	3
	Consolidated Statements of Income for the three months ended March 31, 2022 and 2021 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021 (unaudited)	5
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2022 and 2021 (unaudited)	6
	Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited)	7
	Notes to Consolidated Financial Statements (three months ended March 31, 2022 and 2021 (unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		36
Item 3. Quantitative and Qualitative Disclosures About Market Risk		48
Item 4. Controls and Procedures		49
PART II. Other Information		50
Item 1. Legal Proceedings		50
Item 1A. Risk Factors		50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		51
Item 3. Defaults Upon Senior Securities		51
Item 4. Mine Safety Disclosures		51
Item 5. Other Information		51
Item 6. Exhibits		52
Signatures		53

CF BANKSHARES INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands except per share data)

	March 31,		December 31,
	2022		2021
	(unaudited)
ASSETS
Cash and cash equivalents	$	168,290	$	166,591
Interest-bearing deposits in other financial institutions		100		100
Securities available for sale		13,004		16,347
Equity securities		5,000		5,000
Loans held for sale, at fair value		8,470		27,988
Loans and leases, net of allowance of $15,520 and $15,508		1,281,316		1,214,149
FHLB and FRB stock		7,326		7,315
Premises and equipment, net		6,032		5,869
Operating lease right-of-use assets		1,782		1,925
Bank owned life insurance		25,889		25,743
Accrued interest receivable and other assets		26,986		24,562
Total assets	$	1,544,195	$	1,495,589
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest bearing	$	253,778	$	284,935
Interest bearing		1,045,008		961,417
Total deposits		1,298,786		1,246,352
FHLB advances and other debt		83,235		89,727
Advances by borrowers for taxes and insurance		2,078		2,752
Operating lease liabilities		1,889		2,032
Accrued interest payable and other liabilities		14,972		14,513
Subordinated debentures		14,893		14,883
Total liabilities		1,415,853		1,370,259
Commitments and contingent liabilities		-		-
Stockholders' equity
Common stock, $0.01 par value;
shares authorized: 9,090,909, including 1,260,700 shares of non-voting common stock
Voting common stock, $0.01 par value; shares issued: 5,519,614 at March 31, 2022 and 5,485,980 at December 31, 2021		55		55
Non-voting common stock, $0.01 par value;
shares issued: 1,260,700 at March 31, 2022 and 1,260,700 at December 31, 2021		13		13
Series C preferred stock, $0.01 par value; 12,607 shares authorized;
0 issued at March 31, 2022 and 0 shares issued at December 31, 2021		-		-
Additional paid-in capital		88,708		88,528
Retained earnings		48,345		44,084
Accumulated other comprehensive loss		(1,220)		(170)
Treasury stock, at cost; 264,387 shares of voting common stock at March 31, 2022 and 246,432 shares of voting common stock at December 31, 2021		(7,559)		(7,180)
Total stockholders' equity		128,342		125,330
Total liabilities and stockholders' equity	$	1,544,195	$	1,495,589

See accompanying notes to consolidated financial statements.

3

CF BANKSHARES INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands except per share data)

(Unaudited)

	Three months ended
	March 31,
	2022		2021
Interest and dividend income
Loans and leases, including fees	$	12,828	$	12,641
Securities		224		133
FHLB and FRB stock dividends		62		55
Federal funds sold and other		38		28
		13,152		12,857
Interest expense
Deposits		1,684		2,497
FHLB advances and other debt		470		519
Subordinated debentures		224		224
		2,378		3,240
Net interest income		10,774		9,617
Provision for loan and lease losses		-		-
Net interest income after provision for loan and lease losses		10,774		9,617
Noninterest income
Service charges on deposit accounts		266		193
Net gains on sales of residential mortgage loans		557		6,360
Swap fee income		13		182
Gain on redemption of life insurance policies		-		380
Earnings on bank owned life insurance		146		90
Other		64		25
		1,046		7,230
Noninterest expense
Salaries and employee benefits		3,621		4,609
Occupancy and equipment		319		322
Data processing		520		536
Franchise and other taxes		323		239
Professional fees		607		1,215
Director fees		141		152
Postage, printing and supplies		43		39
Advertising and marketing		45		1,244
Telephone		53		59
Loan expenses		100		57
Depreciation		115		97
FDIC premiums		151		239
Regulatory assessment		66		65
Other insurance		44		28
Other		129		68
		6,277		8,969
Income before incomes taxes		5,543		7,878
Income tax expense		1,025		1,457
Net income	$	4,518	$	6,421
Earnings per common share:
Basic	$	0.70	$	0.98
Diluted	$	0.69	$	0.96

See accompanying notes to consolidated financial statements.

4

CF BANKSHARES INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands except per share data)

(Unaudited)

	Three months ended
	March 31,
	2022		2021
Net income	$	4,518	$	6,421
Other comprehensive income:
Unrealized holding losses arising during the period related to securities available for sale, net of tax of ($279) and ($8)		(1,050)		(29)
Other comprehensive loss, net of tax		(1,050)		(29)
Comprehensive income	$	3,468	$	6,392

See accompanying notes to consolidated financial statements.

5

CF BANKSHARES INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands except per share data)

(Unaudited)

			Non-voting		Additional				Accumulated Other				Total
	Common		Common		Paid-In		Retained		Comprehensive		Treasury		Stockholders'
Three months ended March 31, 2022	Stock		Stock		Capital		Earnings		Loss		Stock		Equity
Balance at January 1, 2022	$	55	$	13	$	88,528	$	44,084	$	(170)	$	(7,180)	$	125,330
Net income								4,518						4,518
Other comprehensive loss										(1,050)				(1,050)
Issuance of 34,000 stock based incentive plan shares, net of forfeitures		-				-								-
Restricted stock expense, net of forfeitures						180								180
Acquisition of 2,180 treasury shares surrendered upon vesting of restricted stock for payment of taxes												(48)		(48)
Purchase of 15,755 treasury shares												(331)		(331)
Cash dividends declared on common stock ($0.04 per share)								(257)						(257)
Balance at March 31, 2022	$	55	$	13	$	88,708	$	48,345	$	(1,220)	$	(7,559)	$	128,342

			Non-voting		Additional				Accumulated Other				Total
	Common		Common		Paid-In		Retained		Comprehensive		Treasury		Stockholders'
Three Months ended March 31, 2021	Stock		Stock		Capital		Earnings		Income		Stock		Equity
Balance at January 1, 2021	$	54	$	13	$	87,637	$	26,479	$	96	$	(4,069)	$	110,210
Net income								6,421						6,421
Other comprehensive loss										(29)				(29)
Issuance of 68,460 stock based incentive plan shares, net of forfeitures		-				-								-
Restricted stock expense, net of forfeitures						161								161
Stock options exercised						106								106
Acquisition of 1,169 treasury shares surrendered upon vesting of restricted stock for payment of taxes						-						(22)		(22)
Cash dividends declared on common stock ($0.03 per share)				-		-		(196)						(196)
Balance at March 31, 2021	$	54	$	13	$	87,904	$	32,704	$	67	$	(4,091)	$	116,651

See accompanying notes to consolidated financial statements.

6

CF BANKSHARES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands, except per share data)

(Unaudited)

	Three months ended March 31,
	2022		2021
Net Income	$	4,518	$	6,421
Adjustments to reconcile net income to net cash from (used by) operating activities:
Depreciation		115		97
Amortization, net		(185)		(711)
Deferred income tax (benefit)		(451)		(8)
Originations of loans held for sale		(85,180)		(920,058)
Proceeds from sale of loans held for sale		103,581		763,245
Net gains on sales of residential mortgage loans		(557)		(6,360)
Loss on disposal of premises and equipment		-		3
Earnings on bank owned life insurance		(146)		(90)
Gain on redemption of life insurance policies		-		(380)
Stock-based compensation expense		180		161
Net change in:
Accrued interest receivable and other assets		(1,801)		5,429
Operating lease right-of-use asset		143		102
Operating lease right-of-use liability		(143)		(112)
Accrued interest payable and other liabilities		459		(10,141)
Net cash from (used by) operating activities		20,533		(162,402)
Cash flows used by investing activities:
Available-for-sale securities:
Maturities, prepayments and calls		2,005		2,007
Purchases		-		(3,095)
Purchase of bank owned life insurance		-		(8,000)
Loan and lease originations and payments, net		(65,281)		(54,838)
Additions to premises and equipment		(278)		(139)
Purchase of FRB and FHLB stock		(11)		(317)
Purchase of other investments		-		(348)
Return of investment-joint ventures		107		136
Proceeds from the redemption of life insurance policies		-		658
Net cash used by investing activities		(63,458)		(63,936)
Cash flows from financing activities:
Net change in deposits		52,434		207,310
Proceeds from FHLB advances and other debt		-		96,500
Repayments on FHLB advances and other debt		(6,500)		(116,965)
Net change in warehouse line of credit		-		(56,067)
Net change in advances by borrowers for taxes and insurance		(674)		(108)
Cash dividends paid on common stock		(257)		(196)
Proceeds from exercise of stock options		-		106
Acquisition of treasury shares surrendered upon vesting of restricted stock for payment of taxes		(48)		(22)
Purchase of treasury shares		(331)		-
Net cash from financing activities		44,624		130,558
Net change in cash and cash equivalents		1,699		(95,780)
Beginning cash and cash equivalents		166,591		221,594
Ending cash and cash equivalents	$	168,290	$	125,814
Supplemental cash flow information:
Interest paid	$	1,919	$	3,108
Supplemental noncash disclosures:
Loans transferred from held for sale to portfolio		1,674		15,885
Investment payable on limited partnerships		-		521
Initial recognition of operating right-of-use lease asset		-		252
Initial recognition of operating right-of-use lease liability		-		252

See accompanying notes to consolidated financial statements.

7

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:

The consolidated financial statements include CF Bankshares Inc. (the “Holding Company”) and its wholly-owned subsidiary, CFBank, National Association (“CFBank”). The Holding Company and CFBank are sometimes collectively referred to herein as the “Company”. Intercompany transactions and balances are eliminated in consolidation. The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in compliance with U.S. generally accepted accounting principles (GAAP). Because this report is based on an interim period, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

In the opinion of the management of the Company, the accompanying unaudited interim consolidated financial statements include all adjustments necessary for a fair presentation of the Company’s financial condition and the results of operations for the periods presented. These adjustments are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q. The financial performance reported for the Company for the three months ended March 31, 2022 is not necessarily indicative of the results that may be expected for the full year. This information should be read in conjunction with the Company’s latest Annual Report to Stockholders and Annual Report on Form 10-K on file with the SEC. Reference is made to the accounting policies of the Company described in Note 1 to the Audited Consolidated Financial Statements contained in the Company’s 2021 Annual Report to Stockholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (referred to herein as the “2021 Audited Financial Statements”). The Company has consistently followed those policies in preparing this Form 10-Q.

Loans and Leases: Loans and leases that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, adjusted for purchase premiums and discounts, deferred loan fees and costs and an allowance for loan and lease losses (ALLL). Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level yield method without anticipating prepayments.

The accrual of interest income on all classes of loans, except other consumer loans, is discontinued and the loan is placed on nonaccrual status at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Other consumer loans are typically charged off no later than 90 days past due. Past due status is based on the contractual terms of the loan for all classes of loans. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Commercial, multi-family residential real estate loans and commercial real estate loans placed on nonaccrual status are individually classified as impaired loans.

All interest accrued but not received for each loan placed on nonaccrual status is reversed against interest income in the period in which it is placed on nonaccrual status. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual status. Loans are considered for return to accrual status provided all the principal and interest amounts that are contractually due are brought current, there is a current and well documented credit analysis, there is reasonable assurance of repayment of principal and interest, and the customer has demonstrated sustained, amortizing payment performance of at least six months.

Allowance for Loan and Lease Losses (ALLL): The ALLL is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required 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. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that CFBank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans within any loan class for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (TDRs) and classified as impaired.

8

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

Factors considered by management in determining impairment for all loan classes include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

All substandard loans within the commercial, multi-family residential, commercial real estate and construction segments are individually evaluated for impairment when they are 90 days past due, or earlier than 90 days past due if information regarding the payment capacity of the borrower indicates that payment in full according to the loan terms is doubtful. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate, or at the fair value of collateral, less costs to sell, if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and single-family residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

TDRs of all classes of loans are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using each loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. If the payment of the loan is dependent on the sale of the collateral, then costs to liquidate the collateral are included when determining the impairment. For TDRs that subsequently default, the amount of reserve is determined in accordance with the accounting policy for the ALLL.

Interest income on all classes of impaired loans that are on nonaccrual status is recognized in accordance with the accounting policy for nonaccrual loans. Cash receipts on all classes of impaired loans that are on nonaccrual status are generally applied to the principal balance outstanding. Interest income on all classes of impaired loans that are not on nonaccrual status is recognized on the accrual method. TDRs may be classified as accruing if the borrower has been current for a period of at least six months with respect to loan payments and management expects that the borrower will be able to continue to make payments in accordance with the terms of the restructured note.

The general reserve component covers non-impaired loans of all classes and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by loan class and is based on the actual loss history experienced by the Company over a three-year period. The general component is calculated based on CFBank’s loan balances and actual three-year historical loss rates. For loans with little or no actual loss experience, industry estimates are used based on loan segment. This loss experience is supplemented with other economic and judgmental factors based on the risks present for each loan class. These economic and judgmental factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

CFBank’s charge-off policy for commercial loans, single-family residential real estate loans, multi-family residential real estate loans, commercial real estate loans, construction loans and home equity lines of credit requires management to record a specific reserve or charge-off as soon as it is apparent that the borrower is troubled and there is, or likely will be, a collateral shortfall related to the estimated value of the collateral securing the loan. Other consumer loans are typically charged off no later than 90 days past due.

Joint Ventures: The Holding Company has contributed funds into a series of joint ventures (equity stake) for the purpose of allocating excess liquidity into higher earning assets while diversifying its revenue sources. The joint ventures are engaged in shorter term operating activities related to single family real estate developments. Income is recognized based on a rate of return on the outstanding investment balance. As units are sold, the Holding Company receives an additional incentive payment, which is recognized as income. Under ASU 2016-15, the Company has elected the nature of distribution approach to recognize returns from equity method investments. Returns on investment are classified as cash flows from operating activities and returns of investment are classified as investing activities.

Low Income Housing Tax Credits (LIHTC): The Company has invested in low income housing tax credits through funds that assist corporations in investing in limited partnerships and limited liability companies that own, develop and operate low income residential rental properties for purposes of qualifying for the Housing Tax credit. These investments are accounted for under the proportional amortization method which recognizes the amortization of the investment in proportion to the tax credit and other tax benefits received.

9

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

Earnings Per Common Share: The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common stockholders for the period are allocated between common stockholders and participating securities (unvested share-based payment awards) according to dividends declared (or accumulated) and participation rights in undistributed earnings. The factors used in the earnings per share computation follow:

	Three months ended
	March 31,
	2022		2021
	(unaudited)
Basic
Net income	$	4,518	$	6,421
Earnings allocated to participating securities		-		-
Net income allocated to common stockholders	$	4,518	$	6,421
Weighted average common shares outstanding including unvested share-based payment awards		6,505,710		6,623,970
Less: Unvested share-based payment awards-2019 Plan		(87,829)		(86,219)
Average shares		6,417,881		6,537,751
Basic earnings per common share	$	0.70	$	0.98
Diluted
Net earnings allocated to common stockholders	$	4,518	$	6,421
Add back: Preferred Dividends on Series B preferred stock and accretion of discount		-		-
Net earnings allocated to common stockholders	$	4,518	$	6,421
Weighted average common shares outstanding for basic earnings per common share		6,417,881		6,537,751
Add: Dilutive effects of assumed exercises of stock options		42,670		46,621
Add: Dilutive effects of unvested share-based payment awards-2019 Plan		87,829		86,219
Average shares and dilutive potential common shares		6,548,380		6,670,591
Diluted earnings per common share	$	0.69	$	0.96

Dividend Restrictions: Banking regulations require us to maintain certain capital levels and may limit the dividends paid by CFBank to the Holding Company or by the Holding Company to stockholders. The ability of the Holding Company to pay dividends on its common stock is dependent upon the amount of cash and liquidity available at the Holding Company level, as well as the receipt of dividends and other distributions from CFBank to the extent necessary to fund such dividends. The Holding Company is a legal entity that is separate and distinct from CFBank, which has no obligation to make any dividends or other funds available for the payment of dividends by the Holding Company. The Holding Company also is subject to various legal and regulatory policies and guidelines impacting the Holding Company’s ability to pay dividends on its stock. In addition, the Holding Company’s ability to pay dividends on its stock is conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities. Finally, under the terms of the Holding Company’s fixed-to-floating rate subordinated notes, the Holding Company’s ability to pay dividends on its stock is conditioned upon the Holding Company continuing to make required principal and interest payments, and not incurring an event of default, with respect to the subordinated notes.

Future Accounting Matters:

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Once effective, ASU 2016-13 will significantly change current guidance for recognizing impairment of financial instruments. Current guidance requires an "incurred loss" methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. ASU 2016-13 replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to inform credit loss estimates. The ASU requires an organization to estimate all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. Additional disclosures are required. ASU 2016-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. Under the new guidance, entities will determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. Any credit loss will be recognized as an allowance for credit losses on available-for-sale debt securities rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. As a result,

10

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

entities will recognize improvements to estimated credit losses on available-for-sale debt securities immediately in earnings rather than as interest income over time, as currently required. ASU 2016-13 eliminates the current accounting model for purchased credit impaired loans and debt securities. Instead, purchased financial assets with credit deterioration will be recorded gross of estimated credit losses as of the date of acquisition and the estimated credit losses amounts will be added to the allowance for credit losses. Thereafter, entities will account for additional impairment of such purchased assets using the models listed above. In October 2019, the FASB voted to extend the implementation of ASU No. 2016-13 for certain financial institutions including smaller reporting companies. As a result, ASU 2016-13 will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company is continuing to evaluate the potential impact on the Company’s financial statements and disclosures. Management has been running and evaluating various scenarios. At this time, the estimated impact on the Company’s consolidated financial statements, including disclosures, cannot be reasonably determined.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is implementing a transition plan to identify and modify its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The Company is continuing to assess ASU 2020-04 and its impact on the Company's transition away from LIBOR for its loan and other financial instruments.

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. In the opinion of management, the disposition or ultimate resolution of such claims and lawsuits is not anticipated to have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

NOTE 2 – REVENUE RECOGNITION

Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The majority of our revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as our loans, letters of credit, derivatives and investment securities, as well as revenue generated from our mortgage activities related to net gains on sale of loans.

All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within Noninterest Income. Descriptions of our revenue-generating activities that are within the scope of ASC 606, which are presented in our income statements as components of Noninterest Income are as follows:

Service charges on deposit accounts - these represent general service fees for monthly account maintenance and activity, or transaction-based fees, and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payments for such performance obligations are generally received at the time the performance obligations are satisfied. 

11

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

NOTE 3 – SECURITIES

The following tables summarize the amortized cost and fair value of the available-for-sale securities portfolio at March 31, 2022 and December 31, 2021 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income (loss):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2022 (unaudited)
Corporate debt	$	9,977	$	-	$	1,477	$	8,500
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		4,542		3		71		4,474
Mortgage-backed securities - residential		29		1		-		30
Total	$	14,548	$	4	$	1,548	$	13,004

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2021
Corporate debt	$	9,976	$	-	$	226	$	9,750
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		6,551	$	31	$	21	$	6,561
Mortgage-backed securities - residential		35		1		-		36
Total	$	16,562	$	32	$	247	$	16,347

There was no other-than-temporary impairment recognized in accumulated other comprehensive income (loss) for securities available for sale at March 31, 2022 or March 31, 2021.

There were no sales of securities during the three months ended March 31, 2022 and 2021.

The amortized cost and fair value of debt securities at March 31, 2022 and December 31, 2021 are shown in the table below by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	March 31, 2022					December 31, 2021
	(unaudited)
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	2,004	$	2,005	$	3,504	$	3,518
Due from one to five years		2,539		2,469		3,047		3,043
Due from five to ten years		9,976		8,500		9,976		9,750
Mortgage-backed securities - residential		29		30		35		36
Total	$	14,548	$	13,004	$	16,562	$	16,347

Fair value of securities pledged as collateral was as follows:

	March 31, 2022		December 31, 2021
	(unaudited)
Pledged as collateral for:
FHLB advances	$	987	$	1,016
Public deposits		493		501
Mortgage banking derivatives		-		1,504
Total	$	1,480	$	3,021

12

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

At March 31, 2022 and December 31, 2021, there were no holdings of securities of any one issuer in an amount greater than 10% of stockholders’ equity.

The following table summarizes securities with unrealized losses at March 31, 2022 and December 31, 2021, aggregated by major security type and length of time in a continuous unrealized loss position.

March 31, 2022 (unaudited)	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Corporate debt	$	8,500	$	1,477	$	-	$	-	$	8,500	$	1,477
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		1,496		8		1,474		63		2,970		71
Total temporarily impaired	$	9,996	$	1,485	$	1,474	$	63	$	11,470	$	1,548

December 31, 2021	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Corporate debt	$	9,750	$	226	$	-	$	-	$	9,750	$	226
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury	$	3,024	$	21	$	-	$	-	$	3,024	$	21
Total temporarily impaired	$	12,774	$	247	$	-	$	-	$	12,774	$	247

The unrealized losses at March 31, 2022 and December 31, 2021 were related to one corporate debt security and multiple U.S. Treasuries. Because the decline in fair value was attributable to changes in market conditions, and not credit quality, and because the Company did not have the intent to sell these securities and it was likely that it would not be required to sell these securities before their anticipated recovery, the Company did not consider these securities to be other-than-temporarily impaired at March 31, 2022 and December 31, 2021.

‎

13

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

NOTE 4 – LOANS AND LEASES

The following table presents the recorded investment in loans and leases by portfolio segment. The recorded investment in loans and leases includes the principal balance outstanding adjusted for purchase premiums and discounts, and deferred loan fees and costs.

	March 31, 2022		December 31, 2021
	(unaudited)
Commercial (1)	$	362,964	$	336,881
Real estate:
Single-family residential		376,475		346,797
Multi-family residential		74,064		76,785
Commercial		361,861		359,562
Construction		95,161		83,360
Consumer:
Home equity lines of credit		24,398		24,228
Other		1,913		2,044
Subtotal		1,296,836		1,229,657
Less: ALLL		(15,520)		(15,508)
Loans and leases, net	$	1,281,316	$	1,214,149

⁽¹⁾Includes $21,765 and $23,157 of commercial leases at March 31, 2022 and December 31, 2021, respectively.

Included in Commercial loans at March 31, 2022 and December 31, 2021, were $387 and $445, respectively, of loans originated under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”). The Coronavirus Aid, Relief, and Economic Security Act of 2020, as amended (the “CARES Act”), authorized the SBA to temporarily guarantee loans under a new 7(a) loan program, the PPP, to provide funding to small businesses to pay certain payroll costs and benefits, and other expenses, during the COVID-19 pandemic. These loans are 100% guaranteed by the SBA and the full principal amount of the loans may qualify for forgiveness. The loans we originated have a maturity of two years, an interest rate of 1.00% and loan payments were deferred for the initial six months (which deferral period was subsequently extended to 10 months pursuant to the Paycheck Protection Program Flexibility Act of 2020). The majority of these loans have been pledged as collateral for borrowings by the Company under the FRB Paycheck Protection Program Lending Facility (“PPPLF”). See Note 8 - FHLB Advances and Other Debt for additional information.

Mortgage Purchase Program

CFBank previously participated in a Mortgage Purchase Program with Northpointe Bank (Northpointe), a Michigan banking corporation, from December 2012 until CFBank discontinued its participation in the program in the first quarter of 2021. Pursuant to the terms of a participation agreement, CFBank purchased participation interests in loans made by Northpointe related to fully underwritten and pre-sold mortgage loans originated by various prescreened mortgage brokers located throughout the U.S.  The underlying loans were individually (MERS) registered loans which were held until funded by the end investor. The mortgage loan investors included Fannie Mae and Freddie Mac, and other major financial institutions.  This process on average took approximately 14 days.  Given the short-term holding period of the underlying loans, common credit risks (such as past due, impairment and TDR, nonperforming, and nonaccrual classification) were substantially reduced. Therefore, no allowance was allocated by CFBank to these loans. These loans were 100% risk rated for CFBank capital adequacy purposes. Under the participation agreement, CFBank agreed to purchase a 95% ownership/participation interest in each of the aforementioned loans, and Northpointe maintained a 5% ownership interest in each loan it participated. CFBank exited this program during the first quarter of 2021 and had no loans outstanding under the program at March 31, 2022 and December 31, 2021.

Allowance for Loan and Lease Losses

The ALLL is a valuation allowance for probable incurred credit losses in the loan portfolio based on management’s evaluation of various factors including 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. A provision for loan and lease losses is charged to operations based on management’s periodic evaluation of these and other pertinent factors described in Note 1 to the 2021 Audited Financial Statements.

14

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

The following tables present the activity in the ALLL by portfolio segment for the three months ended March 31, 2022:

	Three months ended March 31, 2022 (unaudited)
			Real Estate								Consumer
	Commercial		Single-family		Multi-family		Commercial		Construction		Home Equity lines of credit		Other		Total
Beginning balance	$	4,127	$	3,348	$	827	$	5,034	$	1,744	$	272	$	156	$	15,508
Addition to (reduction in) provision for loan losses		300		150		(40)		(400)		-		-		(10)		-
Charge-offs		-		-		-		-		-		-		-		-
Recoveries		-		8		-		-		-		4		-		12
Ending balance	$	4,427	$	3,506	$	787	$	4,634	$	1,744	$	276	$	146	$	15,520

The following table presents the activity in the ALLL by portfolio segment for the three months ended March 31, 2021:

	Three months ended March 31, 2021 (unaudited)
			Real Estate								Consumer
	Commercial		Single-family		Multi-family		Commercial		Construction		Home Equity lines of credit		Other		Total
Beginning balance	$	3,426	$	1,299	$	467	$	9,184	$	2,254	$	276	$	116	$	17,022
Addition to (reduction in) provision for loan losses		(55)		525		10		(500)		(25)		-		45		-
Charge-offs		-		-		-		-		-		-		-		-
Recoveries		56		3		-		-		-		5		-		64
Ending balance	$	3,427	$	1,827	$	477	$	8,684	$	2,229	$	281	$	161	$	17,086

The following table presents the balance in the ALLL and the recorded investment in loans and leases by portfolio segment and based on the impairment method as of March 31, 2022 (unaudited):

			Real Estate								Consumer
	Commercial		Single- ‎family		Multi- ‎family		Commercial		Construction		Home Equity ‎lines of credit		Other		Total
ALLL:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	6	$	-	$	-	$	-	$	6
Collectively evaluated for impairment		4,427		3,506		787		4,628		1,744		276		146		15,514
Total ending allowance balance	$	4,427	$	3,506	$	787	$	4,634	$	1,744	$	276	$	146	$	15,520
Loans:
Individually evaluated for impairment	$	139	$	98	$	-	$	777	$	-	$	-	$	-	$	1,014
Collectively evaluated for impairment		362,825		376,377		74,064		361,084		95,161		24,398		1,913		1,295,822
Total ending loan balance	$	362,964	$	376,475	$	74,064	$	361,861	$	95,161	$	24,398	$	1,913	$	1,296,836

15

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

The following table presents the balance in the ALLL and the recorded investment in loans and leases by portfolio segment and based on the impairment method as of December 31, 2021:

			Real Estate								Consumer
	Commercial		Single- ‎family		Multi- ‎family		Commercial		Construction		Home Equity ‎lines of credit		Other		Total
ALLL:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	20	$	-	$	-	$	-	$	20
Collectively evaluated for impairment		4,127		3,348		827		5,014		1,744		272		156		15,488
Total ending allowance balance	$	4,127	$	3,348	$	827	$	5,034	$	1,744	$	272	$	156	$	15,508
Loans:
Individually evaluated for impairment	$	221	$	99	$	-	$	2,658	$	-	$	-	$	-	$	2,978
Collectively evaluated for impairment		336,660		346,698		76,785		356,904		83,360		24,228		2,044		1,226,679
Total ending loan balance	$	336,881	$	346,797	$	76,785	$	359,562	$	83,360	$	24,228	$	2,044	$	1,229,657

The following table presents loans individually evaluated for impairment by class of loans as of and for the period ended March 31, 2022. The unpaid principal balance is the contractual principal balance outstanding. The recorded investment is the unpaid principal balance adjusted for partial charge-offs, purchase premiums and discounts, and deferred loan fees and costs. The table presents accrual basis interest income recognized during the three months ended March 31, 2022. Cash payments of interest on these loans during the three months ended March 31, 2022 totaled $30.

							Three months ended
	As of March 31, 2022						March 31, 2022
	(unaudited)						(unaudited)
	Unpaid Principal Balance		Recorded Investment		ALLL Allocated		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Real estate:
Commercial:
Owner occupied	$	-	$	-	$	-	$	-	$	-
Total with no allowance recorded		-		-		-		-		-
With an allowance recorded:
Commercial (1)		403		139		-		165		1
Real estate:
Single-family residential (1)		96		98		-		99		1
Commercial:
Non-owner occupied		777		777		6		1,399		17
Total with an allowance recorded		1,276		1,014		6		1,663		19
Total	$	1,276	$	1,014	$	6	$	1,663	$	19

⁽¹⁾Allowance recorded in an amount less than $1 has been rounded down to zero.

16

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2021. The unpaid principal balance is the contractual principal balance outstanding. The recorded investment is the unpaid principal balance adjusted for partial charge-offs, purchase premiums and discounts, and deferred loan fees and costs. The table presents accrual basis interest income recognized during the three months ended March 31, 2021. Cash payments of interest during the three months ended March 31, 2021 totaled $41.

							Three months ended
	As of December 31, 2021						March 31, 2021
							(unaudited)
	Unpaid Principal Balance		Recorded Investment		ALLL Allocated		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial:
Owner occupied	$	-	$	-	$	-	$	-	$	-
Total with no allowance recorded		-		-		-		-		-
With an allowance recorded:
Commercial (1)		485		221		-		78		2
Real estate:
Single-family residential (1)		99		99		-		103		1
Commercial:
Non-owner occupied		2,658		2,658		20		2,711		38
Total with an allowance recorded		3,242		2,978		20		2,892		41
Total	$	3,242	$	2,978	$	20	$	2,892	$	41

The following table presents the recorded investment in nonperforming loans by class of loans:

	March 31, 2022		December 31, 2021
	(unaudited)
Loans past due over 90 days still on accrual	$	-	$	-
Nonaccrual loans:
Commercial		139		147
Real estate:
Single-family residential		653		656
Consumer:
Home equity lines of credit:
Originated for portfolio		153		153
Purchased for portfolio		61		41
Total nonaccrual		1,006		997
Total nonaccrual and nonperforming loans	$	1,006	$	997

Nonaccrual loans include both smaller balance single-family mortgage and consumer loans that are collectively evaluated for impairment and individually classified impaired loans. There were no loans 90 days or more past due and still accruing interest at March 31, 2022 or December 31, 2021.

17

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

The following table presents the aging of the recorded investment in past due loans and leases by class of loans as of March 31, 2022 (unaudited):

	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Nonaccrual Loans Not > 90 days Past Due
Commercial	$	-	$	-	$	-	$	-	$	362,964	$	139
Real estate:
Single-family residential		169		-		563		732		375,743		90
Multi-family residential		-		-		-		-		74,064		-
Commercial:
Non-owner occupied		-		-		-		-		181,662		-
Owner occupied		-		-		-		-		135,601		-
Land		-		-		-		-		44,598		-
Construction		-		-		-		-		95,161		-
Consumer:
Home equity lines of credit:
Originated for portfolio		-		-		153		153		24,082		-
Purchased for portfolio		-		-		61		61		102		-
Other		-		-		-		-		1,913		-
Total	$	169	$	-	$	777	$	946	$	1,295,890	$	229

The following table presents the aging of the recorded investment in past due loans and leases by class of loans as of December 31, 2021:

	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Nonaccrual Loans Not > 90 days Past Due
Commercial	$	-	$	-	$	-	$	-	$	336,881	$	147
Real estate:
Single-family residential		2,144		652		563		3,359		343,438		93
Multi-family residential		-		-		-		-		76,785		-
Commercial:
Non-owner occupied		-		-		-		-		185,130		-
Owner occupied		-		-		-		-		134,352		-
Land		-		-		-		-		40,080		-
Construction		-		-		-		-		83,360		-
Consumer:
Home equity lines of credit:
Originated for portfolio		2		-		153		155		23,909		-
Purchased for portfolio		-		-		41		41		123		-
Other		-		-		-		-		2,044		-
Total	$	2,146	$	652	$	757	$	3,555	$	1,226,102	$	240

18

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

Short-term Loan Deferrals

Under the CARES Act, as amended by the Consolidated Appropriations Act, 2021, financial institutions are permitted to not classify loan modifications as TDRs that were related to the impact of COVID-19 if:

The modifications were made between March 1, 2020 and the earlier of January 1, 2022 or 60 days after the end of the public health emergency, and

The underlying loans were not more than 30 days past due as of December 31, 2019.

We implemented a loan modification program in accordance with the CARES Act to provide temporary relief to borrowers that met the requirements under the CARES Act. The program allowed for deferral of payments for up to 90 days, which we could extend for up to an additional 90 days at our option. The deferred payments and accrued interest during the deferral period were due and payable on or before the maturity of the loans. At March 31, 2022, there were no loans remaining on temporary deferrals under this program.

Troubled Debt Restructurings (TDRs):

From time to time, the terms of certain loans are modified as TDRs, where concessions are granted to borrowers experiencing financial difficulties. The modification of the terms of such loans may include one or a combination of the following: a reduction of the stated interest rate of the loan; an increase in the stated rate of interest lower than the current market rate for new debt with similar risk; an extension of the maturity date; or a change in the payment terms.

As of March 31, 2022 and December 31, 2021, TDRs totaled $1,014 and $2,978, respectively. The Company allocated $6 and $20 of specific reserves to loans whose terms had been modified in TDRs as of March 31, 2022 and December 31, 2021, respectively. The Company had not committed to lend any additional amounts as of March 31, 2022 or December 31, 2021 to customers with outstanding loans classified as nonaccrual TDRs.

During the three months ended March 31, 2022 and March 31, 2021, there were no loans modified as a TDR.

There were no TDRs in payment default or that became nonperforming during the quarters ended March 31, 2022 and March 31, 2021. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms, at which time the loan is re-evaluated to determine whether an impairment loss should be recognized, either through a write-off or specific valuation allowance, so that the loan is reported, net, at the present value of estimated future cash flows, or at the fair value of collateral, less cost to sell, if repayment is expected solely from the collateral.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

Nonaccrual loans include loans that were modified and identified as TDRs and the loans are not performing. At March 31, 2022 and at December 31, 2021, nonaccrual TDRs were as follows:

	March 31, 2022		December 31, 2021
	(unaudited)
Commercial	$	139	$	147
Total	$	139	$	147

Nonaccrual loans at March 31, 2022 and December 31, 2021 do not include $875 and $2,831, respectively, of TDRs where customers have established a sustained period of repayment performance, generally six months, the loans are current according to their modified terms and repayment of the remaining contractual payments is expected. These loans are included in total impaired loans.

19

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. Management analyzes loans individually by classifying the loans as to credit risk. This analysis includes commercial, commercial real estate and multi-family residential real estate loans. Internal loan reviews for these loan types are performed at least annually, and more often for loans with higher credit risk. Adjustments to loan risk ratings are made based on the reviews and at any time information is received that may affect risk ratings. The following definitions are used for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of CFBank’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that there will be some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Loans not meeting the criteria to be classified into one of the above categories are considered to be not rated or pass-rated loans. Loans listed as not rated are primarily groups of homogeneous loans. Past due information is the primary credit indicator for groups of homogenous loans. Loans listed as pass-rated loans are loans that are subject to internal loan reviews and are determined not to meet the criteria required to be classified as special mention, substandard or doubtful.

The recorded investment in loans and leases by risk category and by class of loans and leases as of March 31, 2022 and based on the most recent analysis performed follows.

(unaudited)	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	227	$	362,598	$	-	$	-	$	139	$	362,964
Real estate:
Single-family residential		375,822		-		-		653		-		376,475
Multi-family residential		-		74,064		-		-		-		74,064
Commercial:
Non-owner occupied		-		180,886		-		776		-		181,662
Owner occupied		-		133,776		1,825		-		-		135,601
Land		-		44,598		-		-		-		44,598
Construction		702		93,928		531		-		-		95,161
Consumer:
Home equity lines of credit:
Originated for portfolio		24,082		-		-		153		-		24,235
Purchased for portfolio		102		-		-		61		-		163
Other		1,913		-		-		-		-		1,913
	$	402,848	$	889,850	$	2,356	$	1,643	$	139	$	1,296,836

20

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

The recorded investment in loans and leases by risk category and by class of loans and leases as of December 31, 2021 follows.

	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	-	$	336,660	$	-	$	74	$	147	$	336,881
Real estate:
Single-family residential		346,141		-		-		656		-		346,797
Multi-family residential		-		76,785		-		-		-		76,785
Commercial:
Non-owner occupied		-		182,472		-		2,658		-		185,130
Owner occupied		-		132,470		1,882		-		-		134,352
Land		-		40,080		-		-		-		40,080
Construction		-		82,825		535		-		-		83,360
Consumer:
Home equity lines of credit:
Originated for portfolio		23,911		-		-		153		-		24,064
Purchased for portfolio		123		-		-		41		-		164
Other		2,044		-		-		-		-		2,044
	$	372,219	$	851,292	$	2,417	$	3,582	$	147	$	1,229,657

Leases:

The following lists the components of the net investment in direct financing leases:

	March 31, 2022		December 31, 2021
	(unaudited)
Total minimum lease payments to be received	$	23,817	$	25,488
Less: unearned income		(2,100)		(2,385)
Plus: Indirect initial costs		48		54
Net investment in direct financing leases	$	21,765	$	23,157

The following summarizes the future minimum lease payments receivable in fiscal year 2022 and in subsequent fiscal years:

2022, excluding the three months ended March 31, 2022	$	4,789
2023		6,137
2024		5,732
2025		4,795
2026		2,087
Thereafter		277
Total future minimum payments	$	23,817

NOTE 5 – LEASES

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) and all subsequent ASUs that modified Topic 842. For the Company, Topic 842 primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee.

The leases in which the Company is the lessee are comprised of real estate property for branches and offices and for equipment with terms extending through 2032. All of our leases are classified as operating leases, and therefore, were previously not recognized on the Company’s consolidated balance sheets. With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated balance sheets as a right-of-use (“ROU”) asset and a corresponding operating lease liability. The Company does not have any leases classified as finance leases.

21

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

The calculated amount of the ROU assets and lease liabilities are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion which were considered, as applicable, in the calculation of the ROU assets and lease liabilities. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is not readily determinable in our operating leases, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. At March 31, 2022, the weighted-average remaining lease term for the Company’s operating leases was 4.5 years and the weighted-average discount rate was 5.59%.

The Company’s operating lease costs were $143 for the three months ended March 31, 2022 and $103 for the three months ended March 31, 2021. The variable lease costs totaled $84 for the three months ended March 31, 2022 and $84 for the three months ended March 31, 2021. As the Company elected not to separate lease and non-lease components for all classes of underlying assets and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities.

Future minimum operating lease payments as of March 31, 2022 are as follows:

2022, excluding the three months ended March 31, 2022	$	522
2023		553
2024		458
2025		209
2026		114
Thereafter		275
Total future minimum rental commitments		2,131
Less - amounts representing interest		(242)
Total operating lease liabilities	$	1,889

NOTE 6 - FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of asset and liability:

Securities available for sale: The fair value of securities available for sale is determined using pricing models that vary based on asset class and include available trade, bid and other market information or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2).

Derivatives: The fair value of derivatives, which includes yield maintenance provisions, interest rate lock commitments and interest rate swaps, is based on valuation models using observable market data as of the measurement date (Level 2).

TBA mortgage – back securities: To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, the Company enters into either a forward sales contract to sell loans to investors when using best efforts or a trade of “to be announced (TBA)” mortgage-backed securities for mandatory delivery. The forward sales contracts lock in a price for the sale of loans with similar characteristics to the specific rate lock commitments based on a valuation model using observable market data for pricing commitments (Level 2).

22

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

Impaired loans: The fair value of impaired loans with specific allocations of the ALLL is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by a third-party appraisal management company approved by the Board of Directors annually. Once received, the loan officer or a member of the credit department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Appraisals are updated as needed based on facts and circumstances associated with the individual properties. Real estate appraisals typically incorporate measures such as recent sales prices for comparable properties. Appraisers may make adjustments to the sales prices of the comparable properties as deemed appropriate based on the age, condition or general characteristics of the subject property. Management applies an additional discount to real estate appraised values, typically to reflect changes in market conditions since the date of the appraisal if warranted and to cover disposition costs (including selling expenses) based on the intended disposition method of the property. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Loans held for sale: Loans held for sale are carried at fair value, as determined by outstanding commitments from third party investors (Level 2).

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at ‎ March 31, 2022 using Significant ‎Other Observable Inputs
	(Level 2)
	(unaudited)
Financial Assets:
Securities available for sale:
Corporate debt	$	8,500
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		4,474
Mortgage-backed securities - residential		30
Total securities available for sale	$	13,004
Loans held for sale	$	8,470
Derivative assets	$	1,809
TBA Mortgage-back securities	$	71
Financial Liabilities:
Derivative liabilities	$	1,809
Interest rate lock commitments	$	42

23

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

	Fair Value Measurements at ‎ December 31, 2021 using Significant ‎Other Observable Inputs
	(Level 2)
Financial Assets:
Securities available for sale:
Corporate debt	$	9,750
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		6,561
Mortgage-backed securities - residential		36
Total securities available for sale	$	16,347
Loans held for sale	$	27,988
Derivative assets	$	538
Interest rate lock commitments	$	555
Financial Liabilities:
Derivative liabilities		538
TBA Mortgage-backed securities	$	73

The Company had no assets or liabilities measured at fair value on a recurring basis that were measured using Level 1 or Level 3 inputs at March 31, 2022 or December 31, 2021. There were no transfers of assets or liabilities measured at fair value between levels during the periods ended March 31, 2022 and December 31, 2021.

There were no assets or liabilities measured at fair value on a non-recurring basis at March 31, 2022 and December 31, 2021.

There were no write-downs of impaired collateral dependent loans during the three months ended March 31, 2022 or 2021.

Financial Instruments Recorded Using Fair Value Option

The Company has elected the fair value option for loans held for sale. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on loans held for investment. None of these loans were 90 days or more past due or on nonaccrual as of March 31, 2022 or December 31, 2021.

As of March 31, 2022 and December 31, 2021, the aggregate fair value, contractual balance and gain or loss on loans held for sale were as follows:

	March 31, 2022		December 31, 2021
	(unaudited)
Aggregate fair value	$	8,470	$	27,988
Contractual balance		8,562		27,632
Gain (loss)	$	(92)	$	356

The total amount of gains and losses from changes in fair value included in earnings for the three months ended March 31, 2022 and 2021 for loans held for sale were:

	Three months ended March 31,
	2022		2021
	(unaudited)
Interest income	$	172	$	2,220
Interest expense		-		-
Change in fair value		(448)		(6,937)
Total change in fair value	$	(276)	$	(4,717)

24

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

The carrying amounts and estimated fair values of financial instruments at March 31, 2022 were as follows:

	Fair Value Measurements at March 31, 2022 Using:
	Carrying
(unaudited)	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	168,290	$	168,290	$	-	$	-	$	168,290
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		13,004		-		13,004		-		13,004
Equity Securities		5,000		-		5,000		-		5,000
Loans held for sale		8,470		-		8,470		-		8,470
Loans and leases, net		1,281,316		-		-		1,287,102		1,287,102
FHLB and FRB stock		7,326		n/a		n/a		n/a		n/a
Accrued interest receivable		4,966		3		116		4,847		4,966
Derivative assets		1,809		-		1,809		-		1,809
TBA mortgage-back securities		71		-		71		-		71
Financial liabilities
Deposits	$	(1,298,786)	$	(700,624)	$	(590,838)	$	-	$	(1,291,462)
FHLB advances and other borrowings		(83,235)		-		(81,242)		-		(81,242)
Advances by borrowers for taxes and insurance		(2,078)		-		-		(2,078)		(2,078)
Subordinated debentures		(14,893)		-		(15,315)		-		(15,315)
Accrued interest payable		(688)		-		(688)		-		(688)
Derivative liabilities		(1,809)		-		(1,809)		-		(1,809)
Interest rate lock commitments		(42)		-		(42)		-		(42)

The carrying amounts and estimated fair values of financial instruments at December 31, 2021 were as follows:

	Fair Value Measurements at December 31, 2021 Using:
	Carrying
	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	166,591	$	166,591	$	-	$	-	$	166,591
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		16,347		-		16,347		-		16,347
Equity Securities		5,000		-		5,000		-		5,000
Loans held for sale		27,988		-		27,988		-		27,988
Loans and leases, net		1,214,149		-		-		1,231,228		1,231,228
FHLB and FRB stock		7,315		n/a		n/a		n/a		n/a
Accrued interest receivable		4,143		2		91		3,947		4,040
Derivative assets		538		-		538		-		538
Interest rate lock commitments		555		-		555		-		555
Financial liabilities
Deposits	$	(1,246,352)	$	(661,818)	$	(585,214)	$	-	$	(1,247,032)
FHLB advances and other borrowings		(89,727)		-		(90,670)		-		(90,670)
Advances by borrowers for taxes and insurance		(2,752)		-		-		(2,752)		(2,752)
Subordinated debentures		(14,883)		-		(16,051)		-		(16,051)
Accrued interest payable		(228)		-		(228)		-		(228)
Derivative liabilities		(538)		-		(538)		-		(538)
TBA mortgage-backed securities		(73)		-		(73)		-		(73)

The methods and assumptions, not previously presented, used to estimate fair values are described below.

25

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

Cash and Cash Equivalents and Interest-Bearing Deposits in Other Financial Institutions

The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

FHLB and FRB Stock

It is not practical to determine the fair value of FHLB and FRB stock due to restrictions placed on its transferability.

Loans and Leases

Fair values of loans and leases as of March 31, 2022, excluding loans held for sale, are estimated utilizing an exit pricing methodology as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. The discount rate for the discounted cash flow analyses includes a credit quality adjustment. Impaired loans are valued at the lower of cost or fair value as described previously.

Deposits

The fair values disclosed for demand deposits (e.g., interest and noninterest bearing checking, passbook savings, and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

FHLB Advances and Other Debt

The fair values of the Company’s long-term FHLB and credit facility advances are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

The fair values of the Company’s subordinated debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

The PPPLF funding has a fixed rate of 0.35% for all participants; thus the carrying value approximates the estimated fair value and represents a Level 2 measurement.

Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value resulting in a Level 1, 2 or 3 classification, consistent with the asset or liability with which they are associated.

Advances by Borrowers for Taxes and Insurance

The carrying amount of advances by borrowers for taxes and insurance approximates fair value resulting in a Level 3 classification, consistent with the liability with which they are associated.

Off-Balance-Sheet Instruments

The fair value of off-balance-sheet items is not considered material. 

NOTE 7 – SUBORDINATED DEBENTURES

2003 Subordinated debentures:

In December 2003, Central Federal Capital Trust I, a trust formed by the Holding Company, closed a pooled private offering of 5,000 trust preferred securities with a liquidation amount of $1 per security. The Holding Company issued $5,155 of subordinated debentures to the trust in exchange for ownership of all of the common stock of the trust and the proceeds of the preferred securities sold by the trust. The Holding Company is not considered the primary beneficiary of this trust (which is classified as a variable interest entity); therefore, the trust is not consolidated in the Company’s financial statements, but rather the subordinated debentures are shown as a liability. The Holding Company’s investment in the common stock of the trust was $155 and is included in other assets.

26

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

The Holding Company may redeem the subordinated debentures, in whole or in part, in a principal amount with integral multiples of $1, at 100% of the principal amount, plus accrued and unpaid interest. The subordinated debentures mature on December 30, 2033. The subordinated debentures are also redeemable in whole or in part from time to time, upon the occurrence of specific events defined within the trust indenture. There are no required principal payments on the subordinated debentures over the next five years. The Holding Company has the option to defer interest payments on the subordinated debentures for a period not to exceed five consecutive years.

The subordinated debentures have a variable rate of interest, reset quarterly, equal to the three-month London Interbank Offered Rate (LIBOR) plus 2.85%, which was 3.85% at March 31, 2022 and 3.07% at December 31, 2021. 

2018 Fixed-to-floating rate subordinated notes:

In December 2018, the Holding Company entered into subordinated note purchase agreements with certain qualified institutional buyers and completed a private placement of $10 million of fixed-to-floating rate subordinated notes with a maturity date of December 30, 2028 pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder. After payment of approximately $388 of debt issuance costs, the Holding Company’s net proceeds were approximately $9,612.

The subordinated notes initially bear interest at 7.00%, from and including December 20, 2018, to but excluding December 30, 2023, payable semi-annually in arrears on June 30 and December 30 of each year. From and including December 30, 2023, to but excluding December 30, 2028 or the earlier redemption of the notes, the interest rate will reset quarterly to an interest rate equal to the then current three-month LIBOR (but not less than zero) plus 4.14%, payable quarterly in arrears on March 30, June 30, September 30, and December 30 of each year. The Holding Company may, at its option, redeem the notes beginning on December 30, 2023 and on any scheduled interest payment date thereafter. At March 31, 2022, the balance of the subordinated notes, net of unamortized debt issuance costs, was $9,738.

NOTE 8 – FHLB ADVANCES AND OTHER DEBT

FHLB advances and other debt were as follows:

	Weighted
	Average Rate	March 31, 2022		December 31, 2021
		(unaudited)
FHLB fixed rate advances:
Maturities:
2022	0.89%	$	3,500	$	10,000
2023	0.92%		3,500		3,500
2024	1.46%		18,500		18,500
2026	1.45%		16,000		16,000
Thereafter	1.69%		17,000		17,000
Total FHLB fixed rate advances			58,500		65,000
Fixed rate other debt:
FRB PPPLF advances	0.35%		450		450
Variable rate other debt:
Holding Company credit facility	3.85%		24,285		24,277
Total		$	83,235	$	89,727

Each FHLB advance is payable at its maturity date, with a prepayment penalty for fixed-rate advances.

Prior to May 21, 2021, the Holding Company had a term loan in the original principal amount of $5,000 with an additional $10,000 revolving line-of-credit with a third-party bank. That credit facility was refinanced into a new $35 million facility on May 21, 2021. The credit facility is revolving until May 21, 2024, at which time any then-outstanding balance will be converted to a 10-year term note on a graduated 10-year amortization. Borrowings on the credit facility bear interest at a fixed rate of 3.85% until May 21, 2026, and the interest rate then converts to a floating rate equal to PRIME with a floor of 3.25%. The purpose of the credit facility is to provide an additional source of liquidity for the Holding Company and to provide funds for the Holding Company to downstream as additional capital to CFBank to support growth. At March 31, 2022, the Company had an outstanding balance, net of unamortized debt issuance costs, of $24,285 on the facility.

27

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

At March 31, 2022, CFBank had availability in unused lines of credit at two commercial banks in amounts of $50,000 and $15,000. There were no outstanding borrowings on either line at March 31, 2022 and December 31, 2021. Interest on any principal amounts outstanding from time to time under these lines accrues daily at a variable rate based on the commercial bank’s cost of funds and current market returns.

During 2019, CFBank entered into a $25,000 warehouse facility with a commercial bank. The warehouse facility was used to periodically fund loans held for sale from the close (funding) date until they were sold in the secondary market. Borrowings on the facility bore interest at the greater of (a) the 30-day LIBOR plus 2.00% or (b) 4.00% and were secured by the specific loans that were funded. This warehouse facility, which was closed during the third quarter of 2021, had no outstanding balance at March 31, 2022 and December 31, 2021.

During 2020, CFBank entered into an additional $75,000 warehouse facility with a commercial bank. The purpose of the warehouse facility was to periodically fund loans held for sale from the close (funding) date until sold in the secondary market. Borrowings on the facility bore interest at the greater of (a) the 30-day LIBOR plus 2.35% or (b) 2.90% and were secured by the specific loans that were funded. This warehouse facility, which was closed during the second quarter of 2021, had no outstanding balance at March 31, 2022 and December 31, 2021.

The CARES Act amended the SBA loan program, in which CFBank participates, to create the PPP as a guaranteed, unsecured loan program to fund operational costs of eligible businesses, organizations and self-employed persons during COVID-19.  During 2020, CFBank processed 558 PPP loans totaling approximately $126 million. To support the effectiveness of the PPP, the Federal Reserve Board (the “FRB”) introduced the PPPLF to extend credit to financial institutions that made PPP loans, with the related PPP loans used as collateral on the borrowings. The PPPLF borrowings have a fixed interest rate of 0.35% and a maturity equal to the maturity date of the related PPP loans, with the PPP loans maturing two years from the origination date of the PPP loan. If a PPP loan pays off early, the corresponding PPPLF borrowing must be paid off as well. At March 31, 2022, the Company’s PPP loans and related PPPLF funding had a weighted average life of approximately 0.1 years. At March 31, 2022, the principal balance of PPPLF advances outstanding was $450. At December 31, 2021, the Company’s PPP loans and related PPPLF funding had a weighted average life of approximately 0.2 years. At December 31, 2021, the principal balance of PPPLF advances outstanding was $450.

Other than the PPPLF borrowing, there were no outstanding borrowings with the FRB at March 31, 2022 and December 31, 2021.

NOTE 9 – STOCK-BASED COMPENSATION

The Company has two stock-based compensation plans (collectively, the “Plans”), as described below, under which awards are outstanding or may be granted in the future. Total compensation cost that has been charged against income for those Plans totaled $180 and $161, respectively, for the three months ended March 31, 2022 and March 31, 2021. The total income tax effect was $38 and $34, respectively, for the three months ended March 31, 2022 and March 31, 2021.

Both Plans are stockholder-approved plans and authorize stock option grants and restricted stock awards to be made to directors, officers and employees. The 2009 Equity Compensation Plan (the “2009 Plan”), which was approved by stockholders on May 21, 2009, replaced the Company’s 2003 equity compensation plan (the “2003 Plan”) and provided for 36,363 shares, plus any remaining shares available to grant or that are later forfeited or expire under the 2003 Plan, to be made available to be issued as stock option grants, stock appreciation rights or restricted stock awards. On May 16, 2013, the Company’s stockholders approved the First Amendment to the 2009 Plan to increase the number of shares of common stock reserved for stock option grants and restricted stock awards thereunder to 272,727. The 2009 Plan terminated in accordance with its terms on March 19, 2019 and, as a result, no further awards may be granted under the 2009 Plan.

The 2019 Equity Incentive Plan (the “2019 Plan”), which was approved by stockholders on May 29, 2019, authorizes up to 300,000 shares (plus any shares that are subject to grants under the 2009 Plan and that are later forfeited or expire), to be awarded pursuant to stock options, stock appreciation rights, restricted stock or restricted stock units. There were 150,921 shares remaining available for awards of stock options, stock appreciation rights, restricted stock or restricted stock units under the 2019 Plan at March 31, 2022.

Stock Options:

The Plans permit the grant of stock options to directors, officers and employees of the Holding Company and CFBank. Option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of grant, generally have vesting periods ranging from one year to three years, and are exercisable for ten years from the date of grant. Unvested stock options immediately vest upon a change of control.

28

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

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.

There were no options granted during the three months ended March 31, 2022 and March 31, 2021. There were no options exercised during the three months ended March 31, 2022 and 14,544 options exercised during the three months ended March 31, 2021.

A summary of stock option activity in the Plans for the three months ended March 31, 2022 follows (unaudited):

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Intrinsic Value
Outstanding at beginning of year	63,992	$	7.43
Exercised	-		-
Expired	-		-
Cancelled or forfeited	-		-
Outstanding at end of period	63,992	$	7.43	1.3	$	952
Exercisable at end of period	63,992	$	7.43	1.3	$	952

During the three months ended March 31, 2022, there were no stock options canceled, forfeited or expired. Stock options to purchase a total of 1,454 common shares were canceled, forfeited or expired during the three months ended March 31, 2021. As of March 31, 2022, all stock options granted under the Plans were vested.

Restricted Stock Awards:

The Plans also permit the grant of restricted stock awards to directors, officers and employees. Compensation is recognized over the vesting period of the awards based on the fair value of the stock at grant date. The fair value of the stock is determined using the closing share price on the date of grant and shares generally have vesting periods of one year to three years. There were 34,000 shares of restricted stock granted under the Plan during the three months ended March 31, 2022. There were 68,460 shares of restricted stock granted during the three months ended March 31, 2021.

A summary of changes in the Company’s nonvested restricted stock awards as of March 31, 2022 follows (unaudited):

Nonvested Shares	Shares	Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2022	89,895	$	16.32
Granted	34,000		21.72
Vested	(25,312)		17.04
Forfeited	(366)		18.96
Nonvested at March 31, 2022	98,217	$	17.99

As of March 31, 2022 and 2021, the unrecognized compensation cost related to nonvested restricted stock awards granted under the Plans was $1,593 and $1,677, respectively.

There were 366 shares of restricted stock forfeited during the three month period ended March 31, 2022, and 183 shares of restricted stock forfeited during the three months ended March 31, 2021. There were 25,312 shares of restricted stock that vested during the three months ended March 31, 2022, and 5,884 shares of restricted stock that vested during the three months ended March 31, 2021.

29

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

NOTE 10 – REGULATORY CAPITAL MATTERS

CFBank is subject to regulatory capital requirements administered by federal banking agencies. Prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

Prompt corrective action regulations provide five classifications for banking organizations: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If a banking organization is classified as adequately capitalized, regulatory approval is required to accept brokered deposits. If a banking organization is classified as undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

In July 2013, the Holding Company’s primary federal regulator, the FRB, published final rules (the “Basel III Capital Rules”) establishing a new comprehensive capital framework for U.S. banking organizations. The rules implement the Basel Committee's December 2010 framework known as “Basel III” for strengthening international capital standards as well as certain provisions of the Dodd-Frank Act. The Basel III Capital Rules provide higher capital requirements and more restrictive leverage and liquidity ratios than those previously in place. In addition, in order to avoid limitations on capital distributions, such as dividend payments and certain bonus payments to executive officers, the Basel III Capital Rules require insured financial institutions to hold a capital conservation buffer of common equity tier 1 capital above the minimum risk-based capital requirements. The capital conservation buffer was phased in over time, became fully effective on January 1, 2019, and consists of an additional amount of common equity equal to 2.5% of risk-weighted assets. The Basel III Capital Rules revise the regulatory agencies' prompt corrective action framework by incorporating the new regulatory capital minimums and updating the definition of common equity. The Basel III Capital Rules became effective for CFBank on January 1, 2015, and were fully phased in effective January 1, 2019. Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios of Common Equity Tier 1 capital, Tier 1 capital and Total capital, as defined in the regulations, to risk-weighted assets, and of Tier 1 capital to adjusted quarterly average assets (“Leverage Ratio”). CFBank’s implementation of the new rules on January 1, 2015 did not have a material impact on our capital needs or classification.

The Basel III Capital Rules require CFBank to maintain: 1) a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of 4.5%, plus a 2.5% “capital conservation buffer” (resulting in a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of 7.0%); 2) a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, plus the capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.5%); 3) a minimum ratio of Total capital to risk-weighted assets of 8.0%, plus the capital conservation buffer (resulting in a minimum Total capital ratio of 10.5%); and 4) a minimum Leverage Ratio of 4.0%.

The capital conservation buffer is designed to absorb losses during periods of economic stress. Failure to maintain the minimum Common Equity Tier 1 capital ratio plus the capital conservation buffer will result in potential restrictions on a banking institution’s ability to pay dividends, repurchase stock and/or pay discretionary compensation to its employees.

The following tables present actual and required capital ratios as of March 31, 2022 and December 31, 2021 for CFBank under the Basel III Capital Rules. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

	Actual			Minimum Capital Required-Basel III Fully Phased-In			To Be Well Capitalized Under Applicable ‎Regulatory Capital Standards
	Amount		Ratio	Amount		Ratio	Amount		Ratio
March 31, 2022 (unaudited)
Total Capital to risk weighted assets	$	175,997	14.01%	$	131,940	10.50%	$	125,657	10.00%
Tier 1 (Core) Capital to risk weighted assets		160,288	12.76%		106,808	8.50%		100,526	8.00%
Common equity tier 1 capital to risk-weighted assets		160,288	12.76%		87,960	7.00%		81,677	6.50%
Tier 1 (Core) Capital to adjusted total assets (Leverage ratio)		160,288	11.06%		57,959	4.00%		72,449	5.00%

30

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

	Actual			Minimum Capital Required-Basel III Fully Phased-In			To Be Well Capitalized Under Applicable ‎Regulatory Capital Standards
	Amount		Ratio	Amount		Ratio	Amount		Ratio
December 31, 2021
Total Capital to risk weighted assets	$	170,392	14.02%	$	127,588	10.50%	$	121,512	10.00%
Tier 1 (Core) Capital to risk weighted assets		155,195	12.77%		103,286	8.50%		97,210	8.00%
Common equity tier 1 capital to risk-weighted assets		155,195	12.77%		85,059	7.00%		78,983	6.50%
Tier 1 (Core) Capital to adjusted total assets (Leverage ratio)		155,195	11.29%		54,984	4.00%		68,730	5.00%

CFBank converted from a mutual to a stock institution in 1998, and a “liquidation account” was established in the amount of $14,300, which was the net worth reported in the conversion prospectus. The liquidation account represents a calculated amount for the purposes described below, and it does not represent actual funds included in the consolidated financial statements of the Company. Eligible depositors who have maintained their accounts, less annual reductions to the extent they have reduced their deposits, would be entitled to a priority distribution from this account if CFBank liquidated and its assets exceeded its liabilities. Dividends may not reduce CFBank’s stockholder’s equity below the required liquidation account balance.

Dividend Restrictions:

Banking regulations require us to maintain certain capital levels and may limit the dividends paid by CFBank to the Holding Company or by the Holding Company to stockholders. The ability of the Holding Company to pay dividends on its stock is dependent upon the amount of cash and liquidity available at the Holding Company level, as well as the receipt of dividends and other distributions from CFBank to the extent necessary to fund such dividends. The Holding Company is a legal entity that is separate and distinct from CFBank, which has no obligation to make any dividends or other funds available for the payment of dividends by the Holding Company. The Holding Company also is subject to various legal and regulatory policies and guidelines impacting the Holding Company’s ability to pay dividends on its stock. In addition, the Holding Company’s ability to pay dividends on its stock is conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities. Finally, under the terms of the Holding Company’s fixed-to-floating rate subordinated debt, the Holding Company’s ability to pay dividends on its stock is conditioned upon the Holding Company continuing to make required principal and interest payments, and not incurring an event of default, with respect to the subordinated debt.

Additionally, CFBank does not intend to make distributions to the Holding Company that would result in a recapture of any portion of its thrift bad debt reserve as discussed in Note 12-Income Taxes. 

NOTE 11 – DERIVATIVE INSTRUMENTS

Interest-rate swaps:

CFBank utilizes interest-rate swaps as part of its asset/liability management strategy to help manage its interest rate risk position, and does not use derivatives for trading purposes. The notional amount of the interest-rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest-rate swap agreements. CFBank was party to interest-rate swaps with a combined notional amount of $37,348 at March 31, 2022 and $44,887 at December 31, 2021.

The objective of the interest-rate swaps is to protect the related fixed-rate commercial real estate loans from changes in fair value due to changes in interest rates. CFBank has a program whereby it lends to its borrowers at a fixed rate with the loan agreement containing a two-way yield maintenance provision, which will be invoked in the event of prepayment of the loan, and is expected to exactly offset the fair value of unwinding the swap. The yield maintenance provision represents an embedded derivative which is bifurcated from the host loan contract and, as such, the swaps and embedded derivatives are not designated as hedges. Accordingly, both instruments are carried at fair value and changes in fair value are reported in current period earnings. CFBank currently does not have any derivatives designated as hedges.

The counterparty to CFBank’s interest-rate swaps is exposed to credit risk whenever the interest-rate swaps are in a liability position. At March 31, 2022, CFBank had $2,725 in cash pledged as collateral for these derivatives. Should the liability increase beyond the collateral value, CFBank will be required to pledge additional collateral.

31

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

Additionally, CFBank’s interest-rate swap instruments contain provisions that require CFBank to remain well capitalized under regulatory capital standards and to comply with certain other regulatory requirements. The interest-rate swaps may be called by the counterparty if CFBank fails to maintain well-capitalized status under regulatory capital standards or becomes subject to certain adverse regulatory events such as a regulatory cease and desist order. As of March 31, 2022, CFBank was well-capitalized under regulatory capital standards and was not subject to any adverse regulatory events specified in CFBank’s interest-rate swap instruments.

Summary information about the derivative instruments is as follows:

	March 31, 2022		December 31, 2021
	(unaudited)
Notional amount	$	37,348	$	44,887
Weighted average pay rate on interest-rate swaps		4.21%		4.21%
Weighted average receive rate on interest-rate swaps		3.14%		3.00%
Weighted average maturity (years)		6.8		6.9
Fair value of derivative asset	$	1,809	$	538
Fair value of yield derivative liability		(1,809)		(538)

The fair value of the yield maintenance provisions and interest-rate swaps is recorded in other assets and other liabilities, respectively, in the consolidated balance sheet. Changes in the fair value of the yield maintenance provisions and interest-rate swaps are reported currently in earnings, as other noninterest income in the consolidated statements of income. There were no net gains or losses recognized in earnings related to yield maintenance provisions and interest-rate swaps for the three months ended March 31, 2022 or 2021.

Mortgage banking derivatives:

Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market are considered derivatives. These mortgage banking derivatives are not designated in hedge relationships. The Company had approximately $5,777 and $50,312 of interest rate lock commitments related to residential mortgage loans at March 31, 2022 and December 31, 2021, respectively. The fair value of these mortgage banking derivatives was reflected by a derivative liability of ($42) at March 31, 2022 and is included in other liabilities in the consolidated balance sheet. The fair value was reflected by a derivative asset of $555 at December 31, 2021, which was included in other assets in the consolidated balance sheet. Fair values were estimated based on anticipated gains on the sale of the underlying loans. Changes in the fair values of these mortgage banking derivatives are included in net gains on sales of loans.

Mortgage banking activities include two types of commitments: rate lock commitments and forward loan commitments. Rate lock commitments are loans in our pipeline that have an interest rate locked with the customer. The commitments are generally for periods of 30-60 days and are at market rates. In order to mitigate the effect of the interest rate risk inherent in providing rate lock commitments, we economically hedge our commitments by entering into either a forward loan sales contract under best efforts or a trade of “to be announced (TBA)” mortgage-backed securities (“notional securities”) for mandatory delivery. The Company had approximately $3,500 and $53,250 of TBA mortgage-backed securities at March 31, 2022 and December 31, 2021, respectively. The fair value of these TBA mortgage-backed securities was $71 at March 31, 2022 and is included in other assets in the consolidated balance sheet. The fair value of the TBA mortgage-backed securities at December 31, 2021 was ($73) and is included in other liabilities in the consolidated balance sheet. The changes in fair value related to movements in market rates of the rate lock commitments and the forward loan sales contracts and notional securities generally move in opposite directions, and the net impact of changes in these valuations on net income during the loan commitment period is generally inconsequential. The Company has not formally designated these derivatives as a qualifying hedge relationship and, accordingly, accounts for such forward contracts as freestanding derivatives with changes in fair value recorded to earnings each period. 

The following table reflects the amount and market value of mortgage banking derivatives included in the consolidated balance sheet as of the period end (in thousands):

	March 31, 2022				December 31, 2021
	(unaudited)
	Notional Amount		Fair Value		Notional Amount		Fair Value
Assets (Liabilities):
Interest rate commitments	$	5,777	$	(42)	$	50,312	$	555
TBA mortgage-back securities		3,500		71		53,250		(73)

32

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

As of March 31, 2022, CFBank has minimum collateral posting thresholds with certain of its derivative counterparties and has posted cash collateral of $3,847.

The following table represents the notional amount of loans sold during the three months ended March 31, 2022 and 2021 (unaudited):

	Three Months ended
	March 31,
	2022		2021
Notional amount of loans sold	$	85,180	$	756,886

The following table represents the revenue recognized on mortgage activities for the three ended March 31, 2022 and 2021 (unaudited):

	Three Months ended
	March 31,
	2022		2021
Gain on loans sold		61		11,916
Gain (loss) from change in fair value of loans held-for-sale		(448)		(6,937)
Gain (loss) from change in fair value of derivatives		944		1,381
	$	557	$	6,360

NOTE 12 – INCOME TAXES

At March 31, 2022, the Company had a deferred tax asset recorded in the amount of approximately $4,774. At December 31, 2021, the Company had a deferred tax asset recorded of approximately $4,044. At March 31, 2022 and December 31, 2021, the Company had no unrecognized tax benefits recorded. The Company is subject to U.S. federal income tax and is no longer subject to federal examination for years prior to 2018.

Our deferred tax assets are composed of U.S. net operating losses (“NOLs”), and other temporary book to tax differences. When determining the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded as a benefit, the Company conducts a regular assessment of all available information. This information includes, but is not limited to, taxable income in prior periods, projected future income and projected future reversals of deferred tax items. Based on these criteria, the Company determined as of March 31, 2022 that no valuation allowance was required against the net deferred tax asset.

In 2012, the Company completed a recapitalization program pursuant to which the Holding Company sold $22,500 in common stock, which improved the capital levels of CFBank and provided working capital for the Holding Company. The result of the change in stock ownership associated with the stock offering, however, was that the Company incurred an ownership change within the guidelines of Section 382 of the Internal Revenue Code of 1986. At March 31, 2022, the Company had net operating loss carryforwards of $22,253, which expire at various dates from 2024 to 2032. As a result of the ownership change, the Company's ability to utilize carryforwards that arose before the 2012 stock offering closed is limited to $163 per year. Due to this limitation, management determined it is more likely than not that $20,520 of net operating loss carryforwards will expire unutilized. As required by accounting standards, the Company reduced the carrying value of deferred tax assets, and the corresponding valuation allowance, by the $6,977 tax effect of this lost realizability.

Federal income tax laws provided additional deductions, totaling $2,250, for thrift bad debt reserves established before 1988. Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would have totaled $473 at year-end 2021. However, if CFBank were wholly or partially liquidated or otherwise ceases to be a bank, or if tax laws were to change, this amount would have to be recaptured and a tax liability recorded. Additionally, any distributions in excess of CFBank’s current or accumulated earnings and profits would reduce amounts allocated to its bad debt reserve and create a tax liability for CFBank.

The Company records income tax expense based on the federal statutory rate adjusted for the effect of low income housing credits, bank owned life insurance, dividends on equity securities and other miscellaneous items. The effective tax rate was approximately 18.5% and 18.5% for the three months ended March 31, 2022 and March 31, 2021, respectively, which management believes were reasonable estimates for the effective tax rates for such periods.

33

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

The following table summarizes the major components creating differences between income taxes at the federal statutory tax rate and the effective tax rate recorded in the consolidated statements of income for the three months ended March 31, 2022 and 2021:

	For the three months ended ‎ March 31,
	2022	2021
	(unaudited)
Statutory tax rate	21.0%	21.0%
Increase (decrease) resulting from:
Restricted stock	(0.9%)	(0.6%)
Tax exempt earnings on bank owned life insurance	(0.6%)	(0.2%)
Gain on redemption of life insurance policies	0.0%	(1.0%)
Dividends on equity securities	(0.2%)	(0.2%)
Low income housing credits	(0.8%)	(0.5%)
Effective tax rate	18.5%	18.5%

NOTE 13- ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes within each classification of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2022 and 2021 and summarizes the significant amounts reclassified out of each component of accumulated other comprehensive income (loss):

Changes in Accumulated Other Comprehensive Income (Loss) by Component (1)
	Three months ended
	March 31,
	2022		2021
	(unaudited)
	Unrealized Gains and Losses on Available-for-Sale Securities
Accumulated other comprehensive income (loss), beginning of period	$	(170)	$	96
Other comprehensive loss before reclassifications (2)		(1,050)		(29)
Net current-period other comprehensive loss		(1,050)		(29)
Accumulated other comprehensive income (loss), end of period	$	(1,220)	$	67

⁽¹⁾All amounts are net of tax. Amounts in parentheses indicate a reduction of other comprehensive income.

⁽²⁾There were no amounts reclassified out of other comprehensive income for the three months ended March 31, 2022 and 2021.

NOTE 14 - PREFERRED STOCK

On October 25, 2019, the Company entered into a Securities Purchase Agreement with certain accredited investors in a private placement for an aggregate offering price of approximately $25 million, pursuant to which on October 31, 2019, the Holding Company sold shares of the Company’s common stock and shares of a new series of the Company’s Non-Voting Convertible Perpetual Preferred Stock, Series C, par value $0.01 per share (the “Series C Preferred Stock”).

Effective as of the close of business on May 28, 2020, all outstanding shares of the Company’s Series C Preferred Stock were converted into shares of a newly-authorized class of Non-Voting Common Stock of the Company following approval of an amendment to the Company’s Certificate of Incorporation, as amended, by the stockholders of the Company. As of March 31, 2022, there were no shares of Series C Preferred Stock outstanding and an aggregate of 1,260,700 shares of Non-Voting Common Stock outstanding.
‎

34

CF BANKSHARES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

NOTE 15- BRANCH SALE

On December 29, 2020, CFBank entered into a Branch Purchase and Assumption Agreement (the “P&A Agreement”) with Consumers National Bank (“Consumers”) providing for the acquisition by Consumers of two branches of CFBank in Columbiana County, Ohio – CFBank’s drive-up branch location in Wellsville, Ohio and CFBank’s branch location in Calcutta, Ohio (the “Branches”).

On July 16, 2021, Consumers completed its purchase of certain assets and assumption of certain liabilities associated with the Branches. Pursuant to the terms of the P&A Agreement, Consumers assumed certain deposit liabilities and acquired certain loans, as well as cash, real property, personal property and other fixed assets associated with the Branches.

During the third quarter of 2021, the Company recognized a combined gain on sale of deposits of $1.9 million related to the sale of the Branches.

NOTE 16 – SUBSEQUENT EVENT

On April 2, 2022, the Company’s Board of Directors declared a Cash Dividend of $0.04 per share payable to shareholders on April 25, 2022.

35

CF BANKSHARES INC.

PART 1. Item 2

MANAGEMENT DISCUSSION AND ANALYSIS

FORWARD LOOKING STATEMENTS

This quarterly report and other materials we have filed or may file with the Securities and Exchange Commission (“SEC”) contain or may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Reform Act of 1995, which are made in good faith by us. Forward-looking statements include, but are not limited to: (1) projections of revenues, income or loss, earnings or loss per common share, capital structure and other financial items; (2) plans and objectives of the management or Boards of Directors of CF Bankshares Inc. (the “Holding Company”) or CFBank, National Association (“CFBank” and, together with the Holding Company, the “Company”); (3) statements regarding future events, actions or economic performance; and (4) statements of assumptions underlying such statements. Words such as "estimate," "strategy," "may," "believe," "anticipate," "expect," "predict," "will," "intend," "plan," "targeted," and the negative of these terms, or similar expressions, are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Various risks and uncertainties may cause actual results to differ materially from those indicated by our forward-looking statements, including, without limitation, those risks detailed from time to time in our reports filed with the SEC, including those identified in “Item 1A. Risk Factors” of Part I of our Annual Report on Form 10-K filed with SEC for the year ended December 31, 2021, as supplemented by “Item 1A. Risk Factors” of Part II of this Quarterly Report on Form 10-Q.

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

Business Overview

The Holding Company is a financial holding company that owns 100% of the stock of CFBank, which was formed in Ohio in 1892 and converted from a federal savings association to a national bank on December 1, 2016. Prior to December 1, 2016, the Holding Company was a registered savings and loan holding company. Effective as of December 1, 2016 and in conjunction with the conversion of CFBank to a national bank, the Holding Company became a registered bank holding company and elected financial holding status with the Federal Reserve Board (the “FRB”). Effective as of July 27, 2020, the Company changed its name from Central Federal Corporation to CF Bankshares Inc.

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

Most of our deposits and loans come from our market areas. Our principal market area for loans and deposits includes the following counties: Franklin County through our office in Worthington, Ohio and our loan production office in Columbus, Ohio; Delaware County through our Polaris office in Columbus, Ohio; Hamilton County through our offices in Glendale and Blue Ash, Ohio; Cuyahoga County, through our office in Woodmere, Ohio; Summit County through our office in Fairlawn, Ohio and Marion County, Indiana through our loan production office in Indianapolis. Because of CFBank’s concentration of business activities in Ohio, the Company’s financial condition and results of operations depend in large part upon economic conditions in Ohio.

COVID-19 Impact. The World Health Organization declared the coronavirus COVID-19 a pandemic in March 2020. The impacts of the COVID-19 pandemic have resulted in, among other things, stock and global market declines, disruption in business and leisure activities as stay-at-home orders were mandated by state and local governments, significant strain on the health care industry as it addressed the severity of the health crisis, and shifts in the general economy (such as high unemployment, negative GDP expectations, a decline in the Federal funds rates, and unprecedented government stimulus). The dramatic events surrounding the pandemic and the uncertainty about the longevity of the pandemic’s affects will continue to impact future expectations about credit costs and margins and noninterest expenses.

During the COVID-19 pandemic, we assisted numerous existing and new customers through our participation in the Paycheck Protection Program (“PPP”) and by providing temporary loan modifications to loan customers. CFBank originated approximately $126 million of PPP loans during the second quarter of 2020 to over 550 borrowers. The PPP loans provided low interest rates (1%) and potentially forgivable funds to small businesses and are fully guaranteed by the SBA, warranting no credit loss provision. Using the PPP loans as collateral, CFBank funded nearly all of the PPP loans through loans obtained under the FRB’s Paycheck Protection Program Liquidity Facility (“PPPLF”), which carry a low interest rate of 0.35%. CFBank’s loans outstanding through the PPP totaled

36

CF BANKSHARES INC.

PART 1. Item 2

MANAGEMENT DISCUSSION AND ANALYSIS

$387,000 at March 31, 2022 and $450,000 at December 31, 2021. PPP loans are given a zero risk-weight in regulatory risk-based capital ratios. Also, to the extent the PPP loans are funded through the PPPLF, they are also excluded from average assets for purposes of calculating CFBank’s regulatory leverage ratio. Since the pandemic started, CFBank has granted payment modifications on loans totaling approximately $100 million (or approximately 12% of outstanding loan balances). At March 31, 2022, there were no remaining loans on payment deferrals.

Repositioning of Residential Mortgage Business Model. In early 2021, a shift in the mortgage industry resulted in significantly fewer refinance opportunities and lower margins on residential mortgage loans. In response, the Company has strategically scaled down and repositioned its Residential Mortgage Business and has exited the saleable-to-investors mortgage business in favor of portfolio lending with servicing retained. Our Commercial Banking Business continues to experience strong growth and has become the primary driver of our earnings and performance.

General

Our net income is dependent primarily on net interest income, which is the difference between the interest income earned on loans and securities and our 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, the level of nonperforming assets and deposit flows.

Net income is also affected by, among other things, provisions for loan and lease losses, loan fee income, service charges, gains on loan sales, operating expenses, and taxes. Operating expenses principally consist of employee compensation and benefits, occupancy, advertising and marketing, data processing, professional fees, FDIC insurance premiums and other general and administrative expenses. Our results of operations are significantly affected by general economic and competitive conditions, changes in market interest rates and real estate values, government policies and actions of regulatory authorities. Our regulators have extensive discretion in their supervisory and enforcement activities, including the authority to impose restrictions on our operations, to classify our assets and to require us to increase the level of our allowance for loan and lease losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our business, financial condition, results of operations and/or cash flows.

Management’s discussion and analysis represents a review of our consolidated financial condition and results of operations for the periods presented. This review should be read in conjunction with our consolidated financial statements and related notes.

Financial Condition

General. Assets totaled $1.5 billion at March 31, 2022 and increased $48.6 million, or 3.3%, from $1.5 billion at December 31, 2021. The increase was primarily due to a $67.2 million increase in net loan balances and a $1.7 million increase in cash and cash equivalents, partially offset by a $19.5 million decrease in loans held for sale.

Cash and cash equivalents. Cash and cash equivalents totaled $168.3 million at March 31, 2022, and increased $1.7 million, or 1.0%, from $166.6 million at December 31, 2021. The increase in cash and cash equivalents was primarily attributed to an increase in net deposit balances, security maturities and a decrease in loans held for sale, partially offset by increases in net loan balances.

Securities. Securities available for sale totaled $13.0 million at March 31, 2022, and decreased $3.3 million, or 20.5%, compared to $16.3 million at December 31, 2021. The decrease was due to principal maturities.

Loans held for sale. Loans held for sale totaled $8.5 million at March 31, 2022 and decreased $19.5 million, or 69.7%, from $28.0 million at December 31, 2021. The decrease is the result of the Company’s decision to strategically scale down and reposition its Residential Mortgage Business in response to the shift in the mortgage industry.

Loans and Leases. Net loans and leases totaled $1.3 billion at March 31, 2022, and increased $67.2 million, or 5.5%, from $1.2 billion at December 31, 2021. The increase in net loans during the quarter was primarily due to a $29.7 million increase in single-family residential loan balances, a $26.1 million increase in commercial loan balances, an $11.8 million increase in construction loan balances, and a $2.3 increase in commercial real estate loan balances, partially offset by a $2.7 million decrease in multi-family loan balances. The increases in the aforementioned loan balances were related to increased sales activity and new relationships.

Allowance for loan and lease losses (ALLL). The allowance for loan and lease losses totaled $15.5 million at March 31, 2022, and increased $12,000, or 0.1%, from $15.5 million at December 31, 2021. The increase in the ALLL is due to net recoveries during the three months ended March 31, 2022. The ratio of the ALLL to total loans was 1.20% at March 31, 2022, compared to 1.26% at December 31, 2021.

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CF BANKSHARES INC.

PART 1. Item 2

MANAGEMENT DISCUSSION AND ANALYSIS

The ALLL is a valuation allowance for probable incurred credit losses. The ALLL methodology is designed as part of a thorough process that incorporates management’s current judgments about the credit quality of the loan portfolio into a determination of the ALLL in accordance with generally accepted accounting principles and supervisory guidance. Management analyzes the adequacy of the ALLL quarterly through reviews of the loan portfolio, including the nature and volume of the loan portfolio and segments of the portfolio; industry and loan concentrations; historical loss experience; delinquency statistics and the level of nonperforming loans; specific problem loans; the ability of borrowers to meet loan terms; an evaluation of collateral securing loans and the market for various types of collateral; various collection strategies; current economic conditions, trends and outlook; and other factors that warrant recognition in providing for an adequate ALLL. Based on the variables involved and the significant judgments management must make about outcomes that are uncertain, the determination of the ALLL is considered to be a critical accounting policy. See the section titled “Critical Accounting Policies” for additional discussion.

The ALLL consists of specific and general components. The specific component relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that CFBank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Substandard loans of all classes within the commercial, commercial real estate, construction and multi-family residential loan segments, regardless of size, are individually evaluated for impairment when they are 90 days past due, or earlier than 90 days past due if information regarding the payment capacity of the borrower indicates that payment in full according to the loan terms is doubtful. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate, or at the fair value of collateral, less costs to sell, if repayment is expected solely from the collateral. Large groups of smaller balance loans, such as consumer and single-family residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures. Loans within any class for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (TDRs) and are classified as impaired. See Notes 1 and 4 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the ALLL.

Individually evaluated impaired loans totaled $1.0 million at March 31, 2022, and decreased $2.0 million, or 65.9%, from $3.0 million at December 31, 2021. The decrease was primarily due to the payoff of two impaired loans during the first quarter of 2022. The amount of the ALLL specifically allocated to individually impaired loans totaled $6,000 at March 31, 2022 and $20,000 at December 31, 2021.

The specific reserve on impaired loans is based on management’s estimate of the present value of estimated future cash flows using the loan’s effective rate or the fair value of collateral, if repayment is expected solely from the collateral. On at least a quarterly basis, management reviews each impaired loan to determine whether it should have a specific reserve or partial charge-off. Management relies on appraisals or internal evaluations to help make this determination. Determination of whether to use an updated appraisal or internal evaluation is based on factors including, but not limited to, the age of the loan and the most recent appraisal, condition of the property and whether we expect the collateral to go through the foreclosure or liquidation process. Management considers the need for a downward adjustment to the valuation based on current market conditions and on management’s analysis, judgment and experience. The amount ultimately charged-off for these loans may be different from the specific reserve, as the ultimate liquidation of the collateral and/or projected cash flows may be different from management’s estimates.

Nonperforming loans, which are nonaccrual loans and loans at least 90 days past due but still accruing interest, totaled $1.0 million at March 31, 2022, and increased $9,000 from $997,000 at December 31, 2021. The increase was primarily due to one consumer loan going into nonaccrual status during the first quarter, partially offset by principal payments. The ratio of nonperforming loans to total loans was 0.08% at March 31, 2022 compared to 0.08% at December 31, 2021.

Nonaccrual loans include some loans that were modified and identified as TDRs and are not performing. TDRs included in nonaccrual loans totaled $139,000 at March 31, 2022 and $147,000 at December 31, 2021.

Nonaccrual loans at March 31, 2022 and December 31, 2021 do not include $875,000 and $2.8 million, respectively, in TDRs where customers have established a sustained period of repayment performance, generally six months, loans are current according to their modified terms and repayment of the remaining contractual payments is expected. These loans are included in total impaired loans. See Notes 1 and 4 to the consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding impaired loans and nonperforming loans.

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The general reserve component of our ALLL covers non-impaired loans of all classes and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by loan class and is based on the actual loss history experienced by CFBank over a three-year period. The general component is calculated based on CFBank’s loan balances and actual three-year historical loss rates. For loans with little or no actual loss experience, industry estimates are used based on loan segment. This actual loss experience is supplemented with other economic and judgmental factors based on the risks present for each loan class. These economic and judgmental factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

Management’s loan review process is an integral part of identifying problem loans and determining the ALLL. We maintain an internal credit rating system and loan review procedures specifically developed as the primary credit quality indicator to monitor credit risk for commercial, commercial real estate and multi-family residential real estate loans. We analyze these loans individually and categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. Credit reviews for these loan types are generally performed at least annually, and more often for loans with higher credit risk. Loan officers maintain close contact with borrowers between reviews. Adjustments to loan risk ratings are based on the reviews and at any time information is received that may affect risk ratings. Additionally, an independent third party review of commercial, commercial real estate and multi-family residential loans is performed at least annually. Management uses the results of these reviews to help determine the effectiveness of the existing policies and procedures and to provide an independent assessment of our internal loan risk rating system.

We have incorporated the regulatory asset classifications as a part of our credit monitoring and internal loan risk rating system. In accordance with regulations, problem loans are classified as special mention, substandard, doubtful or loss, and the classifications are subject to review by the regulators. Assets designated as special mention are considered criticized assets. Assets designated as substandard, doubtful or loss are considered classified assets. See Note 4 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the regulatory asset classifications.

The level of total criticized and classified loans decreased by $2.0 million, or 32.7%, during the three months ended March 31, 2022. Loans designated as special mention decreased $61,000, or 2.5%, and totaled $2.4 million at March 31, 2022. Loans classified as substandard decreased $2.0 million, or 54.1%, and totaled $1.6 million at March 31, 2022, compared to $3.6 million at December 31, 2021. Loans designated as doubtful decreased $8,000, or 5.4%, and totaled $139,000 at March 31, 2022, compared to $147,000 at December 31, 2021. See Note 4 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding risk classification of loans.

In addition to credit monitoring through our internal loan risk rating system, we also monitor past due information for all loan segments. Loans that are not rated under our internal credit rating system include groups of homogenous loans, such as single-family residential real estate loans and consumer loans. The primary credit indicator for these groups of homogenous loans is past due information.

Total past due loans decreased $2.6 million and totaled $946,000 at March 31, 2022, compared to $3.6 million at December 31, 2021. Past due loans totaled 0.1% of the loan portfolio at March 31, 2022, compared to 0.3% at December 31, 2021. See Note 4 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding loan delinquencies.

All lending activity involves risk of loss. Certain types of loans, such as option adjustable-rate mortgage (ARM) products, junior lien mortgages, high loan-to-value ratio mortgages, interest only loans, subprime loans and loans with initial teaser rates, can have a greater risk of non-collection than other loans. CFBank has not engaged in subprime lending or used option ARM products.

Loans that contain interest only payments may present a higher risk than those loans with an amortizing payment that includes periodic principal reductions. Interest only loans are primarily commercial lines of credit secured by business assets and inventory, and consumer home equity lines of credit secured by the borrower’s primary residence. Due to the fluctuations in business assets and inventory of our commercial borrowers, CFBank has increased risk due to a potential decline in collateral values without a corresponding decrease in the outstanding principal. Interest only commercial lines of credit totaled $122.6 million, or 33.8%, of CFBank’s commercial portfolio at March 31, 2022, compared to $120.1 million, or 35.6%, at December 31, 2021. Interest only home equity lines of credit totaled $23.1 million, or 94.6%, of the total home equity lines of credit at March 31, 2022 compared to $23.9 million, or 98.7%, at December 31, 2021.

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We believe the ALLL is adequate to absorb probable incurred credit losses in the loan portfolio as of March 31, 2022; however, future additions to the allowance may be necessary based on factors including, but not limited to, deterioration in client business performance, recessionary economic conditions, declines in borrowers’ cash flows and market conditions which result in lower real estate values, including any of the foregoing that may result from the ongoing COVID-19 pandemic and/or the effects of various governmental responses to the pandemic, including stimulus packages and programs. Additionally, various regulatory agencies, as an integral part of their examination process, periodically review the ALLL. Such agencies may require additional provisions for loan losses based on judgments and estimates that differ from those used by management, or on information available at the time of their review. Management continues to diligently monitor credit quality in the existing portfolio and analyze potential loan opportunities carefully in order to manage credit risk. An increase in loan losses could occur if economic conditions and factors which affect credit quality, real estate values and general business conditions worsen or do not improve.

Foreclosed assets. The Company held no foreclosed assets at March 31, 2022 or December 31, 2021. The level of foreclosed assets and charges to foreclosed assets expense may change in the future in connection with workout efforts related to foreclosed assets, nonperforming loans and other loans with credit issues.

Deposits. Deposits totaled $1.3 billion at March 31, 2022, an increase of $52.4 million, or 4.2%, when compared to $1.2 billion at December 31, 2021. The increase when compared to December 31, 2021 is primarily due to a $70.5 million increase in money market account balances and a $13.6 million increase in certificate of deposit account balances, partially offset by a $31.6 million decrease in checking account balances, and a $100,000 decrease in savings account balances. Noninterest-bearing deposit accounts decreased $31.1 million to $253.8 million from $284.9 million at December 31, 2021.

CFBank is a participant in the Certificate of Deposit Account Registry Service® (CDARS) and Insured Cash Sweep (ICS) programs offered through Promontory Interfinancial Network. Promontory works with a network of banks to offer products that can provide FDIC insurance coverage in excess of $250,000 through these innovative products. Brokered deposits, including CDARS and ICS deposits that qualify as brokered, totaled $271.9 million at March 31, 2022, and decreased $6.2 million, or 2.2%, from $278.1 million at December 31, 2021. Customer balances in the CDARS reciprocal and ICS reciprocal programs, which do not qualify as brokered, totaled $134.0 million at March 31, 2022 and increased $75.6 million, or 129.6%, from $58.4 million at December 31, 2021.

FHLB advances and other debt. FHLB advances and other debt totaled $83.2 million at March 31, 2022 and decreased $6.5 million, or 7.2%, compared to $89.7 million at December 31, 2021. The decrease was due to repayments of $6.5 million in FHLB advances.

Prior to May 21, 2021, the Holding Company had a term loan in the original principal amount of $5.0 million with an additional $10.0 million revolving line-of-credit with a third-party bank. That credit facility was refinanced into a new $35.0 million facility on May 21, 2021. The credit facility is revolving until May 21, 2024, at which time any then-outstanding balance is converted to a 10-year term note on a graduated 10-year amortization. Borrowings on the credit facility bear interest at a fixed rate of 3.85% until May 21, 2026, and the interest rate then converts to a floating rate equal to PRIME with a floor of 3.25%. The purpose of the credit facility is to provide an additional source of liquidity for the Holding Company and to provide funds for the Holding Company to downstream as additional capital to CFBank to support growth. As of March 31, 2022, the Company had an outstanding balance of $24.3 million on the facility.

At March 31, 2022, CFBank had availability in unused lines of credit at two commercial banks in the amounts of $50.0 million and $15.0 million. There were no outstanding borrowings on either line at March 31, 2022 or December 31, 2021.

CFBank has participated in the PPPLF, which provides liquidity through term financing backed by PPP loans. At March 31, 2022 and December 31, 2021, the principal balance of PPPLF advances outstanding was $450,000. Principal payments are due on the PPPLF advances when the related PPP loans are repaid or forgiven by the SBA. See the section titled “Liquidity and Capital Resources” for additional information regarding FHLB advances and other debt.

Subordinated debentures. Subordinated debentures totaled $14.9 million at March 31, 2022 and $14.9 million at December 31, 2021. In December 2018, the Holding Company entered into subordinated note purchase agreements with certain qualified institutional buyers and completed a private placement of $10.0 million of fixed-to-floating rate subordinated notes, resulting in net proceeds of $9,612,000 after deducting unamortized debt issuance costs of approximately $388,000. In 2003, the Holding Company issued subordinated debentures in exchange for the proceeds of a $5.0 million trust preferred securities offering issued by a trust formed by the Holding Company. The terms of the subordinated debentures allow for the Holding Company to defer interest payments for a period not to exceed five years. Interest payments on the subordinated debentures were current at March 31, 2022 and December 31, 2021.

Stockholders’ equity. Stockholders’ equity totaled $128.3 million at March 31, 2022, an increase of $3.0 million, or 2.4%, from $125.3 million at December 31, 2021. The increase in total stockholders’ equity was primarily attributed to net income, partially

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MANAGEMENT DISCUSSION AND ANALYSIS

offset by a $1.0 million other comprehensive loss and share repurchases of $331,000. The other comprehensive loss was the result of the mark-to-market adjustment of our investment portfolio.

Management continues to proactively monitor capital levels and ratios in its on-going capital planning process. CFBank has leveraged its capital to support balance sheet growth and drive increased net interest income. Management remains focused on growing capital though improving results from operations; however, should the need arise, CFBank has additional sources of capital and alternatives it could utilize as further discussed in the “Liquidity and Capital Resources” section in this Quarterly Report on Form 10-Q.

Currently, the Holding Company has excess cash or sources of liquidity to cover its expenses for the foreseeable future, and could inject capital into CFBank if necessary. Also, CFBank has the flexibility to manage its balance sheet size as a result of the short duration of the loans held for sale, as well as to deploy those assets into higher earning assets to improve net interest income as the opportunity presents itself.

Comparison of the Results of Operations for the Three Months Ended March 31, 2022 and 2021.

General. Net income for the three months ended March 31, 2022 totaled $4.5 million (or $0.69 per diluted common share) and decreased $1.9 million, or 29.6%, compared to net income of $6.4 million (or $0.96 per diluted common share) for the three months ended March 31, 2021. The decrease in net income was primarily the result of decreased margins and volumes on Direct to Consumer (DTC) residential mortgage loans, partially offset by an increase in net interest income and a decrease in other noninterest expense.

Net interest income. Net interest income is a significant component of net income, and consists of the difference between interest income generated on interest-earning assets and interest expense incurred on interest-bearing liabilities. Net interest income is primarily affected by the volumes, interest rates and composition of interest-earning assets and interest-bearing liabilities. The tables in the sections below titled “Average Balances, Interest Rates and Yields” and “Rate/Volume Analysis of Net Interest Income” provide important information on factors impacting net interest income and should be read in conjunction with this discussion of net interest income.

Net interest income totaled $10.8 million for the quarter ended March 31, 2022 and increased $1.2 million, or 12.0%, compared to net interest income of $9.6 million for the quarter ended March 31, 2021. The increase in net interest income was primarily due to an $862,000, or 26.6%, decrease in interest expense and a $295,000, or 2.3%, increase in interest income. The decrease in interest expense was attributed to a 20bps decrease in the average cost of funds on interest-bearing liabilities, coupled with a $113.8 million, or 9.7%, decrease in average interest-bearing liabilities. The increase in interest income was primarily attributed to a 22bps increase in average yield on interest-earning assets, partially offset by a $48.9 million, or 3.4%, decrease in average interest-earning assets outstanding. The net interest margin of 3.13% for the quarter ended March 31, 2022 increased 44bps compared to the net interest margin of 2.69% for the quarter ended March 31, 2021.

Interest income totaled $13.2 million for the quarter ended March 31, 2022, and increased $295,000, or 2.3%, compared to $12.9 million for the quarter ended March 31, 2021. The increase in interest income was primarily attributed to a $324.8 million, or 35.5%, increase in average loans and leases outstanding and a 70bps increase in the average yield on loans held for sale, partially offset by a $362.9 million decrease in average loans held for sale.

Interest expense totaled $2.4 million for the quarter ended March 31, 2022, and decreased $862,000, or 26.6%, compared to $3.2 million for the quarter ended March 31, 2021. The decrease in interest expense was primarily attributed to a 31bps decrease in the average rate of interest-bearing deposits, partially offset by a $34.8 million, or 3.5%, increase in average interest-bearing deposits.

Provision for loan and lease losses. There was no provision for loan and lease losses expense for the quarter ended March 31, 2022 or for the quarter ended March 31, 2021,which is due to continued strong credit quality. Net recoveries for the quarter ended March 31, 2022 totaled $12,000, compared to net recoveries of $64,000 for the quarter ended March 31, 2021.

The following table presents information regarding net charge-offs (recoveries) for the three months ended March 31, 2022 and 2021.

	For the three months ended March 31,
	2022		2021
(unaudited)		(Dollars in thousands)
Commercial	$	-	$	(56)
Single-family residential real estate		(8)		(3)
Home equity lines of credit		(4)		(5)
Total	$	(12)	$	(64)

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Noninterest income. Noninterest income for the quarter ended March 31, 2022 totaled $1.0 million and decreased $6.2 million, or 85.5%, compared to $7.2 million for the quarter ended March 31, 2021. The decrease was primarily due to a $5.8 million decrease in net gain on sale of residential mortgage loans. The decrease in the net gain on sale of residential mortgage loans was the result of the Company’s decision to strategically scale down its residential mortgage lending business in response to the shift in the mortgage industry.

Noninterest expense. Noninterest expense for the quarter ended March 31, 2022 totaled $6.3 million and decreased $2.7 million, or 30.0%, compared to $9.0 million for the quarter ended March 31, 2021. The decrease in noninterest expense was primarily due to a $1.2 million decrease in advertising and marketing expense, a $988,000 decrease in salaries and employee benefits, and a $608,000 decrease in professional fee expense. The decreases in advertising and marketing expense, salaries and employee benefits expense, and professional fee expense were primarily the result of the scaling down and repositioning of our residential mortgage lending business as previously discussed.

Income tax expense. Income tax expense was $1.0 million for the quarter ended March 31, 2022, a decrease of $432,000 compared to $1.5 million for the quarter ended March 31, 2021. The effective tax rate for the quarter ended March 31, 2022 was approximately 18.5%, as compared to approximately 18.5% for the quarter ended March 31, 2021.

Our deferred tax assets are composed of NOLs, and other temporary book to tax differences. When determining the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded as a benefit, the Company conducts a regular assessment of all available information. This information includes, but is not limited to, taxable income in prior periods, projected future income and projected future reversals of deferred tax items. Based on these criteria, the Company determined as of March 31, 2022 that no valuation allowance was required against the net deferred tax asset.

The Company records income tax expense based on the federal statutory rate adjusted for the effect of other items such as low income housing credits, bank owned life insurance and other miscellaneous items.

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Average Balances, Interest Rates and Yields. The following tables present, for the periods indicated, the total dollar amount of fully taxable equivalent interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed in both dollars and rates. Average balances are computed using month-end balances.

	For Three Months Ended March 31,
	2022						2021
	Average		Interest		Average		Average		Interest		Average
	Outstanding		Earned/		Yield/		Outstanding		Earned/		Yield/
	Balance		Paid		Rate		Balance		Paid		Rate
	(Dollars in thousands)
Interest-earning assets:
Securities (1) (2)	$	20,309	$	224		4.36%	$	14,854	$	133		3.61%
Loans held for sale		22,925		172		3.00%		385,811		2,220		2.30%
Loans and leases (3)		1,239,126		12,656		4.09%		914,296		10,421		4.56%
Other earning assets		89,004		38		0.17%		106,657		28		0.11%
FHLB and FRB stock		7,319		62		3.39%		5,974		55		3.68%
Total interest-earning assets		1,378,683		13,152		3.82%		1,427,592		12,857		3.60%
Noninterest-earning assets		77,320						79,770
Total assets	$	1,456,003					$	1,507,362
Interest-bearing liabilities:
Deposits	$	956,568		1,684		0.70%	$	991,325		2,497		1.01%
FHLB advances and other borrowings		102,860		694		2.70%		181,869		743		1.63%
Total interest-bearing liabilities		1,059,428		2,378		0.90%		1,173,194		3,240		1.10%
Noninterest-bearing liabilities		270,376						221,190
Total liabilities		1,329,804						1,394,384
Equity		126,199						112,978
Total liabilities and equity	$	1,456,003					$	1,507,362
Net interest-earning assets	$	319,255					$	254,398
Net interest income/interest rate spread			$	10,774		2.92%			$	9,617		2.50%
Net interest margin						3.13%						2.69%
Average interest-earning assets
to average interest-bearing liabilities		130.13%						121.68%

⁽¹⁾Average balance is computed using the carrying value of securities. Average yield is computed using the historical amortized cost average balance for available for sale securities.

⁽²⁾Average yields and interest earned are stated on a fully taxable equivalent basis.

⁽³⁾Average balance is computed using the recorded investment in loans net of the ALLL and includes nonperforming loans.

‎

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Rate/Volume Analysis of Net Interest Income. The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the increase and decrease related to changes in balances and/or changes in interest rates. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume (i.e., changes in volume multiplied by the prior rate) and (ii) changes in rate (i.e., changes in rate multiplied by prior volume). For purposes of this table, changes attributable to both rate and volume which cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate.

	Three Months Ended
	March 31, 2022
	Compared to Three Months Ended
	March 31, 2021
	Increase (decrease)
	due to
	Rate		Volume		Net
	(Dollars in thousands)
Interest-earning assets:
Securities (1)	$	33	$	58	$	91
Loans held for sale		3,579		(5,627)		(2,048)
Loans and leases		(6,196)		8,431		2,235
Other earning assets		38		(28)		10
FHLB and FRB Stock		(25)		32		7
Total interest-earning assets		(2,571)		2,866		295
Interest-bearing liabilities:
Deposits		(728)		(85)		(813)
FHLB advances and other borrowings		1,520		(1,569)		(49)
Total interest-bearing liabilities		792		(1,654)		(862)
Net change in net interest income	$	(3,363)	$	4,520	$	1,157

⁽¹⁾ Securities amounts are presented on a fully taxable equivalent basis.

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 2021 Audited Financial Statements. Some of these accounting policies are considered to be critical accounting policies, which are those policies that are both most important to the portrayal of the Company’s financial condition and results of operations, and 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 condition or results of operations. These policies, current assumptions and estimates utilized, and the related disclosure of this process, are determined by management and routinely reviewed with the Audit Committee of the Board of Directors. We believe that the judgments, estimates and assumptions used in the preparation of the consolidated financial statements were appropriate given the factual circumstances at the time.

We have identified accounting policies that are critical accounting policies, and an understanding of these policies is necessary to understand our financial statements. The following discussion details the critical accounting policies and the nature of the estimates made by management.

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Determination of the ALLL. The ALLL represents management’s estimate of probable incurred credit losses in the loan portfolio at each balance sheet date. The allowance consists of general and specific components. The general component covers loans not classified as impaired and is based on historical loss experience, adjusted for current factors. Current factors considered include, but are not limited to, management’s oversight of the portfolio, including lending policies and procedures; nature, level and trend of the portfolio, including past due and nonperforming loans, loan concentrations, loan terms and other characteristics; current economic conditions and outlook; collateral values; and other items. The specific component of the ALLL relates to loans that are individually classified as impaired. Loans exceeding policy thresholds are regularly reviewed to identify impairment. A loan is impaired when, based on current information and events, it is probable that CFBank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. Determining whether a loan is impaired and whether there is an impairment loss requires judgment and estimates, and the eventual outcomes may differ from estimates made by management. The determination of whether a loan is impaired includes: review of historical data; judgments regarding the ability of the borrower to meet the terms of the loan; an evaluation of the collateral securing the loan and estimation of its value, net of selling expenses, if applicable; various collection strategies; and other factors relevant to the loan or loans. Impairment is measured based on the fair value of collateral, less costs to sell, if the loan is collateral dependent, or alternatively, the present value of expected future cash flows discounted at the loan’s effective rate, if the loan is not collateral dependent. When the selected measure is less than the recorded investment in the loan, an impairment loss is recorded. As a result, determining the appropriate level for the ALLL involves not only evaluating the current financial situation of individual borrowers or groups of borrowers, but also current predictions about future events that could change before an actual loss is determined. Based on the variables involved and the fact that management must make judgments about outcomes that are inherently uncertain, the determination of the ALLL is considered to be a critical accounting policy. Additional information regarding this policy is included in the previous section titled “Financial Condition - Allowance for loan losses”, in Note 4 to the consolidated financial statements included in this Quarterly Report on Form 10-Q and in Notes 1, 4 and 6 to our 2021 Audited Financial Statements.

Fair value of financial instruments. Another critical accounting policy relates to fair value of financial instruments, which are estimated using relevant market information and other assumptions. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Additional information is included in Note 6 to the consolidated financial statements included in this Quarterly Report on Form 10-Q and in Notes 1 and 6 to our 2021 Audited Financial Statements.

Mortgage banking derivatives. Another critical accounting policy relates to the fair value of mortgage banking derivatives. Mortgage banking derivatives include two types of commitments: rate lock commitments and forward loan commitments. The fair values of these mortgage derivatives are based on anticipated gains on the underlying loans and are based on valuation models using observable market data as of the measurement date. Changes in the fair value of the derivatives are reported currently in earnings, as other noninterest income. Changes in assumptions or in market conditions could significantly affect the estimates. Additional information is included in Notes 1, 6 and 11 to the consolidated financial statements included in this Quarterly Report on Form 10-Q and in Notes 1, 6 and 18 to our 2021 Audited Financial Statements.

Liquidity and Capital Resources

In general terms, liquidity is a measurement of an enterprise’s ability to meet cash needs. The primary objective in liquidity management is to maintain the ability to meet loan commitments and 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, the requirements of our own deposit and loan customers and regulatory considerations. Management believes that each of the Holding Company’s and CFBank’s current liquidity is sufficient to meet its daily operating needs and fulfill its strategic planning.

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 our ongoing assessment of expected loan demand, expected 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 and borrowings from the FRB and our commercial bank lines of credit.

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CF BANKSHARES INC.

PART 1. Item 2

MANAGEMENT DISCUSSION AND ANALYSIS

The following table summarizes CFBank’s cash available from liquid assets and borrowing capacity at March 31, 2022 and December 31, 2021.

	March 31, 2022		December 31, 2021
	(Dollars in thousands)
Cash, unpledged securities and deposits in other financial institutions	$	169,881	$	168,953
Additional borrowing capacity at the FHLB		128,043		113,077
Additional borrowing capacity at the FRB		89,355		72,195
Unused commercial bank lines of credit		65,000		65,000
Total	$	452,279	$	419,225

Cash, unpledged securities and deposits in other financial institutions increased $928,000, or 0.55%, to $169.9 million at March 31, 2022, compared to $169.0 million at December 31, 2021. The increase is primarily attributed to an increase in deposits and a decrease in loans held for sale, partially offset by an increase in loans and leases.

CFBank’s additional borrowing capacity with the FHLB increased $14.9 million, or 13.2%, to $128.0 million at March 31, 2022, compared to $113.1 million at December 31, 2021. The increase is primarily attributed to an increase in pledged collateral.

CFBank’s additional borrowing capacity at the FRB increased $17.2 million, or 23.8%, to $89.4 million at March 31, 2022 from $72.2 million at December 31, 2021. CFBank is eligible to participate in the FRB’s primary credit program, providing CFBank access to short-term funds at any time, for any reason, based on the collateral pledged.

CFBank’s borrowing capacity with both the FHLB and FRB may be negatively impacted by changes such as, but not limited to, further tightening of credit policies by the FHLB or FRB, deterioration in the credit performance of CFBank’s loan portfolio or CFBank’s financial performance, or a decrease in the balance of pledged collateral.

CFBank had $65.0 million of availability in unused lines of credit with two commercial banks at March 31, 2022 and at December 31, 2021.

Deposits are obtained predominantly from the markets in which CFBank’s offices are located. We rely primarily on a willingness to pay market-competitive interest rates to attract and retain retail deposits. Accordingly, rates offered by competing financial institutions may affect our ability to attract and retain deposits.

CFBank relies on competitive interest rates, customer service, and relationships with customers to retain deposits. In 2010, the FDIC, pursuant to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, permanently increased deposit insurance coverage from $100,000 to $250,000 per depositor.

The Holding Company has more limited sources of liquidity than CFBank. In general, in addition to its existing liquid assets, sources of liquidity include funds raised in the securities markets through debt or equity offerings, funds borrowed from third party banks or other lenders, dividends received from CFBank or the sale of assets.

Management believes that the Holding Company had adequate funds and sources of liquidity at March 31, 2022 to meet its current and anticipated operating needs at this time. The Holding Company’s current cash requirements include operating expenses and interest on subordinated debentures and other debt. The Company may also pay dividends on its common stock if and when declared by the Board of Directors.

Currently, annual debt service on the subordinated debentures underlying the Company’s trust preferred securities is approximately $190,000. The subordinated debentures have a variable rate of interest, reset quarterly, equal to the three-month LIBOR plus 2.85%. The total rate in effect was 3.85% at March 31, 2022.

Currently, the annual debt service on the Company’s $10 million of fixed-to-floating rate subordinated notes is $700,000. The subordinated notes have a fixed rate of 7.00% until December 2023, at which time the interest rate will reset quarterly to a rate equal to the then current three-month LIBOR plus 4.14%.

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CF BANKSHARES INC.

PART 1. Item 2

MANAGEMENT DISCUSSION AND ANALYSIS

Prior to May 21, 2021, the Holding Company had a term loan in the original principal amount of $5.0 million with an additional $10.0 million revolving line-of-credit with a third-party bank. That credit facility was refinanced into a new $35.0 million facility on May 21, 2021. The credit facility is revolving until May 21, 2024 at which time any then-outstanding balance will be converted to a 10-year term note on a graduated 10-year amortization. Borrowings on the credit facility bear interest at a fixed rate of 3.85% until May 21, 2026, and the interest rate then converts to a floating rate equal to PRIME with a floor of 3.75%. The purpose of the credit facility is to provide an additional source of liquidity for the Holding Company and to provide funds for the Holding Company to downstream as additional capital to CFBank to support growth. At March 31,2022, the Company had an outstanding balance, net of unamortized debt issuance costs, of $24.3 million on the facility.

The ability of the Holding Company to pay dividends on its common stock is dependent upon the amount of cash and liquidity available at the Holding Company level, as well as the receipt of dividends and other distributions from CFBank to the extent necessary to fund such dividends.

The Holding Company is a legal entity that is separate and distinct from CFBank, which has no obligation to make any dividends or other funds available for the payment of dividends by the Holding Company. Banking regulations limit the amount of dividends that can be paid to the Holding Company by CFBank without prior regulatory approval. Generally, financial institutions may pay dividends without prior approval as long as the dividend does not exceed the total of the current calendar year-to-date earnings plus any earnings from the previous two years not already paid out in dividends, and as long as the financial institution remains well capitalized after the dividend payment.

The Holding Company also is subject to various legal and regulatory policies and requirements impacting the Holding Company’s ability to pay dividends on its stock. In addition, the Holding Company’s ability to pay dividends on its stock is conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities. Finally, under the terms of the Company’s fixed-to-floating rate subordinated debt, the Holding Company’s ability to pay dividends on its stock is conditioned upon the Holding Company continuing to make required principal and interest payments, and not incurring an event of default, with respect to the subordinated debt.

Federal income tax laws provided deductions, totaling $2.3 million, for thrift bad debt reserves established before 1988. Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would have totaled $473,000 at year-end 2021. However, if CFBank were wholly or partially liquidated or otherwise ceases to be a bank, or if tax laws were to change, this amount would have to be recaptured and a tax liability recorded. Additionally, any distributions in excess of CFBank’s current or accumulated earnings and profits would reduce amounts allocated to its bad debt reserve and create a tax liability for CFBank.

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CF BANKSHARES INC.

PART 1. Item 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Management believes that, as of March 31, 2022, there has been no material change in the Company’s market risk from the information contained in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2021.

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CF BANKSHARES INC.

PART 1. Item 4

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 Securities Exchange Act of 1934 (Exchange Act) reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of and for the quarter ended March 31, 2022.

Changes in internal control over financial reporting. We made no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) in the first quarter of 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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CF BANKSHARES INC.

PART II. Item 1 to 6

OTHER INFORMATION

Item 1. Legal Proceedings

The Holding Company and CFBank may, from time to time, be involved in various legal proceedings in the normal course of business. Periodically, there have been various claims and lawsuits involving CFBank, such as claims to enforce liens, condemnation proceedings on properties in which CFBank holds security interests, claims involving the making and servicing of real property loans and other claims and lawsuits incident to our banking business.

We are not a party to any pending legal proceeding that management believes would have a material adverse effect on our financial condition or results of operations, if decided adversely to us.

Item 1A. Risk Factors

The following information updates and supplements our risk factors and should be read in conjunction with the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

We are subject to interest rate risk, which recently has increased due to domestic and global economic instability and geopolitical developments.

Management is unable to accurately predict future market interest rates, which are affected by many factors, including, but not limited to inflation, recession, changes in employment levels, changes in the money supply and domestic and international disorder and instability in domestic and foreign financial markets. Changes in the interest rate environment may reduce our profits. Net interest income is a significant component of our net income, and consists of the difference, or spread, between interest income generated on interest-earning assets and interest expense incurred on interest-bearing liabilities. Net interest spreads are affected by the difference between the maturities and repricing characteristics of interest-earning assets and interest-bearing liabilities. Although certain interest-earning assets and interest-bearing liabilities may have similar maturities or periods to which they reprice, they may react in different degrees to changes in market interest rates. In addition, residential mortgage loan origination and refinancing volumes are affected by market interest rates on loans. Rising interest rates generally are associated with a lower volume of loan originations and refinancings, while falling interest rates are usually associated with higher loan originations and refinancings. Our ability to generate gains on sales of mortgage loans is significantly dependent on the level of originations. Cash flows are affected by changes in market interest rates. Generally, in rising interest rate environments, loan prepayment rates are likely to decline, and in falling interest rate environments, loan prepayment rates are likely to increase. A majority of our commercial, commercial real estate and multi-family residential real estate loans are adjustable rate loans and an increase in the general level of interest rates may adversely affect the ability of some borrowers to pay the interest on and principal of their obligations, especially borrowers with loans that have adjustable rates of interest. Changes in interest rates, prepayment speeds and other factors may also cause the value of our loans held for sale to change.

On March 16, 2022, the FOMC of the Federal Reserve raised the target range for the federal funds rate to 0.25% to 0.50%, which represented the first increase to the target federal funds rate since 2018. On May 4, 2022, the FOMC raised the target range for the federal funds rate by an additional 0.50% (to 0.75% to 1.00%). The FOMC, with particular attention being given to ongoing supply chain disruptions, rising energy and commodity prices and the global economic impact of the Russia-Ukraine conflict, has signaled that additional increases may be appropriate if inflation pressures remain elevated or intensify.

These increases, as well as any further increases, to prevailing interest rates could influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but could also affect our ability to originate loans and obtain deposits, the fair value of our financial assets and liabilities, and/or the average duration of our mortgage portfolio and other interest-earning assets. In addition, aggressive increases to the target range for the federal funds rate, combined with ongoing geopolitical instability, could raise the risk of an economic recession. Any such downturn, especially domestically and in the markets in which we operate, may adversely affect our asset quality, deposit levels, loan demand and results of operations.

Macroeconomic and geopolitical challenges and uncertainties affecting the stability of regions and countries around the globe, including Russia and Ukraine, could negatively impact our business, financial condition and results of operations.

We may experience negative impacts to our business and results of operations as a result of macroeconomic and geopolitical challenges, uncertainties and volatility occurring across the globe. For example, the ongoing conflict in Ukraine has created instability in that region and has escalated tensions between Russia and the United States and across Europe. In response to the actions taken by Russia, the United States has imposed, and is likely to continue to impose, significant financial and economic sanctions and export controls against certain Russian organizations and individuals, with similar actions being either implemented or planned by the European Union and the United Kingdom and other jurisdictions. The actions taken by Russia in Ukraine, and any further measures that may be taken by the United States or its allies in response to such actions, could have negative impacts on global and regional financial markets and economic conditions. The United States has banned Russian imports of oil, natural gas and coal and other jurisdictions have taken, or are contemplating taking, similar actions. These actions and dynamics are placing additional upward pressure on fuel and energy prices, which already were rising based on factors including a return to pre-pandemic levels of consumption and insufficient global production to match increasing demand. These developments are combining to amplify existing economic uncertainty and cause adjustments to longer-term inflation expectations which, in turn, may cause upward pressure on interest rates and adversely affect economic conditions.

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CF BANKSHARES INC.

PART II. Item 1 to 6

OTHER INFORMATION

The Russia-Ukraine conflict may impact our risk exposure in other areas, most notably our cybersecurity risk. On March 21, 2022, the Biden Administration issued a warning regarding the potential for Russia to engage in malicious cyber activities, specifically including attacks on critical infrastructure such as the financial sector, in response to the international economic sanctions that have been imposed against the Russian government and organizations and individuals within Russia. Institutions that provide critical services, including all members of the financial sector such as CFBank, have been encouraged by the Administration and their supervisors to enhance cyber-defense systems and take steps to further secure their data in anticipation of potential malicious cyber activity by the Russian government or other Russian actors.

The developments described above could adversely affect our businesses, financial condition and results of operations.

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

(a)None.

(b)Not applicable.

(c)The following table provides information concerning purchases of the Holding Company’s shares of common stock made by or on behalf of the Company or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended, during the three months ended March 31, 2022.

Period	Total number of common shares purchased	Average price paid per common share		Total number of common shares purchased as part of publicly announced plans or programs (1)	Maximum number of common shares that may yet be purchased under the plans or programs (1)
January 1, 2022 through January 31, 2022	10,438		20.69	10,438	196,011
February 1, 2022 through February 28, 2022 (2)	3,537		21.70	1,357	194,654
March 1, 2022 through March 31, 2022	3,980		21.78	3,980	190,674
Total	17,955	$	21.13	15,775

⁽¹⁾On January 28, 2021, the Board of Directors of the Company authorized a new stock repurchase program pursuant to which the Company may repurchase up to 250,000 of the Company’s outstanding common stock on or before February 27, 2022. On October 5, 2021, the Company announced that its Board of Directors approved an increase in the maximum number of shares that the Company may repurchase under the program to 350,000 and further extended the stock repurchase program through June 30, 2022. Under the stock repurchase program, the Company may purchase shares of its common stock from time to time through various means, including open market transactions and privately negotiated transactions.

⁽²⁾Includes 2,180 shares of common stock surrendered to the Company for the payment of taxes upon the vesting of restricted stock.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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CF BANKSHARES INC.

PART II. Item 1 to 6

OTHER INFORMATION

Item 6. Exhibits

Exhibit Number	Description of Exhibit
3.1	Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, filed with the Commission on November 9, 2017 (File No. 0-25045))
3.2	Amendment to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.2 to the registrant’s Registration Statement on Form S-2, filed with the Commission on October 28, 2005 (File No. 333-129315))
3.3	Amendment to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.4 to the registrant’s Form 10-Q for the quarter ended June 30, 2009, filed with the Commission on August 14, 2009 (File No. 0-25045))
3.4	Amendment to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.5 to the registrant’s Form 10-Q for the quarter ended September 30, 2011, filed with the Commission on November 10, 2011 (File No. 0-25045))
3.5	Amendment to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.5 to the registrant’s Post-Effective Amendment to the Registration Statement on Form S-1, filed with the Commission on May 4, 2012 (File No. 333-177434))
3.6	Certificate of Designations to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K dated May 7, 2014 and filed with the Commission on May 13, 2014 (File No. 0-25045))
3.7	Amendment to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K dated August 20, 2018, filed with the commission on August 20, 2018 (File No. 0-25045)
3.8	Certificate of Designations to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K dated October 25, 2019, filed with the Commission on October 31, 2019 (File No. 0-25045))
3.9	Certificate of Amendment to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K dated May 29, 2020, filed with the Commission on June 2, 2020 (File No. 0-25045))
3.10	Amendment to Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K dated July 28, 2020, filed with the commission on July 20, 2020 (File No. 0-25045)
3.11	Certificate of Incorporation, as amended, of the registrant (incorporated by reference to Exhibit 3.10 to the registrant’s Form 10-Q for the quarter ended June 30, 2020, filed with the Commission on August 12, 2020 (File No. 0-25045)) [This document represents the Certificate of Incorporation of the registrant in compiled form incorporating all amendments. This compiled document has not been filed with the Delaware Secretary of State.]
3.12	Second Amended and Restated Bylaws of the registrant (incorporated by reference to Exhibit 3.3 to the registrant’s Form 10-K for the fiscal year ended December 31, 2007, filed with the Commission on March 27, 2008 (File No. 0-25045))
10.1	Deferred Cash Inventive Agreement by and between CFBank National Association and Kevin Beerman
10.2	Deferred Cash Inventive Agreement by and between CFBank National Association and Brad Ringwald
31.1	Rule 13a-14(a) Certifications of the Chief Executive Officer
31.2	Rule 13a-14(a) Certifications of the Principal Financial Officer
32.1	Section 1350 Certifications
101.1	Interactive Data File (Inline XBRL)
104	Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101

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CF BANKSHARES INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CF BANKSHARES INC.
Dated: May 10, 2022	By:	/s/ Timothy T. O’Dell
		Timothy T. O’Dell
		President and Chief Executive Officer
Dated: May 10, 2022	By:	/s/ Kevin J. Beerman
		Kevin J. Beerman
		Executive Vice President and Chief Financial Officer

53

EX-10.1

Exhibit 10.1

CFBANK, NATIONAL ASSOCIATION

DEFERRED CASH INCENTIVE AGREEMENT

THIS DEFERRED CASH INCENTIVE AGREEMENT (this “Agreement”) is made by and between CFBank, National Association, Worthington, Ohio, an Ohio banking association (the “Bank”), or any other successor, transferee, or assignees, and Kevin Beerman (the “Participant”).

INTRODUCTION

WHEREAS, the Bank desires to promote its growth and prosperity through the leadership and management of the Participant, and to provide deferred compensation as an incentive and reward for the Participant’s contribution to the success of the Bank.

AGREEMENT

The Participant and the Bank agree as follows:

ARTICLE 1
Definitions

1.1Definitions. Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

1.1.1.“Addendum A” means the form attached to this Agreement, as updated by the Plan Administrator on an annual basis.  If there is a conflict in any terms or provisions between the Addendum A and this Agreement, the terms and provisions of this Agreement shall prevail.

1.1.2.“Annual Deferred Amount” means the annual deferred cash incentive compensation amount, if any, that will be credited to the Participant’s Deferral Account based upon the following criteria, as more specifically set forth on Addendum A: (i) the percentage of the Participant’s annual bonus (if any) to be deferred (such amount determined by the Bank); and (ii) the Participant achieving certain performance objectives.  The Board may change the criteria set forth on Addendum A on an annual basis, including to reduce the percentage deferred into the Deferral Account to zero; provided, however, that such criteria must be communicated to the Participant in writing by delivering a revised Addendum A to the Participant on or before March 31st of the current Plan Year.  Otherwise, the Addendum A for the prior Plan Year will remain in effect.

1.1.3.“Beneficiary” means each person designated pursuant to Article 5, or the estate of the deceased Participant, entitled to benefits, if any, upon the death of the Participant.

1.1.4.“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator, attached to this Agreement as Exhibit A, that the

1

Participant completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.

1.1.5.“Cause” has the meaning set forth in Article 6.

1.1.6.“Change in Control” means and includes a change in ownership or effective control of the Bank or Holding Company or in the ownership of a substantial portion of the assets of the Bank or Holding Company, within the meaning of Internal Revenue Code Section 409A and as described in Treasury Regulations §§1.409A-3(i)(5).

1.1.7.“Change in Control Benefit” means the benefit described in Section 3.5.

1.1.8.“Code” means the Internal Revenue Code of 1986, as amended.

1.1.9.“Compensation” means the Participant’s base salary, excluding bonuses.

1.1.10.“Deferral Account” means the bookkeeping account established by the Bank pursuant to Article 2 of this Agreement.

1.1.11.“Death Benefit” means the benefit described in Article 4.

1.1.12.“Disability”means that the Participant is determined to be totally disabled by the Social Security Administration.

1.1.13.“Disability Benefit” means the benefit described in Section 3.4.

1.1.14. “Early Termination Age” means age sixty-two (62).

1.1.15.  “Effective Date” means January 1, 2021.

1.1.16.“Final Distribution Age” means the month, day, and year that the Participant attains age sixty-seven (67).

1.1.17. “Holding Company” means CF Bankshares Inc., an Ohio corporation and registered bank holding company.

1.1.18.“Interest” means the amount described in Section 2.1.2.

1.1.19.  “Normal Annual Distribution Benefit” means the benefit described in Section 3.1.

1.1.20.“Normal Annual Distribution Date” means the month, day, and year which is four (4) years after the date each Annual Deferred Amount is contributed to the Deferral Account, or the date the Participant attains Final Distribution Age, whichever occurs earlier.

1.1.21.“Plan Administrator” means the plan administrator described in Article 9.

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1.1.22.“Plan Year” means each twelve (12) month period commencing on January 1st and ending on December 31st.  Notwithstanding the preceding, the initial Plan Year shall begin on the Effective Date and shall end December 31, 2021.

1.1.23.“Quality Control Measure” means the annual performance measure(s) set forth for each Participant on Addendum A to this Agreement.

1.1.24.“Termination of Employment” shall mean a termination of the Participant’s employment, whether voluntary or involuntary, for any reason whatsoever, determined as follows:

(a)Generally. An Participant terminates employment when the facts and circumstances indicate that the Bank and the Participant reasonably anticipate that the Participant will perform no further services for the Bank or an affiliate of the Bank, or that the level of bona fide services the Participant will perform for the Bank and affiliates of the Bank will permanently decrease to no more than 20% of the average level of bona fide services the Participant performed over the immediately preceding 36-month period (or the full period of service if the Participant has been providing services to the Bank and affiliates of the Bank for less than thirty six (36) months) (the “36-month average”).

(b)Rebuttable Presumptions. Barring contrary facts and circumstances, the Bank shall presume (i) that a decrease in bona fide services to 20% or less of the 36‑month average constitutes a termination of employment, and (ii) that continued bona fide services at 50% or more of the 36-month average does not constitute a termination of employment.

(c)Employee v. Contractor. For purposes of the foregoing, services include those performed as an employee or as an independent contractor.

(d)Leave of Absence. If a Participant takes a bona fide paid leave of absence (as defined in Treasury Regulation § 1.409A-1(h)(1)) and has not otherwise terminated employment, the Bank shall treat the Participant as providing bona fide services at a level equal to the level of services that the Participant would have been required to perform to receive the compensation paid with respect to such leave of absence.  Periods during which a Participant takes a bona fide unpaid leave of absence (as defined in Treasury Regulation § 1.409A-1(h)(1)) and has not otherwise terminated employment will be disregarded for purposes of determining whether a Termination of Employment has occurred (including for purposes of determining the applicable 36-month average).

ARTICLE 2
Deferral Account and Deferral of Compensation

2.1Establishing and Crediting. The Bank shall establish a Deferral Account on its books for

4

the Participant, and shall credit to the Deferral Account the following amounts:

2.1.1.Contribution of Deferred Incentive Compensation. At the end of each Plan Year, the Bank will determine the Annual Deferred Amount, if any, with respect to the Participant.  The Bank, at its sole discretion, may add additional amounts to the Deferral Account.  The Bank shall contribute the Annual Deferred Amount to the Deferral Account on the last day of the Plan Year.

2.1.2.Interest. The Bank shall calculate Interest on the Deferral Account balance at the rate set forth on Addendum A, which rate may be changed from time to time by the Bank in its sole discretion.  Interest will be compounded annually.  The Bank shall credit the Interest on the last day of the Plan Year.  Notwithstanding the preceding, for the Plan Year in which the Participant attains the Final Distribution Age (the “Final Plan Year”), the Deferral Account will be credited with a pro-rata amount of Interest based upon the number of completed months during the Final Plan Year, including the month in which the Final Distribution Age is attained.

2.1.3.Quality Control Reduction. At the end of each Plan Year, the Bank may, in its sole discretion, reduce the Deferral Account if the Participant’s Quality Control Measure is not achieved, as more specifically set forth in Addendum A to this Agreement.

2.2.Statement of Account. The Bank shall provide to the Participant, within one hundred and twenty (120) days after the last day of each Plan Year, a statement setting forth the Deferral Account balance.

2.3.Accounting Device Only. The Deferral Account is solely a device for measuring amounts to be paid under this Agreement.  The Deferral Account is not a funded trust of any kind.  The Participant is a general unsecured creditor of the Bank for the payment of benefits.  The benefits represent the Bank’s promise to pay such benefits.  The Participant’s rights are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by the Participant’s creditors.

ARTICLE 3
Benefits During Lifetime

3.1.Normal Annual Distribution Benefit. On the Normal Annual Distribution Date with respect to an Annual Deferred Amount, the Participant shall be entitled to the benefit described in this Section 3.1 in lieu of any other benefit under this Article 3.

3.1.1.Amount of Benefit. The amount of the benefit under Section 3.1 is one hundred percent (100%) of the Deferral Account balance attributable to a specific Annual Deferred Amount, determined as of the Normal Annual Distribution Date.

3.1.2.Payment of Benefit. The Bank shall pay the benefit described in Section 3.1.1 in a single lump-sum payment no later than sixty (60) days following the Normal Distribution Date (the “Normal Payment Date”).  The Participant must be employed with the Bank on the Normal Payment Date to receive the benefit described in Section 3.1.1, and for the avoidance of doubt, all benefits under the Agreement are forfeitable until the

5

Normal Payment Date unless otherwise provided herein.  Notwithstanding the preceding, upon the Participant’s attainment of Final Distribution Age, the Bank shall pay the Participant one hundred percent (100%) of the Deferral Account, regardless of the date an Annual Deferred Amount was credited to the Deferral Account, determined as of the date the Participant attained Final Distribution Age in a single-lump sum no later than sixty (60) days following the Participant’s attainment of Final Distribution Ageherein.

3.2.Termination of Employment Before Early Termination Age. Upon Termination of Employment before attainment of Early Termination Age, the Participant shall forfeit all benefits due under this Agreement.

3.3.Termination of Employment After Early Termination Age. UponTermination of Employment after attainment of Early Termination Age, the Participant shall be entitled to the benefit described in this Section 3.3 in lieu of any other benefit under this Article 3.

3.3.1.Amount of Benefit. The amount of the benefit under Section 3.3, if any, shall be determined by the Board after taking into account the contributions and service rendered by the Participant to the Bank.

3.3.2.Payment of Benefit. The Bank shall pay the benefit described in Section 3.3.1, if any, in a single lump-sum payment to the Participant within sixty (60) days following the last day of the month in which the Participant’s Termination of Employment following attainment of Early Termination Age occurs.

3.4.Disability Benefit.  Upon the Participant’s Disability, the Participant shall be entitled to the benefit described in this Section 3.4 in lieu of any other benefit under this Article 3.

3.4.1.Amount of Benefit.  The amount of the benefit under Section 3.4 is one hundred percent (100%) of the Deferral Account, regardless of the date an Annual Deferred Amount was credited to the Deferral Account, determined as of the date of the Participant’s Disability.

3.4.2.Payment of Benefit. The Bank shall pay the benefit described in Section 3.4.1 to the Participant in a single lump-sum payment within sixty (60) days following the last day of the month in which the Participant’s Disability occurs.

3.5.Change in Control Benefit.  Upon a Change in Control, and subject to Section 6.2, the Participant shall be entitled to the benefit described in this Section 3.5 in lieu of any other benefit under this Article 3.

3.5.1.Amount of Benefit.  The amount of the benefit under Section 3.5 is one hundred percent (100%) of the Deferral Account, regardless of the date an Annual Deferred Amount was credited to the Deferral Account, determined as of the date of the Change in Control.

3.5.2.Payment of Benefit.  The Bank shall pay the benefit described in Section 3.5.1 in a single lump-sum payment within sixty (60) days following the last day of the month in which the Change in Control occurs.

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ARTICLE 4
Death Benefits

4.1.Death During Active Service. If the Participant dies while in the active service of the Bank, the Participant’s Beneficiary shall be entitled to the benefit described in Section 4.1 in lieu of any other benefits under Article 3.

4.1.1.Amount of Benefit. The benefit under Section 4.1 is one hundred percent (100%) of the Deferral Account, regardless of the date an Annual Deferred Amount was credited to the Deferral Account, determined as of the date of the Participant’s death.

4.1.2.Payment of Benefit. The Bank shall pay the amount described in Section 4.1.1 to the Participant’s Beneficiary in a single lump-sum payment within sixty (60) days following the last day of the month in which the Participant’s death occurs.  Payment shall be made in accordance with the attached Exhibit A, Beneficiary Designation Form, which shall be completed and filed by the Participant with the Bank.

ARTICLE 5
Beneficiaries

5.1.Beneficiary Designations. The Participant shall designate a Beneficiary by filing with the Bank a written designation of Beneficiary on a form substantially similar to the form attached as Exhibit A.  The Participant may revoke or modify the designation at any time by filing a new designation.  However, designations will only be effective if signed by the Participant and accepted by the Bank during the Participant’s lifetime.  Unless otherwise communicated to the Bank in writing by the Participant, the Participant’s Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Participant, or if the Participant names a spouse as Beneficiary and the marriage is subsequently dissolved.  If the Participant dies without a valid Beneficiary designation, all payments shall be made to the Participant’s surviving spouse, if any, and if none, to the Participant’s surviving children and the descendants of any deceased child by right of representation, and if no children or descendants survive, to the Participant’s estate.

5.2.Facility of Payment. If a benefit under this Agreement is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his/her property, the Bank may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Bank may require proof of incompetence, minority, or guardianship as it may deem appropriate prior to distribution of the benefit.  Such distribution shall completely discharge the Bank from all liability with respect to such benefit.

ARTICLE 6
General Limitations

6.1.Cause. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not pay any benefit under this Agreement if Participant’s Termination of Employment by the Bank is due to Cause.  Further, if the Participant is receiving benefits under this Agreement, and the Bank discovers after the Participant’s Termination of Employment or other separation from

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service from the Bank, regardless of reason, that the Participant committed any acts while employed with the Bank that rise to the level of “Cause,” as defined below, then, in addition to any other remedies available to it, the Bank may immediately cease payment of any further benefits due under this Agreement.  For purposes of this Agreement, “Cause” shall mean:

(a)conviction or a plea of nolo contendere by Participant to a felony or to fraud, embezzlement or misappropriation of funds;

(b)the commission of a fraudulent act or omission, breach of trust or fiduciary duty, or insider abuse with regard to the Bank, that has had a material adverse effect on the Bank;

(c)material violation by Participant of any applicable law or regulation that has had a material adverse effect on the Bank; or

(d)the willful failure by Participant, without communication to the Board of Directors before such act, to adhere to the Bank’s written policies, which causes a material monetary injury or other material harm to the Bank;

Notwithstanding the foregoing, the Participant shall not be deemed to have been terminated by reason of violating Sections 6.1(b), (c), or (d) until Participant is notified in writing by the Bank (or its successor entity) of a determination of a violation of Sections 6.1(b), (c), or (d), specifying the particulars thereof in reasonably sufficient detail, and giving the Participant a reasonable opportunity (of not less than ten (10) days), together with his/her counsel, to explain to the Bank why there has been no violation of Sections 6.1(b), (c), or (d), followed by a finding by the Bank (i) that in the good faith opinion of the Bank (or its successor entity) the Participant had committed an act described in Sections 6.1(b), (c), or (d) above, (ii) specifying the particulars thereof in detail, and (iii) determining that such violation has not been corrected, or is not capable of correction.  Nothing herein shall limit the right of the Participant or his/her Beneficiary to contest the validity or propriety of any such determination.

6.2.Golden Parachute Payment. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not be required to pay any benefit under this Agreement if, upon the advice of counsel, the Bank determines that the payment of such benefit would be prohibited by 12 C.F.R. Part 359 or any successor regulations regarding employee compensation promulgated by any regulatory agency having jurisdiction over the Bank or its affiliates or to the extent the benefit would be a non-deductible excess parachute payment under Section 280G and 4999 of the Code.  To the extent possible, such benefit payment shall be proportionately reduced to allow payment within the fullest extent permissible under applicable law.  The Participant shall forfeit any amount over and above such reduced amount.

6.3.Claw-Back of Award. The Participant understands and agrees that to the extent required by the Bank to comply with regulatory guidance concerning incentive compensation arrangements, the benefits awarded under this Agreement are subject to reduction, recovery, or “claw-back” by the Bank as necessary for the Bank to ensure that such benefits are appropriately balanced to take into account the risk the Participant’s activities may pose to the Bank under safety and soundness concerns.

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6.4.Changes to Time and/or Form of Payment. Notwithstanding anything in this Agreement to the contrary, to the extent that Code Section 409A is determined to apply to the payments hereunder, any changes to the timing and/or form of payment of benefits under this Agreement are subject to and must comply with the requirements of Code Section 409A and the regulations and guidance issued thereunder.

ARTICLE 7
Claims and Review Procedures

7.1.Claims Procedure. A Participant or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

7.1.1.Initiation –Written Claim. The claimant initiates a claim by submitting to the Bank a written claim for the benefits.

7.1.2.Timing of Bank Response. The Bank shall respond to such claimant within ninety (90) days after receiving the claim.  If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional ninety (90) days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.

7.1.3.Notice of Decision. If the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of such denial.  The Bank shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a)the specific reasons for the denial,

(b)a reference to the specific provisions of the Agreement on which the denial is based,

(c)a description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,

(d)an explanation of the Agreement’s review procedures and the time limits applicable to such procedures, and,

(e)a statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

7.2.Review Procedure. If the Bank denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows:

7.2.1.Initiation – Written Request. To initiate the review, the claimant, within sixty (60) days after receiving the Bank’s notice of denial, must file with the Bank a written request for review.

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7.2.2.Additional Submissions – Information Access. The claimant shall then have the opportunity to submit written comments, documents, records, and other information relating to the claim.  The Bank shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

7.2.3.Considerations on Review. In considering the review, the Bank shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

7.2.4.Timing of Bank Response. The Bank shall respond in writing to such claimant within sixty (60) days after receiving the request for review.  If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.

7.2.5.Notice of Decision. The Bank shall notify the claimant in writing of its decision on the review.  The Bank shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a)the specific reasons for the denial,

(b)a reference to the specific provisions of the Agreement on which the denial is based,

(c)a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and,

(d)a statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

ARTICLE 8
Amendments and Termination

8.1.Amendment. This Agreement may be amended by the Bank at any time; provided, however, that no such amendment shall reduce a benefit to which the Participant is entitled, nor shall any amendment delay or accelerate the payment of a benefit provided under this Agreement except in accordance with requirements under Code Section 409A and the regulations and guidance issued thereunder, to the extent applicable.

8.2.Termination of Agreement.  The Bank may terminate this Agreement in its entirety at any time by written notice to the Participant, provided that such termination and the payment of any benefit upon such termination complies with the requirements of Code Section 409A and the

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regulations and guidance issued thereunder, to the extent applicable.  Upon termination of this Agreement, the Bank shall pay the Participant one hundred percent (100%) of the Deferral Account, regardless of the date an Annual Deferred Amount was credited to the Deferral Account, determined as of the date of the termination of this Agreement, with such payment to be made within sixty (60) days following termination of this Agreement.

ARTICLE 9
Miscellaneous

9.1.Binding Effect. This Agreement shall bind the Participant and the Bank, and their beneficiaries, survivors, executors, administrators, and permitted transferees.

9.2.No Guarantee of Employment. This Agreement is not an employment policy or contract.  It does not give the Participant the right to remain an employee of the Bank, nor does it interfere with the Bank’s right to discharge the Participant.  It also does not require the Participant to remain an employee nor interfere with the Participant’s right to terminate employment at any time.

9.3.Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner, except in accordance with Article 5 with respect to designation of Beneficiaries.

9.4.Tax Withholding. The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement.

9.5.Applicable Law. The Agreement and all rights hereunder shall be governed by the laws of the State of Ohio except to the extent preempted by the laws of the United States of America.

9.6.Unfunded Arrangement; Not an ERISA Plan. The Participant and Beneficiary are general unsecured creditors of the Bank for the payment of benefits under this Agreement.  The benefits represent the mere promise by the Bank to pay such benefits.  The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance by the Participant, or attachment or garnishment by the Participant’s creditors.  Any insurance on the Participant’s life is a general asset of the Bank to which the Participant and Beneficiary have no preferred or secured claim.  In addition, this Agreement is intended to constitute a deferred bonus arrangement and not constitute a plan subject to the Employee Retirement Income Security Act of 1974.

9.7.Severability. Without limitation of any other section contained herein, in case any one or more provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any other respect, such invalidity, illegality, or unenforceability shall not affect the other provisions of this Agreement.  In the event any one or more of the provisions found in the Agreement shall be held to be invalid, illegal, or unenforceable by any governmental regulatory agency or court of competent jurisdiction, this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been a part of this Agreement and such provision shall be deemed substituted by such other provisions as will most nearly accomplish the intent of the parties to the extent permitted by applicable law.

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9.8.Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Participant as to the subject matter hereof.  No rights are granted to the Participant by virtue of this Agreement other than those specifically set forth herein.

9.9.Plan Administrator. The Bank shall have powers which are necessary to administer this Agreement, including but not limited to:

(a)interpreting the provisions of the Agreement;

(b)establishing and revising the method of accounting for the Agreement;

(c)maintaining a record of benefit payments; and

(d)establishing rules and prescribing any forms necessary or desirable to administer the Agreement.

9.10.Named Fiduciary. The Bank shall be the named fiduciary and Plan Administrator under this Agreement.  The named fiduciary may delegate to others certain aspects of the management and operation responsibilities of the Agreement including the employment of advisors and the delegation of ministerial duties to qualified individuals.

9.11.Full Obligation.  Notwithstanding any provision to the contrary, when the Bank has paid either the lifetime benefits or death benefits as appropriate under any section of the Agreement, the Bank has completed its obligation to the Participant.

9.12.Code Section 409A. The benefits described in and provided by the Agreement are intended to be exempt from Code Section 409A as amended, and its corresponding regulations and related guidance (“Section 409A”), or to otherwise comply with the requirements of Section 409A if it is determined that Section 409A applies to the Agreement.  To the extent that any payments made under this Agreement are determined to be subject to Section 409A, the following shall apply to such payment(s):

(a)all payments to be made upon a termination of employment may only be made upon a “separation from service” under Section 409A;

(b)for purposes of the limitations on nonqualified deferred compensation under Section 409A, each payment of compensation shall be treated as a separate payment of compensation; and

(c)notwithstanding anything in this Agreement to the contrary, if the Participant is a “specified employee” of a publicly traded corporation under Section 409A and if payment of any amount under this Agreement is required to be delayed for a period of six (6) months after separation from service pursuant to Section 409A, payment of such amount shall be delayed as required by Section 409A, and the accumulated postponed amount shall be paid in a lump-sum payment within ten (10) days after the end of the six-month period (or within sixty (60) days after death, if earlier).

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In no event may the Participant, directly or indirectly, designate the calendar year of a payment.  No action or failure to act pursuant to this Section shall subject the Bank or the Holding Company thereof to any claim, liability, or expense, and neither the Bank nor the Holding Company shall have any obligation to indemnify or otherwise protect the Participant from the obligation to pay any taxes pursuant to Section 409A.

********

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IN WITNESS WHEREOF, the Participant and a duly authorized Bank officer have signed this Agreement as of the date indicated below.

CFBANK, NATIONAL ASSOCIATION:

By: /s/ Ivory Brown

Name: Ivory Brown

Its: SVP, HR

Date: 8/23/2021

PARTICIPANT:

/s/ Kevin Beerman

Kevin Beerman

Date: 8/13/2021

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CFBank. NA. Deferred Cash Incentive Plan I. CFBank: The percentage of your Base Salary Compensation based cr. the attainment of the weighed performance elements (he Bank assign as set forth below. Each performance element shall have a specific weight assigned to it: which, when all are confined, s la 11 have the potential t> equal one traded percent (100%). Kevin Beerúan. EVP, Chief Financial Officer CTIMS Maximum .Actual Threshold Max Threshold Threshold \\>ight Maximum Threshold Change 1 S s H 0.00% 0.00 H 2- M unman moto : 0« 0.00% 0.00 H J- M tinman H 0.00% 0.00 H IhrotoU 1 4* M j\in«ufn lira hold H+A 0.00% 0.00 H TOTAL 100.0 OH 0.00 H Notes: Base Salary % Award Potential 10.(D% % Award Achieved 0.00% Total Award Earned S Kevin Beerman, EAT, Chief Financial Officer Date

EXHIBIT A

Beneficiary Designation Form

I, Kevin Beerman, designate the following as Beneficiary of benefits under the Deferred Cash Incentive Agreement by and between CFBank, National Association and myself:

Primary:

NameRelationshipPercentageAddress

Primary:

NameRelationshipPercentageAddress

Contingent:

NameRelationshipPercentageAddress

Contingent:

NameRelationshipPercentageAddress

Note:  To name a trust as beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement.

I understand that I may change these Beneficiary designations by delivering a new written designation to the Plan Administrator.  I further understand that the designations will be automatically revoked if the beneficiary predeceases me, or, if I have named my spouse as beneficiary and our marriage is subsequently dissolved.

Name:  _______________________________

Signature:  ____________________________Date:____________

SPOUSAL CONSENT (Required if Spouse is NOT named Beneficiary):

I consent to the Beneficiary designations listed above.

Spouse Name:  _______________________________

Signature:  _______________________________Date:______________

Received by the Plan Administrator this ________ day of ___________________, 2021.

By:  _________________________________

Title:  ________________________________

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EX-10.2

Exhibit 10.2

CFBANK, NATIONAL ASSOCIATION

DEFERRED CASH INCENTIVE AGREEMENT

THIS DEFERRED CASH INCENTIVE AGREEMENT (this “Agreement”) is made by and between CFBank, National Association, Worthington, Ohio, an Ohio banking association (the “Bank”), or any other successor, transferee, or assignees, and Brad Ringwald (the “Participant”).

INTRODUCTION

WHEREAS, the Bank desires to promote its growth and prosperity through the leadership and management of the Participant, and to provide deferred compensation as an incentive and reward for the Participant’s contribution to the success of the Bank.

AGREEMENT

The Participant and the Bank agree as follows:

ARTICLE 1
Definitions

1.1Definitions. Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

1.1.1.“Addendum A” means the form attached to this Agreement, as updated by the Plan Administrator on an annual basis.  If there is a conflict in any terms or provisions between the Addendum A and this Agreement, the terms and provisions of this Agreement shall prevail.

1.1.2.“Annual Deferred Amount” means the annual deferred cash incentive compensation amount, if any, that will be credited to the Participant’s Deferral Account based upon the following criteria, as more specifically set forth on Addendum A: (i) the percentage of the Participant’s annual bonus (if any) to be deferred (such amount determined by the Bank); and (ii) the Participant achieving certain performance objectives.  The Board may change the criteria set forth on Addendum A on an annual basis, including to reduce the percentage deferred into the Deferral Account to zero; provided, however, that such criteria must be communicated to the Participant in writing by delivering a revised Addendum A to the Participant on or before March 31st of the current Plan Year.  Otherwise, the Addendum A for the prior Plan Year will remain in effect.

1.1.3.“Beneficiary” means each person designated pursuant to Article 5, or the estate of the deceased Participant, entitled to benefits, if any, upon the death of the Participant.

1.1.4.“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator, attached to this Agreement as Exhibit A, that the

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Participant completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.

1.1.5.“Cause” has the meaning set forth in Article 6.

1.1.6.“Change in Control” means and includes a change in ownership or effective control of the Bank or Holding Company or in the ownership of a substantial portion of the assets of the Bank or Holding Company, within the meaning of Internal Revenue Code Section 409A and as described in Treasury Regulations §§1.409A-3(i)(5).

1.1.7.“Change in Control Benefit” means the benefit described in Section 3.5.

1.1.8.“Code” means the Internal Revenue Code of 1986, as amended.

1.1.9.“Compensation” means the Participant’s base salary, excluding bonuses.

1.1.10.“Deferral Account” means the bookkeeping account established by the Bank pursuant to Article 2 of this Agreement.

1.1.11.“Death Benefit” means the benefit described in Article 4.

1.1.12.“Disability”means that the Participant is determined to be totally disabled by the Social Security Administration.

1.1.13.“Disability Benefit” means the benefit described in Section 3.4.

1.1.14. “Early Termination Age” means age sixty-two (62).

1.1.15.  “Effective Date” means January 1, 2021.

1.1.16.“Final Distribution Age” means the month, day, and year that the Participant attains age sixty-seven (67).

1.1.17. “Holding Company” means CF Bankshares Inc., an Ohio corporation and registered bank holding company.

1.1.18.“Interest” means the amount described in Section 2.1.2.

1.1.19.  “Normal Annual Distribution Benefit” means the benefit described in Section 3.1.

1.1.20.“Normal Annual Distribution Date” means the month, day, and year which is four (4) years after the date each Annual Deferred Amount is contributed to the Deferral Account, or the date the Participant attains Final Distribution Age, whichever occurs earlier.

1.1.21.“Plan Administrator” means the plan administrator described in Article 9.

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1.1.22.“Plan Year” means each twelve (12) month period commencing on January 1st and ending on December 31st.  Notwithstanding the preceding, the initial Plan Year shall begin on the Effective Date and shall end December 31, 2021.

1.1.23.“Quality Control Measure” means the annual performance measure(s) set forth for each Participant on Addendum A to this Agreement.

1.1.24.“Termination of Employment” shall mean a termination of the Participant’s employment, whether voluntary or involuntary, for any reason whatsoever, determined as follows:

(a)Generally. An Participant terminates employment when the facts and circumstances indicate that the Bank and the Participant reasonably anticipate that the Participant will perform no further services for the Bank or an affiliate of the Bank, or that the level of bona fide services the Participant will perform for the Bank and affiliates of the Bank will permanently decrease to no more than 20% of the average level of bona fide services the Participant performed over the immediately preceding 36-month period (or the full period of service if the Participant has been providing services to the Bank and affiliates of the Bank for less than thirty six (36) months) (the “36-month average”).

(b)Rebuttable Presumptions. Barring contrary facts and circumstances, the Bank shall presume (i) that a decrease in bona fide services to 20% or less of the 36‑month average constitutes a termination of employment, and (ii) that continued bona fide services at 50% or more of the 36-month average does not constitute a termination of employment.

(c)Employee v. Contractor. For purposes of the foregoing, services include those performed as an employee or as an independent contractor.

(d)Leave of Absence. If a Participant takes a bona fide paid leave of absence (as defined in Treasury Regulation § 1.409A-1(h)(1)) and has not otherwise terminated employment, the Bank shall treat the Participant as providing bona fide services at a level equal to the level of services that the Participant would have been required to perform to receive the compensation paid with respect to such leave of absence.  Periods during which a Participant takes a bona fide unpaid leave of absence (as defined in Treasury Regulation § 1.409A-1(h)(1)) and has not otherwise terminated employment will be disregarded for purposes of determining whether a Termination of Employment has occurred (including for purposes of determining the applicable 36-month average).

ARTICLE 2
Deferral Account and Deferral of Compensation

2.1Establishing and Crediting. The Bank shall establish a Deferral Account on its books for

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the Participant, and shall credit to the Deferral Account the following amounts:

2.1.1.Contribution of Deferred Incentive Compensation. At the end of each Plan Year, the Bank will determine the Annual Deferred Amount, if any, with respect to the Participant.  The Bank, at its sole discretion, may add additional amounts to the Deferral Account.  The Bank shall contribute the Annual Deferred Amount to the Deferral Account on the last day of the Plan Year.

2.1.2.Interest. The Bank shall calculate Interest on the Deferral Account balance at the rate set forth on Addendum A, which rate may be changed from time to time by the Bank in its sole discretion.  Interest will be compounded annually.  The Bank shall credit the Interest on the last day of the Plan Year.  Notwithstanding the preceding, for the Plan Year in which the Participant attains the Final Distribution Age (the “Final Plan Year”), the Deferral Account will be credited with a pro-rata amount of Interest based upon the number of completed months during the Final Plan Year, including the month in which the Final Distribution Age is attained.

2.1.3.Quality Control Reduction. At the end of each Plan Year, the Bank may, in its sole discretion, reduce the Deferral Account if the Participant’s Quality Control Measure is not achieved, as more specifically set forth in Addendum A to this Agreement.

2.2.Statement of Account. The Bank shall provide to the Participant, within one hundred and twenty (120) days after the last day of each Plan Year, a statement setting forth the Deferral Account balance.

2.3.Accounting Device Only. The Deferral Account is solely a device for measuring amounts to be paid under this Agreement.  The Deferral Account is not a funded trust of any kind.  The Participant is a general unsecured creditor of the Bank for the payment of benefits.  The benefits represent the Bank’s promise to pay such benefits.  The Participant’s rights are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by the Participant’s creditors.

ARTICLE 3
Benefits During Lifetime

3.1.Normal Annual Distribution Benefit. On the Normal Annual Distribution Date with respect to an Annual Deferred Amount, the Participant shall be entitled to the benefit described in this Section 3.1 in lieu of any other benefit under this Article 3.

3.1.1.Amount of Benefit. The amount of the benefit under Section 3.1 is one hundred percent (100%) of the Deferral Account balance attributable to a specific Annual Deferred Amount, determined as of the Normal Annual Distribution Date.

3.1.2.Payment of Benefit. The Bank shall pay the benefit described in Section 3.1.1 in a single lump-sum payment no later than sixty (60) days following the Normal Distribution Date (the “Normal Payment Date”).  The Participant must be employed with the Bank on the Normal Payment Date to receive the benefit described in Section 3.1.1, and for the avoidance of doubt, all benefits under the Agreement are forfeitable until the

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Normal Payment Date unless otherwise provided herein.  Notwithstanding the preceding, upon the Participant’s attainment of Final Distribution Age, the Bank shall pay the Participant one hundred percent (100%) of the Deferral Account, regardless of the date an Annual Deferred Amount was credited to the Deferral Account, determined as of the date the Participant attained Final Distribution Age in a single-lump sum no later than sixty (60) days following the Participant’s attainment of Final Distribution Ageherein.

3.2.Termination of Employment Before Early Termination Age. Upon Termination of Employment before attainment of Early Termination Age, the Participant shall forfeit all benefits due under this Agreement.

3.3.Termination of Employment After Early Termination Age. UponTermination of Employment after attainment of Early Termination Age, the Participant shall be entitled to the benefit described in this Section 3.3 in lieu of any other benefit under this Article 3.

3.3.1.Amount of Benefit. The amount of the benefit under Section 3.3, if any, shall be determined by the Board after taking into account the contributions and service rendered by the Participant to the Bank.

3.3.2.Payment of Benefit. The Bank shall pay the benefit described in Section 3.3.1, if any, in a single lump-sum payment to the Participant within sixty (60) days following the last day of the month in which the Participant’s Termination of Employment following attainment of Early Termination Age occurs.

3.4.Disability Benefit.  Upon the Participant’s Disability, the Participant shall be entitled to the benefit described in this Section 3.4 in lieu of any other benefit under this Article 3.

3.4.1.Amount of Benefit.  The amount of the benefit under Section 3.4 is one hundred percent (100%) of the Deferral Account, regardless of the date an Annual Deferred Amount was credited to the Deferral Account, determined as of the date of the Participant’s Disability.

3.4.2.Payment of Benefit. The Bank shall pay the benefit described in Section 3.4.1 to the Participant in a single lump-sum payment within sixty (60) days following the last day of the month in which the Participant’s Disability occurs.

3.5.Change in Control Benefit.  Upon a Change in Control, and subject to Section 6.2, the Participant shall be entitled to the benefit described in this Section 3.5 in lieu of any other benefit under this Article 3.

3.5.1.Amount of Benefit.  The amount of the benefit under Section 3.5 is one hundred percent (100%) of the Deferral Account, regardless of the date an Annual Deferred Amount was credited to the Deferral Account, determined as of the date of the Change in Control.

3.5.2.Payment of Benefit.  The Bank shall pay the benefit described in Section 3.5.1 in a single lump-sum payment within sixty (60) days following the last day of the month in which the Change in Control occurs.

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ARTICLE 4
Death Benefits

4.1.Death During Active Service. If the Participant dies while in the active service of the Bank, the Participant’s Beneficiary shall be entitled to the benefit described in Section 4.1 in lieu of any other benefits under Article 3.

4.1.1.Amount of Benefit. The benefit under Section 4.1 is one hundred percent (100%) of the Deferral Account, regardless of the date an Annual Deferred Amount was credited to the Deferral Account, determined as of the date of the Participant’s death.

4.1.2.Payment of Benefit. The Bank shall pay the amount described in Section 4.1.1 to the Participant’s Beneficiary in a single lump-sum payment within sixty (60) days following the last day of the month in which the Participant’s death occurs.  Payment shall be made in accordance with the attached Exhibit A, Beneficiary Designation Form, which shall be completed and filed by the Participant with the Bank.

ARTICLE 5
Beneficiaries

5.1.Beneficiary Designations. The Participant shall designate a Beneficiary by filing with the Bank a written designation of Beneficiary on a form substantially similar to the form attached as Exhibit A.  The Participant may revoke or modify the designation at any time by filing a new designation.  However, designations will only be effective if signed by the Participant and accepted by the Bank during the Participant’s lifetime.  Unless otherwise communicated to the Bank in writing by the Participant, the Participant’s Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Participant, or if the Participant names a spouse as Beneficiary and the marriage is subsequently dissolved.  If the Participant dies without a valid Beneficiary designation, all payments shall be made to the Participant’s surviving spouse, if any, and if none, to the Participant’s surviving children and the descendants of any deceased child by right of representation, and if no children or descendants survive, to the Participant’s estate.

5.2.Facility of Payment. If a benefit under this Agreement is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his/her property, the Bank may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Bank may require proof of incompetence, minority, or guardianship as it may deem appropriate prior to distribution of the benefit.  Such distribution shall completely discharge the Bank from all liability with respect to such benefit.

ARTICLE 6
General Limitations

6.1.Cause. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not pay any benefit under this Agreement if Participant’s Termination of Employment by the Bank is due to Cause.  Further, if the Participant is receiving benefits under this Agreement, and the Bank discovers after the Participant’s Termination of Employment or other separation from

7

service from the Bank, regardless of reason, that the Participant committed any acts while employed with the Bank that rise to the level of “Cause,” as defined below, then, in addition to any other remedies available to it, the Bank may immediately cease payment of any further benefits due under this Agreement.  For purposes of this Agreement, “Cause” shall mean:

(a)conviction or a plea of nolo contendere by Participant to a felony or to fraud, embezzlement or misappropriation of funds;

(b)the commission of a fraudulent act or omission, breach of trust or fiduciary duty, or insider abuse with regard to the Bank, that has had a material adverse effect on the Bank;

(c)material violation by Participant of any applicable law or regulation that has had a material adverse effect on the Bank; or

(d)the willful failure by Participant, without communication to the Board of Directors before such act, to adhere to the Bank’s written policies, which causes a material monetary injury or other material harm to the Bank;

Notwithstanding the foregoing, the Participant shall not be deemed to have been terminated by reason of violating Sections 6.1(b), (c), or (d) until Participant is notified in writing by the Bank (or its successor entity) of a determination of a violation of Sections 6.1(b), (c), or (d), specifying the particulars thereof in reasonably sufficient detail, and giving the Participant a reasonable opportunity (of not less than ten (10) days), together with his/her counsel, to explain to the Bank why there has been no violation of Sections 6.1(b), (c), or (d), followed by a finding by the Bank (i) that in the good faith opinion of the Bank (or its successor entity) the Participant had committed an act described in Sections 6.1(b), (c), or (d) above, (ii) specifying the particulars thereof in detail, and (iii) determining that such violation has not been corrected, or is not capable of correction.  Nothing herein shall limit the right of the Participant or his/her Beneficiary to contest the validity or propriety of any such determination.

6.2.Golden Parachute Payment. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not be required to pay any benefit under this Agreement if, upon the advice of counsel, the Bank determines that the payment of such benefit would be prohibited by 12 C.F.R. Part 359 or any successor regulations regarding employee compensation promulgated by any regulatory agency having jurisdiction over the Bank or its affiliates or to the extent the benefit would be a non-deductible excess parachute payment under Section 280G and 4999 of the Code.  To the extent possible, such benefit payment shall be proportionately reduced to allow payment within the fullest extent permissible under applicable law.  The Participant shall forfeit any amount over and above such reduced amount.

6.3.Claw-Back of Award. The Participant understands and agrees that to the extent required by the Bank to comply with regulatory guidance concerning incentive compensation arrangements, the benefits awarded under this Agreement are subject to reduction, recovery, or “claw-back” by the Bank as necessary for the Bank to ensure that such benefits are appropriately balanced to take into account the risk the Participant’s activities may pose to the Bank under safety and soundness concerns.

8

6.4.Changes to Time and/or Form of Payment. Notwithstanding anything in this Agreement to the contrary, to the extent that Code Section 409A is determined to apply to the payments hereunder, any changes to the timing and/or form of payment of benefits under this Agreement are subject to and must comply with the requirements of Code Section 409A and the regulations and guidance issued thereunder.

ARTICLE 7
Claims and Review Procedures

7.1.Claims Procedure. A Participant or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

7.1.1.Initiation –Written Claim. The claimant initiates a claim by submitting to the Bank a written claim for the benefits.

7.1.2.Timing of Bank Response. The Bank shall respond to such claimant within ninety (90) days after receiving the claim.  If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional ninety (90) days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.

7.1.3.Notice of Decision. If the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of such denial.  The Bank shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a)the specific reasons for the denial,

(b)a reference to the specific provisions of the Agreement on which the denial is based,

(c)a description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,

(d)an explanation of the Agreement’s review procedures and the time limits applicable to such procedures, and,

(e)a statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

7.2.Review Procedure. If the Bank denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows:

7.2.1.Initiation – Written Request. To initiate the review, the claimant, within sixty (60) days after receiving the Bank’s notice of denial, must file with the Bank a written request for review.

9

7.2.2.Additional Submissions – Information Access. The claimant shall then have the opportunity to submit written comments, documents, records, and other information relating to the claim.  The Bank shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

7.2.3.Considerations on Review. In considering the review, the Bank shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

7.2.4.Timing of Bank Response. The Bank shall respond in writing to such claimant within sixty (60) days after receiving the request for review.  If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.

7.2.5.Notice of Decision. The Bank shall notify the claimant in writing of its decision on the review.  The Bank shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a)the specific reasons for the denial,

(b)a reference to the specific provisions of the Agreement on which the denial is based,

(c)a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and,

(d)a statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

ARTICLE 8
Amendments and Termination

8.1.Amendment. This Agreement may be amended by the Bank at any time; provided, however, that no such amendment shall reduce a benefit to which the Participant is entitled, nor shall any amendment delay or accelerate the payment of a benefit provided under this Agreement except in accordance with requirements under Code Section 409A and the regulations and guidance issued thereunder, to the extent applicable.

8.2.Termination of Agreement.  The Bank may terminate this Agreement in its entirety at any time by written notice to the Participant, provided that such termination and the payment of any benefit upon such termination complies with the requirements of Code Section 409A and the

10

regulations and guidance issued thereunder, to the extent applicable.  Upon termination of this Agreement, the Bank shall pay the Participant one hundred percent (100%) of the Deferral Account, regardless of the date an Annual Deferred Amount was credited to the Deferral Account, determined as of the date of the termination of this Agreement, with such payment to be made within sixty (60) days following termination of this Agreement.

ARTICLE 9
Miscellaneous

9.1.Binding Effect. This Agreement shall bind the Participant and the Bank, and their beneficiaries, survivors, executors, administrators, and permitted transferees.

9.2.No Guarantee of Employment. This Agreement is not an employment policy or contract.  It does not give the Participant the right to remain an employee of the Bank, nor does it interfere with the Bank’s right to discharge the Participant.  It also does not require the Participant to remain an employee nor interfere with the Participant’s right to terminate employment at any time.

9.3.Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner, except in accordance with Article 5 with respect to designation of Beneficiaries.

9.4.Tax Withholding. The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement.

9.5.Applicable Law. The Agreement and all rights hereunder shall be governed by the laws of the State of Ohio except to the extent preempted by the laws of the United States of America.

9.6.Unfunded Arrangement; Not an ERISA Plan. The Participant and Beneficiary are general unsecured creditors of the Bank for the payment of benefits under this Agreement.  The benefits represent the mere promise by the Bank to pay such benefits.  The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance by the Participant, or attachment or garnishment by the Participant’s creditors.  Any insurance on the Participant’s life is a general asset of the Bank to which the Participant and Beneficiary have no preferred or secured claim.  In addition, this Agreement is intended to constitute a deferred bonus arrangement and not constitute a plan subject to the Employee Retirement Income Security Act of 1974.

9.7.Severability. Without limitation of any other section contained herein, in case any one or more provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any other respect, such invalidity, illegality, or unenforceability shall not affect the other provisions of this Agreement.  In the event any one or more of the provisions found in the Agreement shall be held to be invalid, illegal, or unenforceable by any governmental regulatory agency or court of competent jurisdiction, this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been a part of this Agreement and such provision shall be deemed substituted by such other provisions as will most nearly accomplish the intent of the parties to the extent permitted by applicable law.

11

9.8.Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Participant as to the subject matter hereof.  No rights are granted to the Participant by virtue of this Agreement other than those specifically set forth herein.

9.9.Plan Administrator. The Bank shall have powers which are necessary to administer this Agreement, including but not limited to:

(a)interpreting the provisions of the Agreement;

(b)establishing and revising the method of accounting for the Agreement;

(c)maintaining a record of benefit payments; and

(d)establishing rules and prescribing any forms necessary or desirable to administer the Agreement.

9.10.Named Fiduciary. The Bank shall be the named fiduciary and Plan Administrator under this Agreement.  The named fiduciary may delegate to others certain aspects of the management and operation responsibilities of the Agreement including the employment of advisors and the delegation of ministerial duties to qualified individuals.

9.11.Full Obligation.  Notwithstanding any provision to the contrary, when the Bank has paid either the lifetime benefits or death benefits as appropriate under any section of the Agreement, the Bank has completed its obligation to the Participant.

9.12.Code Section 409A. The benefits described in and provided by the Agreement are intended to be exempt from Code Section 409A as amended, and its corresponding regulations and related guidance (“Section 409A”), or to otherwise comply with the requirements of Section 409A if it is determined that Section 409A applies to the Agreement.  To the extent that any payments made under this Agreement are determined to be subject to Section 409A, the following shall apply to such payment(s):

(a)all payments to be made upon a termination of employment may only be made upon a “separation from service” under Section 409A;

(b)for purposes of the limitations on nonqualified deferred compensation under Section 409A, each payment of compensation shall be treated as a separate payment of compensation; and

(c)notwithstanding anything in this Agreement to the contrary, if the Participant is a “specified employee” of a publicly traded corporation under Section 409A and if payment of any amount under this Agreement is required to be delayed for a period of six (6) months after separation from service pursuant to Section 409A, payment of such amount shall be delayed as required by Section 409A, and the accumulated postponed amount shall be paid in a lump-sum payment within ten (10) days after the end of the six-month period (or within sixty (60) days after death, if earlier).

12

In no event may the Participant, directly or indirectly, designate the calendar year of a payment.  No action or failure to act pursuant to this Section shall subject the Bank or the Holding Company thereof to any claim, liability, or expense, and neither the Bank nor the Holding Company shall have any obligation to indemnify or otherwise protect the Participant from the obligation to pay any taxes pursuant to Section 409A.

********

13

IN WITNESS WHEREOF, the Participant and a duly authorized Bank officer have signed this Agreement as of the date indicated below.

CFBANK, NATIONAL ASSOCIATION:

By: /s/ Ivory Brown

Name: Ivory Brown

Its: SVP, HR

Date: 8/23/2021

PARTICIPANT:

/s/ Brad Ringwald

Brad Ringwald

Date: 8/12/2021

14

CFBank, N.A. Deferred Cash Incentive Plan Criteria: The percentage of your Base Salary/Compensation based on the attainment of the weighted performance elements the Bank assigns a set forth below. Each performance element shall have a specific weigh assigned to it, which, when all are combined, shall have the potential to equal one hundred percent (100%) OBJECTIVES Brad Ringwald, EVP, Chief Commercial Banking Officer Objective Maximum Threshold Weight Actual/Maximum Threshold/Threshold Change Max% of Objective % of Achieved Maximum $ % 0.00% 0.00% Threshold $ Maximum $ % 0.00% 0.00% Threshold $ Maximum $ % 0.00% 0.00% Threshold $ Maximum $ %+/- 0.00% 0.00% Threshold $ TOTAL 100.00% 0.00% Notes: Base Salary % Award Potential 10.00% % Award achieved 0.00% Total Awarded Earned $ - Brad Ringwald, EVP, Chief Commercial Banking Date

15

EXHIBIT A

Beneficiary Designation Form

I, Brad Ringwald, designate the following as Beneficiary of benefits under the Deferred Cash Incentive Agreement by and between CFBank, National Association and myself:

Primary:

NameRelationshipPercentageAddress

Primary:

NameRelationshipPercentageAddress

Contingent:

NameRelationshipPercentageAddress

Contingent:

NameRelationshipPercentageAddress

Note:  To name a trust as beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement.

I understand that I may change these Beneficiary designations by delivering a new written designation to the Plan Administrator.  I further understand that the designations will be automatically revoked if the beneficiary predeceases me, or, if I have named my spouse as beneficiary and our marriage is subsequently dissolved.

Name:  _______________________________

Signature:  ____________________________Date:____________

SPOUSAL CONSENT (Required if Spouse is NOT named Beneficiary):

I consent to the Beneficiary designations listed above.

Spouse Name:  _______________________________

Signature:  _______________________________Date:______________

Received by the Plan Administrator this ________ day of ___________________, 2021.

By:  _________________________________

Title:  ________________________________

16

EX-31.1

CF BANKSHARES INC.

Exhibit 31.1

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

I, Timothy T. O’Dell, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 of CF Bankshares Inc.;

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 registrant as of, and for, the periods presented in this report;

4. The registrant’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)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’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

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

Dated:  May 10, 2022	/s/ Timothy T. O’Dell
	Timothy T. O’Dell
	President and Chief Executive Officer

EX-31.2

CF BANKSHARES INC.

Exhibit 31.2

Rule 13a-14(a) Certifications of the Principal Financial Officer

I, Kevin J. Beerman certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 of CF Bankshares Inc.;

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 registrant as of, and for, the periods presented in this report;

4. The registrant’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)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’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

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

Dated:   May 10, 2022	/s/ Kevin J. Beerman
	Kevin J. Beerman Executive Vice President and Chief Financial Officer

EX-32.1

CF BANKSHARES INC.

Exhibit 32.1

Section 1350 Certifications

In connection with the Quarterly Report of CF Bankshares Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission (the “Report”), the undersigned, Timothy T. O’Dell, President and Chief Executive Officer of the Company, and Kevin J. Beerman,  Executive Vice President 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 consolidated financial condition and results of operations of the Company and its subsidiaries as of and for the period covered by this Report.

Dated:   May 10, 2022	By:	/s/ Timothy T. O’Dell
		Timothy T. O’Dell
		President and Chief Executive Officer

Dated:   May 10, 2022	By:	/s/ Kevin J. Beerman
		Kevin J. Beerman
		Executive Vice President and Chief Financial Officer

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 02, 2022
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	0-25045
Entity Registrant Name	CF BANKSHARES INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	34-1877137
Entity Address, Address Line One	7000 North High St.
Entity Address, City or Town	Worthington
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43085
City Area Code	614
Local Phone Number	334-7979
Title of 12(b) Security	(Voting) Common Stock, $.01 par value
Trading Symbol	CFBK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001070680
Common Stock [Member]
Entity Common Stock, Shares Outstanding		5,244,076
Non-Voting Common Stock [Member]
Entity Common Stock, Shares Outstanding		1,260,700

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
ASSETS
Cash and cash equivalents	$ 168,290	$ 166,591
Interest-bearing deposits in other financial institutions	100	100
Securities available for sale	13,004	16,347
Equity securities	5,000	5,000
Loans held for sale, at fair value	8,470	27,988
Loans and leases, net of allowance of $15,520 and $15,508	1,281,316	1,214,149
FHLB and FRB stock	7,326	7,315
Premises and equipment, net	6,032	5,869
Operating lease right-of-use assets	1,782	1,925
Bank owned life insurance	25,889	25,743
Accrued interest receivable and other assets	26,986	24,562
Total assets	1,544,195	1,495,589
Deposits
Noninterest bearing	253,778	284,935
Interest bearing	1,045,008	961,417
Total deposits	1,298,786	1,246,352
FHLB advances and other debt	83,235	89,727
Advances by borrowers for taxes and insurance	2,078	2,752
Operating lease liabilities	1,889	2,032
Accrued interest payable and other liabilities	14,972	14,513
Subordinated debentures	14,893	14,883
Total liabilities	1,415,853	1,370,259
Commitments and contingent liabilities
Stockholders' equity
Additional paid-in capital	88,708	88,528
Retained earnings	48,345	44,084
Accumulated other comprehensive loss	(1,220)	(170)
Treasury stock, at cost; 264,387 shares of voting common stock at March 31, 2022 and 246,432 shares of voting common stock at December 31, 2021	(7,559)	(7,180)
Total stockholders' equity	128,342	125,330
Total liabilities and stockholder's equity	1,544,195	1,495,589
Common Stock [Member]
Stockholders' equity
Common stock	55	55
Non-Voting Common Stock [Member]
Stockholders' equity
Common stock	13	13
Series C Preferred Stock [Member]
Stockholders' equity
Preferred stock

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Allowance for loans and leases	$ 15,520	$ 15,508
Common Stock [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	9,090,909	9,090,909
Common stock, shares issued	5,519,614	5,485,980
Treasury stock, shares	264,387	246,432
Non-Voting Common Stock [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,260,700	1,260,700
Common stock, shares issued	1,260,700	1,260,700
Series C Preferred Stock [Member]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	12,607	12,607
Preferred stock, shares issued	0	0

XML

Consolidated Statements Of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Interest and dividend income
Loans and leases, including fees	$ 12,828	$ 12,641
Securities	224	133
FHLB and FRB stock dividends	62	55
Federal funds sold and other	38	28
Total interest and dividend income	13,152	12,857
Interest expense
Deposits	1,684	2,497
FHLB advances and other debt	470	519
Subordinated debentures	224	224
Total interest expense	2,378	3,240
Net interest income	10,774	9,617
Provision for loan and lease losses
Net interest income after provision for loan and lease losses	10,774	9,617
Noninterest income
Service charges on deposit accounts	266	193
Net gains on sales of residential mortgage loans	557	6,360
Swap fee income	13	182
Gain on redemption of life insurance policies		380
Earnings on bank owned life insurance	146	90
Other	64	25
Total noninterest income	1,046	7,230
Noninterest expense
Salaries and employee benefits	3,621	4,609
Occupancy and equipment	319	322
Data processing	520	536
Franchise and other taxes	323	239
Professional fees	607	1,215
Director fees	141	152
Postage, printing and supplies	43	39
Advertising and marketing	45	1,244
Telephone	53	59
Loan expenses	100	57
Depreciation	115	97
FDIC premiums	151	239
Regulatory assessment	66	65
Other insurance	44	28
Other	129	68
Total noninterest expense	6,277	8,969
Income before incomes taxes	5,543	7,878
Income tax expense	1,025	1,457
Net income	$ 4,518	$ 6,421
Earnings per common share:
Basic	$ 0.70	$ 0.98
Diluted	$ 0.69	$ 0.96

XML

Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Consolidated Statements Of Comprehensive Income [Abstract]
Net income	$ 4,518	$ 6,421
Other comprehensive income:
Unrealized holding losses arising during the period related to securities available for sale, net of tax of ($279) and ($8)	(1,050)	(29)
Other comprehensive loss, net of tax	(1,050)	(29)
Comprehensive income	$ 3,468	$ 6,392

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Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Consolidated Statements Of Comprehensive Income [Abstract]
Unrealized holding gains (losses) arising during the period related to securities available for sale, tax	$ (279)	$ (8)

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Consolidated Statements Of Changes In Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Non-Voting Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings (Accumulated Deficit) [Member]	Accumulated Other Comprehensive Income [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2020	$ 54	$ 13	$ 87,637	$ 26,479	$ 96	$ (4,069)	$ 110,210
Net income				6,421			6,421
Other comprehensive income (loss)					(29)		(29)
Issuance of stock based incentive plan shares, net of forfeitures
Restricted stock expense, net of forfeitures			161				161
Stock options exercised			106				106
Acquisition of treasury shares surrendered upon vesting of restricted stock for payment of taxes						(22)	(22)
Dividends declared				(196)			(196)
Balance at Mar. 31, 2021	54	13	87,904	32,704	67	(4,091)	116,651
Balance at Dec. 31, 2021	55	13	88,528	44,084	(170)	(7,180)	125,330
Net income				4,518			4,518
Other comprehensive income (loss)					(1,050)		(1,050)
Issuance of stock based incentive plan shares, net of forfeitures
Restricted stock expense, net of forfeitures			180				180
Acquisition of treasury shares surrendered upon vesting of restricted stock for payment of taxes						(48)	(48)
Purchase of treasury shares						(331)	(331)
Dividends declared				(257)			(257)
Balance at Mar. 31, 2022	$ 55	$ 13	$ 88,708	$ 48,345	$ (1,220)	$ (7,559)	$ 128,342

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Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Consolidated Statements Of Changes In Stockholders' Equity [Abstract]
Issuance of stock based incentive plan, shares	34,000	68,460
Treasury shares, acquisition restricted stock	2,180	1,169
Treasury shares, purchase	15,755
Dividends declared, per share	$ 0.04	$ 0.03

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Consolidated Statements Of Cash Flows [Abstract]
Net income	$ 4,518	$ 6,421
Adjustments to reconcile net income to net cash from (used by) operating activities:
Depreciation	115	97
Amortization, net	(185)	(711)
Deferred income tax (benefit)	(451)	(8)
Originations of loans held for sale	(85,180)	(920,058)
Proceeds from sale of loans held for sale	103,581	763,245
Net gains on sales of residential mortgage loans	(557)	(6,360)
Loss on disposal of premises and equipment		3
Earnings on bank owned life insurance	(146)	(90)
Gain on redemption of life insurance policies		(380)
Stock-based compensation expense	180	161
Net change in:
Accrued interest receivable and other assets	(1,801)	5,429
Operating lease right-of-use asset	143	102
Operating lease right-of-use liability	(143)	(112)
Accrued interest payable and other liabilities	459	(10,141)
Net cash from (used by) operating activities	20,533	(162,402)
Cash flows used by investing activities:
Available-for-sale securities: Maturities, prepayments and calls	2,005	2,007
Available-for-sale securities: Purchases		(3,095)
Purchase of bank owned life insurance		(8,000)
Loan and lease originations and payments, net	(65,281)	(54,838)
Additions to premises and equipment	(278)	(139)
Purchase of FRB and FHLB Stock	(11)	(317)
Purchase of other investments		(348)
Return of investment- joint ventures	107	136
Proceeds from the redemption of life insurance policies		658
Net cash used by investing activities	(63,458)	(63,936)
Cash flows from financing activities:
Net change in deposits	52,434	207,310
Proceeds from FHLB advances and other debt		96,500
Repayments on FHLB advances and other debt	(6,500)	(116,965)
Net change in warehouse line of credit		(56,067)
Net change in advances by borrowers for taxes and insurance	(674)	(108)
Cash dividends paid on common stock	(257)	(196)
Proceeds from exercise of stock options		106
Acquisition of treasury shares surrendered upon vesting of restricted stock for payment of taxes	(48)	(22)
Purchase of treasury shares	(331)
Net cash from financing activities	44,624	130,558
Net change in cash and cash equivalents	1,699	(95,780)
Beginning cash and cash equivalents	166,591	221,594
Ending cash and cash equivalents	168,290	125,814
Supplemental cash flow information:
Interest paid	1,919	3,108
Supplemental noncash disclosures:
Loans transferred from held for sale to portfolio	$ 1,674	15,885
Investment payable on limited partnerships		521
Initial recognition of operating right-of-use lease asset		252
Initial recognition of operating right-of-use lease liability		$ 252

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Summary Of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:

The consolidated financial statements include CF Bankshares Inc. (the “Holding Company”) and its wholly-owned subsidiary, CFBank, National Association (“CFBank”). The Holding Company and CFBank are sometimes collectively referred to herein as the “Company”. Intercompany transactions and balances are eliminated in consolidation. The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in compliance with U.S. generally accepted accounting principles (GAAP). Because this report is based on an interim period, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

In the opinion of the management of the Company, the accompanying unaudited interim consolidated financial statements include all adjustments necessary for a fair presentation of the Company’s financial condition and the results of operations for the periods presented. These adjustments are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q. The financial performance reported for the Company for the three months ended March 31, 2022 is not necessarily indicative of the results that may be expected for the full year. This information should be read in conjunction with the Company’s latest Annual Report to Stockholders and Annual Report on Form 10-K on file with the SEC. Reference is made to the accounting policies of the Company described in Note 1 to the Audited Consolidated Financial Statements contained in the Company’s 2021 Annual Report to Stockholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (referred to herein as the “2021 Audited Financial Statements”). The Company has consistently followed those policies in preparing this Form 10-Q.

Loans and Leases: Loans and leases that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, adjusted for purchase premiums and discounts, deferred loan fees and costs and an allowance for loan and lease losses (ALLL). Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level yield method without anticipating prepayments.

The accrual of interest income on all classes of loans, except other consumer loans, is discontinued and the loan is placed on nonaccrual status at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Other consumer loans are typically charged off no later than 90 days past due. Past due status is based on the contractual terms of the loan for all classes of loans. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Commercial, multi-family residential real estate loans and commercial real estate loans placed on nonaccrual status are individually classified as impaired loans.

All interest accrued but not received for each loan placed on nonaccrual status is reversed against interest income in the period in which it is placed on nonaccrual status. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual status. Loans are considered for return to accrual status provided all the principal and interest amounts that are contractually due are brought current, there is a current and well documented credit analysis, there is reasonable assurance of repayment of principal and interest, and the customer has demonstrated sustained, amortizing payment performance of at least six months.

Allowance for Loan and Lease Losses (ALLL): The ALLL is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required 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. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that CFBank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans within any loan class for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (TDRs) and classified as impaired.

Factors considered by management in determining impairment for all loan classes include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

All substandard loans within the commercial, multi-family residential, commercial real estate and construction segments are individually evaluated for impairment when they are 90 days past due, or earlier than 90 days past due if information regarding the payment capacity of the borrower indicates that payment in full according to the loan terms is doubtful. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate, or at the fair value of collateral, less costs to sell, if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and single-family residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

TDRs of all classes of loans are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using each loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. If the payment of the loan is dependent on the sale of the collateral, then costs to liquidate the collateral are included when determining the impairment. For TDRs that subsequently default, the amount of reserve is determined in accordance with the accounting policy for the ALLL.

Interest income on all classes of impaired loans that are on nonaccrual status is recognized in accordance with the accounting policy for nonaccrual loans. Cash receipts on all classes of impaired loans that are on nonaccrual status are generally applied to the principal balance outstanding. Interest income on all classes of impaired loans that are not on nonaccrual status is recognized on the accrual method. TDRs may be classified as accruing if the borrower has been current for a period of at least six months with respect to loan payments and management expects that the borrower will be able to continue to make payments in accordance with the terms of the restructured note.

The general reserve component covers non-impaired loans of all classes and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by loan class and is based on the actual loss history experienced by the Company over a three-year period. The general component is calculated based on CFBank’s loan balances and actual three-year historical loss rates. For loans with little or no actual loss experience, industry estimates are used based on loan segment. This loss experience is supplemented with other economic and judgmental factors based on the risks present for each loan class. These economic and judgmental factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

CFBank’s charge-off policy for commercial loans, single-family residential real estate loans, multi-family residential real estate loans, commercial real estate loans, construction loans and home equity lines of credit requires management to record a specific reserve or charge-off as soon as it is apparent that the borrower is troubled and there is, or likely will be, a collateral shortfall related to the estimated value of the collateral securing the loan. Other consumer loans are typically charged off no later than 90 days past due.

Joint Ventures: The Holding Company has contributed funds into a series of joint ventures (equity stake) for the purpose of allocating excess liquidity into higher earning assets while diversifying its revenue sources. The joint ventures are engaged in shorter term operating activities related to single family real estate developments. Income is recognized based on a rate of return on the outstanding investment balance. As units are sold, the Holding Company receives an additional incentive payment, which is recognized as income. Under ASU 2016-15, the Company has elected the nature of distribution approach to recognize returns from equity method investments. Returns on investment are classified as cash flows from operating activities and returns of investment are classified as investing activities.

Low Income Housing Tax Credits (LIHTC): The Company has invested in low income housing tax credits through funds that assist corporations in investing in limited partnerships and limited liability companies that own, develop and operate low income residential rental properties for purposes of qualifying for the Housing Tax credit. These investments are accounted for under the proportional amortization method which recognizes the amortization of the investment in proportion to the tax credit and other tax benefits received.

Earnings Per Common Share: The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common stockholders for the period are allocated between common stockholders and participating securities (unvested share-based payment awards) according to dividends declared (or accumulated) and participation rights in undistributed earnings. The factors used in the earnings per share computation follow:

	Three months ended
	March 31,
	2022		2021
	(unaudited)
Basic
Net income	$	4,518	$	6,421
Earnings allocated to participating securities		-		-
Net income allocated to common stockholders	$	4,518	$	6,421
Weighted average common shares outstanding including unvested share-based payment awards		6,505,710		6,623,970
Less: Unvested share-based payment awards-2019 Plan		(87,829)		(86,219)
Average shares		6,417,881		6,537,751
Basic earnings per common share	$	0.70	$	0.98
Diluted
Net earnings allocated to common stockholders	$	4,518	$	6,421
Add back: Preferred Dividends on Series B preferred stock and accretion of discount		-		-
Net earnings allocated to common stockholders	$	4,518	$	6,421
Weighted average common shares outstanding for basic earnings per common share		6,417,881		6,537,751
Add: Dilutive effects of assumed exercises of stock options		42,670		46,621
Add: Dilutive effects of unvested share-based payment awards-2019 Plan		87,829		86,219
Average shares and dilutive potential common shares		6,548,380		6,670,591
Diluted earnings per common share	$	0.69	$	0.96

Dividend Restrictions: Banking regulations require us to maintain certain capital levels and may limit the dividends paid by CFBank to the Holding Company or by the Holding Company to stockholders. The ability of the Holding Company to pay dividends on its common stock is dependent upon the amount of cash and liquidity available at the Holding Company level, as well as the receipt of dividends and other distributions from CFBank to the extent necessary to fund such dividends. The Holding Company is a legal entity that is separate and distinct from CFBank, which has no obligation to make any dividends or other funds available for the payment of dividends by the Holding Company. The Holding Company also is subject to various legal and regulatory policies and guidelines impacting the Holding Company’s ability to pay dividends on its stock. In addition, the Holding Company’s ability to pay dividends on its stock is conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities. Finally, under the terms of the Holding Company’s fixed-to-floating rate subordinated notes, the Holding Company’s ability to pay dividends on its stock is conditioned upon the Holding Company continuing to make required principal and interest payments, and not incurring an event of default, with respect to the subordinated notes.

Future Accounting Matters:

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Once effective, ASU 2016-13 will significantly change current guidance for recognizing impairment of financial instruments. Current guidance requires an "incurred loss" methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. ASU 2016-13 replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to inform credit loss estimates. The ASU requires an organization to estimate all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. Additional disclosures are required. ASU 2016-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. Under the new guidance, entities will determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. Any credit loss will be recognized as an allowance for credit losses on available-for-sale debt securities rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. As a result,

entities will recognize improvements to estimated credit losses on available-for-sale debt securities immediately in earnings rather than as interest income over time, as currently required. ASU 2016-13 eliminates the current accounting model for purchased credit impaired loans and debt securities. Instead, purchased financial assets with credit deterioration will be recorded gross of estimated credit losses as of the date of acquisition and the estimated credit losses amounts will be added to the allowance for credit losses. Thereafter, entities will account for additional impairment of such purchased assets using the models listed above. In October 2019, the FASB voted to extend the implementation of ASU No. 2016-13 for certain financial institutions including smaller reporting companies. As a result, ASU 2016-13 will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company is continuing to evaluate the potential impact on the Company’s financial statements and disclosures. Management has been running and evaluating various scenarios. At this time, the estimated impact on the Company’s consolidated financial statements, including disclosures, cannot be reasonably determined.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is implementing a transition plan to identify and modify its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The Company is continuing to assess ASU 2020-04 and its impact on the Company's transition away from LIBOR for its loan and other financial instruments.

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. In the opinion of management, the disposition or ultimate resolution of such claims and lawsuits is not anticipated to have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

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Revenue Recognition

3 Months Ended

Mar. 31, 2022

Revenue Recognition [Abstract]

Revenue Recognition

NOTE 2 – REVENUE RECOGNITION

Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The majority of our revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as our loans, letters of credit, derivatives and investment securities, as well as revenue generated from our mortgage activities related to net gains on sale of loans.

All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within Noninterest Income. Descriptions of our revenue-generating activities that are within the scope of ASC 606, which are presented in our income statements as components of Noninterest Income are as follows:

Service charges on deposit accounts - these represent general service fees for monthly account maintenance and activity, or transaction-based fees, and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payments for such performance obligations are generally received at the time the performance obligations are satisfied. 

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Securities

3 Months Ended

Mar. 31, 2022

Securities [Abstract]

Securities

NOTE 3 – SECURITIES

The following tables summarize the amortized cost and fair value of the available-for-sale securities portfolio at March 31, 2022 and December 31, 2021 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income (loss):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2022 (unaudited)
Corporate debt	$	9,977	$	-	$	1,477	$	8,500
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		4,542		3		71		4,474
Mortgage-backed securities - residential		29		1		-		30
Total	$	14,548	$	4	$	1,548	$	13,004

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2021
Corporate debt	$	9,976	$	-	$	226	$	9,750
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		6,551	$	31	$	21	$	6,561
Mortgage-backed securities - residential		35		1		-		36
Total	$	16,562	$	32	$	247	$	16,347

There was no other-than-temporary impairment recognized in accumulated other comprehensive income (loss) for securities available for sale at March 31, 2022 or March 31, 2021.

There were no sales of securities during the three months ended March 31, 2022 and 2021.

The amortized cost and fair value of debt securities at March 31, 2022 and December 31, 2021 are shown in the table below by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	March 31, 2022					December 31, 2021
	(unaudited)
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	2,004	$	2,005	$	3,504	$	3,518
Due from one to five years		2,539		2,469		3,047		3,043
Due from five to ten years		9,976		8,500		9,976		9,750
Mortgage-backed securities - residential		29		30		35		36
Total	$	14,548	$	13,004	$	16,562	$	16,347

Fair value of securities pledged as collateral was as follows:

	March 31, 2022		December 31, 2021
	(unaudited)
Pledged as collateral for:
FHLB advances	$	987	$	1,016
Public deposits		493		501
Mortgage banking derivatives		-		1,504
Total	$	1,480	$	3,021

At March 31, 2022 and December 31, 2021, there were no holdings of securities of any one issuer in an amount greater than 10% of stockholders’ equity.

The following table summarizes securities with unrealized losses at March 31, 2022 and December 31, 2021, aggregated by major security type and length of time in a continuous unrealized loss position.

March 31, 2022 (unaudited)	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Corporate debt	$	8,500	$	1,477	$	-	$	-	$	8,500	$	1,477
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		1,496		8		1,474		63		2,970		71
Total temporarily impaired	$	9,996	$	1,485	$	1,474	$	63	$	11,470	$	1,548

December 31, 2021	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Corporate debt	$	9,750	$	226	$	-	$	-	$	9,750	$	226
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury	$	3,024	$	21	$	-	$	-	$	3,024	$	21
Total temporarily impaired	$	12,774	$	247	$	-	$	-	$	12,774	$	247

The unrealized losses at March 31, 2022 and December 31, 2021 were related to one corporate debt security and multiple U.S. Treasuries. Because the decline in fair value was attributable to changes in market conditions, and not credit quality, and because the Company did not have the intent to sell these securities and it was likely that it would not be required to sell these securities before their anticipated recovery, the Company did not consider these securities to be other-than-temporarily impaired at March 31, 2022 and December 31, 2021.

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Loans And Leases

3 Months Ended

Mar. 31, 2022

Loans And Leases [Abstract]

Loans And Leases

NOTE 4 – LOANS AND LEASES

The following table presents the recorded investment in loans and leases by portfolio segment. The recorded investment in loans and leases includes the principal balance outstanding adjusted for purchase premiums and discounts, and deferred loan fees and costs.

	March 31, 2022		December 31, 2021
	(unaudited)
Commercial (1)	$	362,964	$	336,881
Real estate:
Single-family residential		376,475		346,797
Multi-family residential		74,064		76,785
Commercial		361,861		359,562
Construction		95,161		83,360
Consumer:
Home equity lines of credit		24,398		24,228
Other		1,913		2,044
Subtotal		1,296,836		1,229,657
Less: ALLL		(15,520)		(15,508)
Loans and leases, net	$	1,281,316	$	1,214,149

⁽¹⁾Includes $21,765 and $23,157 of commercial leases at March 31, 2022 and December 31, 2021, respectively.

Included in Commercial loans at March 31, 2022 and December 31, 2021, were $387 and $445, respectively, of loans originated under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”). The Coronavirus Aid, Relief, and Economic Security Act of 2020, as amended (the “CARES Act”), authorized the SBA to temporarily guarantee loans under a new 7(a) loan program, the PPP, to provide funding to small businesses to pay certain payroll costs and benefits, and other expenses, during the COVID-19 pandemic. These loans are 100% guaranteed by the SBA and the full principal amount of the loans may qualify for forgiveness. The loans we originated have a maturity of two years, an interest rate of 1.00% and loan payments were deferred for the initial six months (which deferral period was subsequently extended to 10 months pursuant to the Paycheck Protection Program Flexibility Act of 2020). The majority of these loans have been pledged as collateral for borrowings by the Company under the FRB Paycheck Protection Program Lending Facility (“PPPLF”). See Note 8 - FHLB Advances and Other Debt for additional information.

Mortgage Purchase Program

CFBank previously participated in a Mortgage Purchase Program with Northpointe Bank (Northpointe), a Michigan banking corporation, from December 2012 until CFBank discontinued its participation in the program in the first quarter of 2021. Pursuant to the terms of a participation agreement, CFBank purchased participation interests in loans made by Northpointe related to fully underwritten and pre-sold mortgage loans originated by various prescreened mortgage brokers located throughout the U.S.  The underlying loans were individually (MERS) registered loans which were held until funded by the end investor. The mortgage loan investors included Fannie Mae and Freddie Mac, and other major financial institutions.  This process on average took approximately 14 days.  Given the short-term holding period of the underlying loans, common credit risks (such as past due, impairment and TDR, nonperforming, and nonaccrual classification) were substantially reduced. Therefore, no allowance was allocated by CFBank to these loans. These loans were 100% risk rated for CFBank capital adequacy purposes. Under the participation agreement, CFBank agreed to purchase a 95% ownership/participation interest in each of the aforementioned loans, and Northpointe maintained a 5% ownership interest in each loan it participated. CFBank exited this program during the first quarter of 2021 and had no loans outstanding under the program at March 31, 2022 and December 31, 2021.

Allowance for Loan and Lease Losses

The ALLL is a valuation allowance for probable incurred credit losses in the loan portfolio based on management’s evaluation of various factors including 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. A provision for loan and lease losses is charged to operations based on management’s periodic evaluation of these and other pertinent factors described in Note 1 to the 2021 Audited Financial Statements.

The following tables present the activity in the ALLL by portfolio segment for the three months ended March 31, 2022:

	Three months ended March 31, 2022 (unaudited)
			Real Estate								Consumer
	Commercial		Single-family		Multi-family		Commercial		Construction		Home Equity lines of credit		Other		Total
Beginning balance	$	4,127	$	3,348	$	827	$	5,034	$	1,744	$	272	$	156	$	15,508
Addition to (reduction in) provision for loan losses		300		150		(40)		(400)		-		-		(10)		-
Charge-offs		-		-		-		-		-		-		-		-
Recoveries		-		8		-		-		-		4		-		12
Ending balance	$	4,427	$	3,506	$	787	$	4,634	$	1,744	$	276	$	146	$	15,520

The following table presents the activity in the ALLL by portfolio segment for the three months ended March 31, 2021:

	Three months ended March 31, 2021 (unaudited)
			Real Estate								Consumer
	Commercial		Single-family		Multi-family		Commercial		Construction		Home Equity lines of credit		Other		Total
Beginning balance	$	3,426	$	1,299	$	467	$	9,184	$	2,254	$	276	$	116	$	17,022
Addition to (reduction in) provision for loan losses		(55)		525		10		(500)		(25)		-		45		-
Charge-offs		-		-		-		-		-		-		-		-
Recoveries		56		3		-		-		-		5		-		64
Ending balance	$	3,427	$	1,827	$	477	$	8,684	$	2,229	$	281	$	161	$	17,086

The following table presents the balance in the ALLL and the recorded investment in loans and leases by portfolio segment and based on the impairment method as of March 31, 2022 (unaudited):

			Real Estate								Consumer
	Commercial		Single- ‎family		Multi- ‎family		Commercial		Construction		Home Equity ‎lines of credit		Other		Total
ALLL:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	6	$	-	$	-	$	-	$	6
Collectively evaluated for impairment		4,427		3,506		787		4,628		1,744		276		146		15,514
Total ending allowance balance	$	4,427	$	3,506	$	787	$	4,634	$	1,744	$	276	$	146	$	15,520
Loans:
Individually evaluated for impairment	$	139	$	98	$	-	$	777	$	-	$	-	$	-	$	1,014
Collectively evaluated for impairment		362,825		376,377		74,064		361,084		95,161		24,398		1,913		1,295,822
Total ending loan balance	$	362,964	$	376,475	$	74,064	$	361,861	$	95,161	$	24,398	$	1,913	$	1,296,836

The following table presents the balance in the ALLL and the recorded investment in loans and leases by portfolio segment and based on the impairment method as of December 31, 2021:

			Real Estate								Consumer
	Commercial		Single- ‎family		Multi- ‎family		Commercial		Construction		Home Equity ‎lines of credit		Other		Total
ALLL:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	20	$	-	$	-	$	-	$	20
Collectively evaluated for impairment		4,127		3,348		827		5,014		1,744		272		156		15,488
Total ending allowance balance	$	4,127	$	3,348	$	827	$	5,034	$	1,744	$	272	$	156	$	15,508
Loans:
Individually evaluated for impairment	$	221	$	99	$	-	$	2,658	$	-	$	-	$	-	$	2,978
Collectively evaluated for impairment		336,660		346,698		76,785		356,904		83,360		24,228		2,044		1,226,679
Total ending loan balance	$	336,881	$	346,797	$	76,785	$	359,562	$	83,360	$	24,228	$	2,044	$	1,229,657

The following table presents loans individually evaluated for impairment by class of loans as of and for the period ended March 31, 2022. The unpaid principal balance is the contractual principal balance outstanding. The recorded investment is the unpaid principal balance adjusted for partial charge-offs, purchase premiums and discounts, and deferred loan fees and costs. The table presents accrual basis interest income recognized during the three months ended March 31, 2022. Cash payments of interest on these loans during the three months ended March 31, 2022 totaled $30.

							Three months ended
	As of March 31, 2022						March 31, 2022
	(unaudited)						(unaudited)
	Unpaid Principal Balance		Recorded Investment		ALLL Allocated		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Real estate:
Commercial:
Owner occupied	$	-	$	-	$	-	$	-	$	-
Total with no allowance recorded		-		-		-		-		-
With an allowance recorded:
Commercial (1)		403		139		-		165		1
Real estate:
Single-family residential (1)		96		98		-		99		1
Commercial:
Non-owner occupied		777		777		6		1,399		17
Total with an allowance recorded		1,276		1,014		6		1,663		19
Total	$	1,276	$	1,014	$	6	$	1,663	$	19

⁽¹⁾Allowance recorded in an amount less than $1 has been rounded down to zero.

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2021. The unpaid principal balance is the contractual principal balance outstanding. The recorded investment is the unpaid principal balance adjusted for partial charge-offs, purchase premiums and discounts, and deferred loan fees and costs. The table presents accrual basis interest income recognized during the three months ended March 31, 2021. Cash payments of interest during the three months ended March 31, 2021 totaled $41.

							Three months ended
	As of December 31, 2021						March 31, 2021
							(unaudited)
	Unpaid Principal Balance		Recorded Investment		ALLL Allocated		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial:
Owner occupied	$	-	$	-	$	-	$	-	$	-
Total with no allowance recorded		-		-		-		-		-
With an allowance recorded:
Commercial (1)		485		221		-		78		2
Real estate:
Single-family residential (1)		99		99		-		103		1
Commercial:
Non-owner occupied		2,658		2,658		20		2,711		38
Total with an allowance recorded		3,242		2,978		20		2,892		41
Total	$	3,242	$	2,978	$	20	$	2,892	$	41

The following table presents the recorded investment in nonperforming loans by class of loans:

	March 31, 2022		December 31, 2021
	(unaudited)
Loans past due over 90 days still on accrual	$	-	$	-
Nonaccrual loans:
Commercial		139		147
Real estate:
Single-family residential		653		656
Consumer:
Home equity lines of credit:
Originated for portfolio		153		153
Purchased for portfolio		61		41
Total nonaccrual		1,006		997
Total nonaccrual and nonperforming loans	$	1,006	$	997

Nonaccrual loans include both smaller balance single-family mortgage and consumer loans that are collectively evaluated for impairment and individually classified impaired loans. There were no loans 90 days or more past due and still accruing interest at March 31, 2022 or December 31, 2021.

The following table presents the aging of the recorded investment in past due loans and leases by class of loans as of March 31, 2022 (unaudited):

	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Nonaccrual Loans Not > 90 days Past Due
Commercial	$	-	$	-	$	-	$	-	$	362,964	$	139
Real estate:
Single-family residential		169		-		563		732		375,743		90
Multi-family residential		-		-		-		-		74,064		-
Commercial:
Non-owner occupied		-		-		-		-		181,662		-
Owner occupied		-		-		-		-		135,601		-
Land		-		-		-		-		44,598		-
Construction		-		-		-		-		95,161		-
Consumer:
Home equity lines of credit:
Originated for portfolio		-		-		153		153		24,082		-
Purchased for portfolio		-		-		61		61		102		-
Other		-		-		-		-		1,913		-
Total	$	169	$	-	$	777	$	946	$	1,295,890	$	229

The following table presents the aging of the recorded investment in past due loans and leases by class of loans as of December 31, 2021:

	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Nonaccrual Loans Not > 90 days Past Due
Commercial	$	-	$	-	$	-	$	-	$	336,881	$	147
Real estate:
Single-family residential		2,144		652		563		3,359		343,438		93
Multi-family residential		-		-		-		-		76,785		-
Commercial:
Non-owner occupied		-		-		-		-		185,130		-
Owner occupied		-		-		-		-		134,352		-
Land		-		-		-		-		40,080		-
Construction		-		-		-		-		83,360		-
Consumer:
Home equity lines of credit:
Originated for portfolio		2		-		153		155		23,909		-
Purchased for portfolio		-		-		41		41		123		-
Other		-		-		-		-		2,044		-
Total	$	2,146	$	652	$	757	$	3,555	$	1,226,102	$	240

Short-term Loan Deferrals

Under the CARES Act, as amended by the Consolidated Appropriations Act, 2021, financial institutions are permitted to not classify loan modifications as TDRs that were related to the impact of COVID-19 if:

The modifications were made between March 1, 2020 and the earlier of January 1, 2022 or 60 days after the end of the public health emergency, and

The underlying loans were not more than 30 days past due as of December 31, 2019.

We implemented a loan modification program in accordance with the CARES Act to provide temporary relief to borrowers that met the requirements under the CARES Act. The program allowed for deferral of payments for up to 90 days, which we could extend for up to an additional 90 days at our option. The deferred payments and accrued interest during the deferral period were due and payable on or before the maturity of the loans. At March 31, 2022, there were no loans remaining on temporary deferrals under this program.

Troubled Debt Restructurings (TDRs):

From time to time, the terms of certain loans are modified as TDRs, where concessions are granted to borrowers experiencing financial difficulties. The modification of the terms of such loans may include one or a combination of the following: a reduction of the stated interest rate of the loan; an increase in the stated rate of interest lower than the current market rate for new debt with similar risk; an extension of the maturity date; or a change in the payment terms.

As of March 31, 2022 and December 31, 2021, TDRs totaled $1,014 and $2,978, respectively. The Company allocated $6 and $20 of specific reserves to loans whose terms had been modified in TDRs as of March 31, 2022 and December 31, 2021, respectively. The Company had not committed to lend any additional amounts as of March 31, 2022 or December 31, 2021 to customers with outstanding loans classified as nonaccrual TDRs.

During the three months ended March 31, 2022 and March 31, 2021, there were no loans modified as a TDR.

There were no TDRs in payment default or that became nonperforming during the quarters ended March 31, 2022 and March 31, 2021. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms, at which time the loan is re-evaluated to determine whether an impairment loss should be recognized, either through a write-off or specific valuation allowance, so that the loan is reported, net, at the present value of estimated future cash flows, or at the fair value of collateral, less cost to sell, if repayment is expected solely from the collateral.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

Nonaccrual loans include loans that were modified and identified as TDRs and the loans are not performing. At March 31, 2022 and at December 31, 2021, nonaccrual TDRs were as follows:

	March 31, 2022		December 31, 2021
	(unaudited)
Commercial	$	139	$	147
Total	$	139	$	147

Nonaccrual loans at March 31, 2022 and December 31, 2021 do not include $875 and $2,831, respectively, of TDRs where customers have established a sustained period of repayment performance, generally six months, the loans are current according to their modified terms and repayment of the remaining contractual payments is expected. These loans are included in total impaired loans.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. Management analyzes loans individually by classifying the loans as to credit risk. This analysis includes commercial, commercial real estate and multi-family residential real estate loans. Internal loan reviews for these loan types are performed at least annually, and more often for loans with higher credit risk. Adjustments to loan risk ratings are made based on the reviews and at any time information is received that may affect risk ratings. The following definitions are used for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of CFBank’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that there will be some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Loans not meeting the criteria to be classified into one of the above categories are considered to be not rated or pass-rated loans. Loans listed as not rated are primarily groups of homogeneous loans. Past due information is the primary credit indicator for groups of homogenous loans. Loans listed as pass-rated loans are loans that are subject to internal loan reviews and are determined not to meet the criteria required to be classified as special mention, substandard or doubtful.

The recorded investment in loans and leases by risk category and by class of loans and leases as of March 31, 2022 and based on the most recent analysis performed follows.

(unaudited)	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	227	$	362,598	$	-	$	-	$	139	$	362,964
Real estate:
Single-family residential		375,822		-		-		653		-		376,475
Multi-family residential		-		74,064		-		-		-		74,064
Commercial:
Non-owner occupied		-		180,886		-		776		-		181,662
Owner occupied		-		133,776		1,825		-		-		135,601
Land		-		44,598		-		-		-		44,598
Construction		702		93,928		531		-		-		95,161
Consumer:
Home equity lines of credit:
Originated for portfolio		24,082		-		-		153		-		24,235
Purchased for portfolio		102		-		-		61		-		163
Other		1,913		-		-		-		-		1,913
	$	402,848	$	889,850	$	2,356	$	1,643	$	139	$	1,296,836

The recorded investment in loans and leases by risk category and by class of loans and leases as of December 31, 2021 follows.

	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	-	$	336,660	$	-	$	74	$	147	$	336,881
Real estate:
Single-family residential		346,141		-		-		656		-		346,797
Multi-family residential		-		76,785		-		-		-		76,785
Commercial:
Non-owner occupied		-		182,472		-		2,658		-		185,130
Owner occupied		-		132,470		1,882		-		-		134,352
Land		-		40,080		-		-		-		40,080
Construction		-		82,825		535		-		-		83,360
Consumer:
Home equity lines of credit:
Originated for portfolio		23,911		-		-		153		-		24,064
Purchased for portfolio		123		-		-		41		-		164
Other		2,044		-		-		-		-		2,044
	$	372,219	$	851,292	$	2,417	$	3,582	$	147	$	1,229,657

Leases:

The following lists the components of the net investment in direct financing leases:

	March 31, 2022		December 31, 2021
	(unaudited)
Total minimum lease payments to be received	$	23,817	$	25,488
Less: unearned income		(2,100)		(2,385)
Plus: Indirect initial costs		48		54
Net investment in direct financing leases	$	21,765	$	23,157

The following summarizes the future minimum lease payments receivable in fiscal year 2022 and in subsequent fiscal years:

2022, excluding the three months ended March 31, 2022	$	4,789
2023		6,137
2024		5,732
2025		4,795
2026		2,087
Thereafter		277
Total future minimum payments	$	23,817

 

XML

Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Leases

NOTE 5 – LEASES

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) and all subsequent ASUs that modified Topic 842. For the Company, Topic 842 primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee.

The leases in which the Company is the lessee are comprised of real estate property for branches and offices and for equipment with terms extending through 2032. All of our leases are classified as operating leases, and therefore, were previously not recognized on the Company’s consolidated balance sheets. With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated balance sheets as a right-of-use (“ROU”) asset and a corresponding operating lease liability. The Company does not have any leases classified as finance leases.

The calculated amount of the ROU assets and lease liabilities are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion which were considered, as applicable, in the calculation of the ROU assets and lease liabilities. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is not readily determinable in our operating leases, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. At March 31, 2022, the weighted-average remaining lease term for the Company’s operating leases was 4.5 years and the weighted-average discount rate was 5.59%.

The Company’s operating lease costs were $143 for the three months ended March 31, 2022 and $103 for the three months ended March 31, 2021. The variable lease costs totaled $84 for the three months ended March 31, 2022 and $84 for the three months ended March 31, 2021. As the Company elected not to separate lease and non-lease components for all classes of underlying assets and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities.

Future minimum operating lease payments as of March 31, 2022 are as follows:

2022, excluding the three months ended March 31, 2022	$	522
2023		553
2024		458
2025		209
2026		114
Thereafter		275
Total future minimum rental commitments		2,131
Less - amounts representing interest		(242)
Total operating lease liabilities	$	1,889

XML

Fair Value

3 Months Ended

Mar. 31, 2022

Fair Value [Abstract]

Fair Value

NOTE 6 - FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of asset and liability:

Securities available for sale: The fair value of securities available for sale is determined using pricing models that vary based on asset class and include available trade, bid and other market information or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2).

Derivatives: The fair value of derivatives, which includes yield maintenance provisions, interest rate lock commitments and interest rate swaps, is based on valuation models using observable market data as of the measurement date (Level 2).

TBA mortgage – back securities: To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, the Company enters into either a forward sales contract to sell loans to investors when using best efforts or a trade of “to be announced (TBA)” mortgage-backed securities for mandatory delivery. The forward sales contracts lock in a price for the sale of loans with similar characteristics to the specific rate lock commitments based on a valuation model using observable market data for pricing commitments (Level 2).

Impaired loans: The fair value of impaired loans with specific allocations of the ALLL is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by a third-party appraisal management company approved by the Board of Directors annually. Once received, the loan officer or a member of the credit department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Appraisals are updated as needed based on facts and circumstances associated with the individual properties. Real estate appraisals typically incorporate measures such as recent sales prices for comparable properties. Appraisers may make adjustments to the sales prices of the comparable properties as deemed appropriate based on the age, condition or general characteristics of the subject property. Management applies an additional discount to real estate appraised values, typically to reflect changes in market conditions since the date of the appraisal if warranted and to cover disposition costs (including selling expenses) based on the intended disposition method of the property. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Loans held for sale: Loans held for sale are carried at fair value, as determined by outstanding commitments from third party investors (Level 2).

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at ‎ March 31, 2022 using Significant ‎Other Observable Inputs
	(Level 2)
	(unaudited)
Financial Assets:
Securities available for sale:
Corporate debt	$	8,500
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		4,474
Mortgage-backed securities - residential		30
Total securities available for sale	$	13,004
Loans held for sale	$	8,470
Derivative assets	$	1,809
TBA Mortgage-back securities	$	71
Financial Liabilities:
Derivative liabilities	$	1,809
Interest rate lock commitments	$	42

	Fair Value Measurements at ‎ December 31, 2021 using Significant ‎Other Observable Inputs
	(Level 2)
Financial Assets:
Securities available for sale:
Corporate debt	$	9,750
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		6,561
Mortgage-backed securities - residential		36
Total securities available for sale	$	16,347
Loans held for sale	$	27,988
Derivative assets	$	538
Interest rate lock commitments	$	555
Financial Liabilities:
Derivative liabilities		538
TBA Mortgage-backed securities	$	73

The Company had no assets or liabilities measured at fair value on a recurring basis that were measured using Level 1 or Level 3 inputs at March 31, 2022 or December 31, 2021. There were no transfers of assets or liabilities measured at fair value between levels during the periods ended March 31, 2022 and December 31, 2021.

There were no assets or liabilities measured at fair value on a non-recurring basis at March 31, 2022 and December 31, 2021.

There were no write-downs of impaired collateral dependent loans during the three months ended March 31, 2022 or 2021.

Financial Instruments Recorded Using Fair Value Option

The Company has elected the fair value option for loans held for sale. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on loans held for investment. None of these loans were 90 days or more past due or on nonaccrual as of March 31, 2022 or December 31, 2021.

As of March 31, 2022 and December 31, 2021, the aggregate fair value, contractual balance and gain or loss on loans held for sale were as follows:

	March 31, 2022		December 31, 2021
	(unaudited)
Aggregate fair value	$	8,470	$	27,988
Contractual balance		8,562		27,632
Gain (loss)	$	(92)	$	356

The total amount of gains and losses from changes in fair value included in earnings for the three months ended March 31, 2022 and 2021 for loans held for sale were:

	Three months ended March 31,
	2022		2021
	(unaudited)
Interest income	$	172	$	2,220
Interest expense		-		-
Change in fair value		(448)		(6,937)
Total change in fair value	$	(276)	$	(4,717)

The carrying amounts and estimated fair values of financial instruments at March 31, 2022 were as follows:

	Fair Value Measurements at March 31, 2022 Using:
	Carrying
(unaudited)	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	168,290	$	168,290	$	-	$	-	$	168,290
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		13,004		-		13,004		-		13,004
Equity Securities		5,000		-		5,000		-		5,000
Loans held for sale		8,470		-		8,470		-		8,470
Loans and leases, net		1,281,316		-		-		1,287,102		1,287,102
FHLB and FRB stock		7,326		n/a		n/a		n/a		n/a
Accrued interest receivable		4,966		3		116		4,847		4,966
Derivative assets		1,809		-		1,809		-		1,809
TBA mortgage-back securities		71		-		71		-		71
Financial liabilities
Deposits	$	(1,298,786)	$	(700,624)	$	(590,838)	$	-	$	(1,291,462)
FHLB advances and other borrowings		(83,235)		-		(81,242)		-		(81,242)
Advances by borrowers for taxes and insurance		(2,078)		-		-		(2,078)		(2,078)
Subordinated debentures		(14,893)		-		(15,315)		-		(15,315)
Accrued interest payable		(688)		-		(688)		-		(688)
Derivative liabilities		(1,809)		-		(1,809)		-		(1,809)
Interest rate lock commitments		(42)		-		(42)		-		(42)

The carrying amounts and estimated fair values of financial instruments at December 31, 2021 were as follows:

	Fair Value Measurements at December 31, 2021 Using:
	Carrying
	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	166,591	$	166,591	$	-	$	-	$	166,591
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		16,347		-		16,347		-		16,347
Equity Securities		5,000		-		5,000		-		5,000
Loans held for sale		27,988		-		27,988		-		27,988
Loans and leases, net		1,214,149		-		-		1,231,228		1,231,228
FHLB and FRB stock		7,315		n/a		n/a		n/a		n/a
Accrued interest receivable		4,143		2		91		3,947		4,040
Derivative assets		538		-		538		-		538
Interest rate lock commitments		555		-		555		-		555
Financial liabilities
Deposits	$	(1,246,352)	$	(661,818)	$	(585,214)	$	-	$	(1,247,032)
FHLB advances and other borrowings		(89,727)		-		(90,670)		-		(90,670)
Advances by borrowers for taxes and insurance		(2,752)		-		-		(2,752)		(2,752)
Subordinated debentures		(14,883)		-		(16,051)		-		(16,051)
Accrued interest payable		(228)		-		(228)		-		(228)
Derivative liabilities		(538)		-		(538)		-		(538)
TBA mortgage-backed securities		(73)		-		(73)		-		(73)

The methods and assumptions, not previously presented, used to estimate fair values are described below.

Cash and Cash Equivalents and Interest-Bearing Deposits in Other Financial Institutions

The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

FHLB and FRB Stock

It is not practical to determine the fair value of FHLB and FRB stock due to restrictions placed on its transferability.

Loans and Leases

Fair values of loans and leases as of March 31, 2022, excluding loans held for sale, are estimated utilizing an exit pricing methodology as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. The discount rate for the discounted cash flow analyses includes a credit quality adjustment. Impaired loans are valued at the lower of cost or fair value as described previously.

Deposits

The fair values disclosed for demand deposits (e.g., interest and noninterest bearing checking, passbook savings, and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

FHLB Advances and Other Debt

The fair values of the Company’s long-term FHLB and credit facility advances are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

The fair values of the Company’s subordinated debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

The PPPLF funding has a fixed rate of 0.35% for all participants; thus the carrying value approximates the estimated fair value and represents a Level 2 measurement.

Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value resulting in a Level 1, 2 or 3 classification, consistent with the asset or liability with which they are associated.

Advances by Borrowers for Taxes and Insurance

The carrying amount of advances by borrowers for taxes and insurance approximates fair value resulting in a Level 3 classification, consistent with the liability with which they are associated.

Off-Balance-Sheet Instruments

The fair value of off-balance-sheet items is not considered material. 

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Subordinated Debentures

3 Months Ended

Mar. 31, 2022

Subordinated Debentures [Abstract]

Subordinated Debentures

NOTE 7 – SUBORDINATED DEBENTURES

2003 Subordinated debentures:

In December 2003, Central Federal Capital Trust I, a trust formed by the Holding Company, closed a pooled private offering of 5,000 trust preferred securities with a liquidation amount of $1 per security. The Holding Company issued $5,155 of subordinated debentures to the trust in exchange for ownership of all of the common stock of the trust and the proceeds of the preferred securities sold by the trust. The Holding Company is not considered the primary beneficiary of this trust (which is classified as a variable interest entity); therefore, the trust is not consolidated in the Company’s financial statements, but rather the subordinated debentures are shown as a liability. The Holding Company’s investment in the common stock of the trust was $155 and is included in other assets.

The Holding Company may redeem the subordinated debentures, in whole or in part, in a principal amount with integral multiples of $1, at 100% of the principal amount, plus accrued and unpaid interest. The subordinated debentures mature on December 30, 2033. The subordinated debentures are also redeemable in whole or in part from time to time, upon the occurrence of specific events defined within the trust indenture. There are no required principal payments on the subordinated debentures over the next five years. The Holding Company has the option to defer interest payments on the subordinated debentures for a period not to exceed five consecutive years.

The subordinated debentures have a variable rate of interest, reset quarterly, equal to the three-month London Interbank Offered Rate (LIBOR) plus 2.85%, which was 3.85% at March 31, 2022 and 3.07% at December 31, 2021. 

2018 Fixed-to-floating rate subordinated notes:

In December 2018, the Holding Company entered into subordinated note purchase agreements with certain qualified institutional buyers and completed a private placement of $10 million of fixed-to-floating rate subordinated notes with a maturity date of December 30, 2028 pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder. After payment of approximately $388 of debt issuance costs, the Holding Company’s net proceeds were approximately $9,612.

The subordinated notes initially bear interest at 7.00%, from and including December 20, 2018, to but excluding December 30, 2023, payable semi-annually in arrears on June 30 and December 30 of each year. From and including December 30, 2023, to but excluding December 30, 2028 or the earlier redemption of the notes, the interest rate will reset quarterly to an interest rate equal to the then current three-month LIBOR (but not less than zero) plus 4.14%, payable quarterly in arrears on March 30, June 30, September 30, and December 30 of each year. The Holding Company may, at its option, redeem the notes beginning on December 30, 2023 and on any scheduled interest payment date thereafter. At March 31, 2022, the balance of the subordinated notes, net of unamortized debt issuance costs, was $9,738.

 

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FHLB Advances And Other Debt

3 Months Ended

Mar. 31, 2022

FHLB Advances And Other Debt [Abstract]

FHLB Advances And Other Debt

NOTE 8 – FHLB ADVANCES AND OTHER DEBT

FHLB advances and other debt were as follows:

	Weighted
	Average Rate	March 31, 2022		December 31, 2021
		(unaudited)
FHLB fixed rate advances:
Maturities:
2022	0.89%	$	3,500	$	10,000
2023	0.92%		3,500		3,500
2024	1.46%		18,500		18,500
2026	1.45%		16,000		16,000
Thereafter	1.69%		17,000		17,000
Total FHLB fixed rate advances			58,500		65,000
Fixed rate other debt:
FRB PPPLF advances	0.35%		450		450
Variable rate other debt:
Holding Company credit facility	3.85%		24,285		24,277
Total		$	83,235	$	89,727

Each FHLB advance is payable at its maturity date, with a prepayment penalty for fixed-rate advances.

Prior to May 21, 2021, the Holding Company had a term loan in the original principal amount of $5,000 with an additional $10,000 revolving line-of-credit with a third-party bank. That credit facility was refinanced into a new $35 million facility on May 21, 2021. The credit facility is revolving until May 21, 2024, at which time any then-outstanding balance will be converted to a 10-year term note on a graduated 10-year amortization. Borrowings on the credit facility bear interest at a fixed rate of 3.85% until May 21, 2026, and the interest rate then converts to a floating rate equal to PRIME with a floor of 3.25%. The purpose of the credit facility is to provide an additional source of liquidity for the Holding Company and to provide funds for the Holding Company to downstream as additional capital to CFBank to support growth. At March 31, 2022, the Company had an outstanding balance, net of unamortized debt issuance costs, of $24,285 on the facility.

At March 31, 2022, CFBank had availability in unused lines of credit at two commercial banks in amounts of $50,000 and $15,000. There were no outstanding borrowings on either line at March 31, 2022 and December 31, 2021. Interest on any principal amounts outstanding from time to time under these lines accrues daily at a variable rate based on the commercial bank’s cost of funds and current market returns.

During 2019, CFBank entered into a $25,000 warehouse facility with a commercial bank. The warehouse facility was used to periodically fund loans held for sale from the close (funding) date until they were sold in the secondary market. Borrowings on the facility bore interest at the greater of (a) the 30-day LIBOR plus 2.00% or (b) 4.00% and were secured by the specific loans that were funded. This warehouse facility, which was closed during the third quarter of 2021, had no outstanding balance at March 31, 2022 and December 31, 2021.

During 2020, CFBank entered into an additional $75,000 warehouse facility with a commercial bank. The purpose of the warehouse facility was to periodically fund loans held for sale from the close (funding) date until sold in the secondary market. Borrowings on the facility bore interest at the greater of (a) the 30-day LIBOR plus 2.35% or (b) 2.90% and were secured by the specific loans that were funded. This warehouse facility, which was closed during the second quarter of 2021, had no outstanding balance at March 31, 2022 and December 31, 2021.

The CARES Act amended the SBA loan program, in which CFBank participates, to create the PPP as a guaranteed, unsecured loan program to fund operational costs of eligible businesses, organizations and self-employed persons during COVID-19.  During 2020, CFBank processed 558 PPP loans totaling approximately $126 million. To support the effectiveness of the PPP, the Federal Reserve Board (the “FRB”) introduced the PPPLF to extend credit to financial institutions that made PPP loans, with the related PPP loans used as collateral on the borrowings. The PPPLF borrowings have a fixed interest rate of 0.35% and a maturity equal to the maturity date of the related PPP loans, with the PPP loans maturing two years from the origination date of the PPP loan. If a PPP loan pays off early, the corresponding PPPLF borrowing must be paid off as well. At March 31, 2022, the Company’s PPP loans and related PPPLF funding had a weighted average life of approximately 0.1 years. At March 31, 2022, the principal balance of PPPLF advances outstanding was $450. At December 31, 2021, the Company’s PPP loans and related PPPLF funding had a weighted average life of approximately 0.2 years. At December 31, 2021, the principal balance of PPPLF advances outstanding was $450.

Other than the PPPLF borrowing, there were no outstanding borrowings with the FRB at March 31, 2022 and December 31, 2021.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2022

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 9 – STOCK-BASED COMPENSATION

The Company has two stock-based compensation plans (collectively, the “Plans”), as described below, under which awards are outstanding or may be granted in the future. Total compensation cost that has been charged against income for those Plans totaled $180 and $161, respectively, for the three months ended March 31, 2022 and March 31, 2021. The total income tax effect was $38 and $34, respectively, for the three months ended March 31, 2022 and March 31, 2021.

Both Plans are stockholder-approved plans and authorize stock option grants and restricted stock awards to be made to directors, officers and employees. The 2009 Equity Compensation Plan (the “2009 Plan”), which was approved by stockholders on May 21, 2009, replaced the Company’s 2003 equity compensation plan (the “2003 Plan”) and provided for 36,363 shares, plus any remaining shares available to grant or that are later forfeited or expire under the 2003 Plan, to be made available to be issued as stock option grants, stock appreciation rights or restricted stock awards. On May 16, 2013, the Company’s stockholders approved the First Amendment to the 2009 Plan to increase the number of shares of common stock reserved for stock option grants and restricted stock awards thereunder to 272,727. The 2009 Plan terminated in accordance with its terms on March 19, 2019 and, as a result, no further awards may be granted under the 2009 Plan.

The 2019 Equity Incentive Plan (the “2019 Plan”), which was approved by stockholders on May 29, 2019, authorizes up to 300,000 shares (plus any shares that are subject to grants under the 2009 Plan and that are later forfeited or expire), to be awarded pursuant to stock options, stock appreciation rights, restricted stock or restricted stock units. There were 150,921 shares remaining available for awards of stock options, stock appreciation rights, restricted stock or restricted stock units under the 2019 Plan at March 31, 2022.

Stock Options:

The Plans permit the grant of stock options to directors, officers and employees of the Holding Company and CFBank. Option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of grant, generally have vesting periods ranging from one year to three years, and are exercisable for ten years from the date of grant. Unvested stock options immediately vest upon a change of control.

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.

There were no options granted during the three months ended March 31, 2022 and March 31, 2021. There were no options exercised during the three months ended March 31, 2022 and 14,544 options exercised during the three months ended March 31, 2021.

A summary of stock option activity in the Plans for the three months ended March 31, 2022 follows (unaudited):

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Intrinsic Value
Outstanding at beginning of year	63,992	$	7.43
Exercised	-		-
Expired	-		-
Cancelled or forfeited	-		-
Outstanding at end of period	63,992	$	7.43	1.3	$	952
Exercisable at end of period	63,992	$	7.43	1.3	$	952

During the three months ended March 31, 2022, there were no stock options canceled, forfeited or expired. Stock options to purchase a total of 1,454 common shares were canceled, forfeited or expired during the three months ended March 31, 2021. As of March 31, 2022, all stock options granted under the Plans were vested.

Restricted Stock Awards:

The Plans also permit the grant of restricted stock awards to directors, officers and employees. Compensation is recognized over the vesting period of the awards based on the fair value of the stock at grant date. The fair value of the stock is determined using the closing share price on the date of grant and shares generally have vesting periods of one year to three years. There were 34,000 shares of restricted stock granted under the Plan during the three months ended March 31, 2022. There were 68,460 shares of restricted stock granted during the three months ended March 31, 2021.

A summary of changes in the Company’s nonvested restricted stock awards as of March 31, 2022 follows (unaudited):

Nonvested Shares	Shares	Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2022	89,895	$	16.32
Granted	34,000		21.72
Vested	(25,312)		17.04
Forfeited	(366)		18.96
Nonvested at March 31, 2022	98,217	$	17.99

As of March 31, 2022 and 2021, the unrecognized compensation cost related to nonvested restricted stock awards granted under the Plans was $1,593 and $1,677, respectively.

There were 366 shares of restricted stock forfeited during the three month period ended March 31, 2022, and 183 shares of restricted stock forfeited during the three months ended March 31, 2021. There were 25,312 shares of restricted stock that vested during the three months ended March 31, 2022, and 5,884 shares of restricted stock that vested during the three months ended March 31, 2021.

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Regulatory Capital Matters

3 Months Ended

Mar. 31, 2022

Regulatory Capital Matters [Abstract]

Regulatory Capital Matters

NOTE 10 – REGULATORY CAPITAL MATTERS

CFBank is subject to regulatory capital requirements administered by federal banking agencies. Prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

Prompt corrective action regulations provide five classifications for banking organizations: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If a banking organization is classified as adequately capitalized, regulatory approval is required to accept brokered deposits. If a banking organization is classified as undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

In July 2013, the Holding Company’s primary federal regulator, the FRB, published final rules (the “Basel III Capital Rules”) establishing a new comprehensive capital framework for U.S. banking organizations. The rules implement the Basel Committee's December 2010 framework known as “Basel III” for strengthening international capital standards as well as certain provisions of the Dodd-Frank Act. The Basel III Capital Rules provide higher capital requirements and more restrictive leverage and liquidity ratios than those previously in place. In addition, in order to avoid limitations on capital distributions, such as dividend payments and certain bonus payments to executive officers, the Basel III Capital Rules require insured financial institutions to hold a capital conservation buffer of common equity tier 1 capital above the minimum risk-based capital requirements. The capital conservation buffer was phased in over time, became fully effective on January 1, 2019, and consists of an additional amount of common equity equal to 2.5% of risk-weighted assets. The Basel III Capital Rules revise the regulatory agencies' prompt corrective action framework by incorporating the new regulatory capital minimums and updating the definition of common equity. The Basel III Capital Rules became effective for CFBank on January 1, 2015, and were fully phased in effective January 1, 2019. Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios of Common Equity Tier 1 capital, Tier 1 capital and Total capital, as defined in the regulations, to risk-weighted assets, and of Tier 1 capital to adjusted quarterly average assets (“Leverage Ratio”). CFBank’s implementation of the new rules on January 1, 2015 did not have a material impact on our capital needs or classification.

The Basel III Capital Rules require CFBank to maintain: 1) a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of 4.5%, plus a 2.5% “capital conservation buffer” (resulting in a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of 7.0%); 2) a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, plus the capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.5%); 3) a minimum ratio of Total capital to risk-weighted assets of 8.0%, plus the capital conservation buffer (resulting in a minimum Total capital ratio of 10.5%); and 4) a minimum Leverage Ratio of 4.0%.

The capital conservation buffer is designed to absorb losses during periods of economic stress. Failure to maintain the minimum Common Equity Tier 1 capital ratio plus the capital conservation buffer will result in potential restrictions on a banking institution’s ability to pay dividends, repurchase stock and/or pay discretionary compensation to its employees.

The following tables present actual and required capital ratios as of March 31, 2022 and December 31, 2021 for CFBank under the Basel III Capital Rules. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

	Actual			Minimum Capital Required-Basel III Fully Phased-In			To Be Well Capitalized Under Applicable ‎Regulatory Capital Standards
	Amount		Ratio	Amount		Ratio	Amount		Ratio
March 31, 2022 (unaudited)
Total Capital to risk weighted assets	$	175,997	14.01%	$	131,940	10.50%	$	125,657	10.00%
Tier 1 (Core) Capital to risk weighted assets		160,288	12.76%		106,808	8.50%		100,526	8.00%
Common equity tier 1 capital to risk-weighted assets		160,288	12.76%		87,960	7.00%		81,677	6.50%
Tier 1 (Core) Capital to adjusted total assets (Leverage ratio)		160,288	11.06%		57,959	4.00%		72,449	5.00%

	Actual			Minimum Capital Required-Basel III Fully Phased-In			To Be Well Capitalized Under Applicable ‎Regulatory Capital Standards
	Amount		Ratio	Amount		Ratio	Amount		Ratio
December 31, 2021
Total Capital to risk weighted assets	$	170,392	14.02%	$	127,588	10.50%	$	121,512	10.00%
Tier 1 (Core) Capital to risk weighted assets		155,195	12.77%		103,286	8.50%		97,210	8.00%
Common equity tier 1 capital to risk-weighted assets		155,195	12.77%		85,059	7.00%		78,983	6.50%
Tier 1 (Core) Capital to adjusted total assets (Leverage ratio)		155,195	11.29%		54,984	4.00%		68,730	5.00%

CFBank converted from a mutual to a stock institution in 1998, and a “liquidation account” was established in the amount of $14,300, which was the net worth reported in the conversion prospectus. The liquidation account represents a calculated amount for the purposes described below, and it does not represent actual funds included in the consolidated financial statements of the Company. Eligible depositors who have maintained their accounts, less annual reductions to the extent they have reduced their deposits, would be entitled to a priority distribution from this account if CFBank liquidated and its assets exceeded its liabilities. Dividends may not reduce CFBank’s stockholder’s equity below the required liquidation account balance.

Dividend Restrictions:

Banking regulations require us to maintain certain capital levels and may limit the dividends paid by CFBank to the Holding Company or by the Holding Company to stockholders. The ability of the Holding Company to pay dividends on its stock is dependent upon the amount of cash and liquidity available at the Holding Company level, as well as the receipt of dividends and other distributions from CFBank to the extent necessary to fund such dividends. The Holding Company is a legal entity that is separate and distinct from CFBank, which has no obligation to make any dividends or other funds available for the payment of dividends by the Holding Company. The Holding Company also is subject to various legal and regulatory policies and guidelines impacting the Holding Company’s ability to pay dividends on its stock. In addition, the Holding Company’s ability to pay dividends on its stock is conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities. Finally, under the terms of the Holding Company’s fixed-to-floating rate subordinated debt, the Holding Company’s ability to pay dividends on its stock is conditioned upon the Holding Company continuing to make required principal and interest payments, and not incurring an event of default, with respect to the subordinated debt.

Additionally, CFBank does not intend to make distributions to the Holding Company that would result in a recapture of any portion of its thrift bad debt reserve as discussed in Note 12-Income Taxes. 

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Derivative Instruments

3 Months Ended

Mar. 31, 2022

Derivative Instruments [Abstract]

Derivative Instruments

NOTE 11 – DERIVATIVE INSTRUMENTS

Interest-rate swaps:

CFBank utilizes interest-rate swaps as part of its asset/liability management strategy to help manage its interest rate risk position, and does not use derivatives for trading purposes. The notional amount of the interest-rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest-rate swap agreements. CFBank was party to interest-rate swaps with a combined notional amount of $37,348 at March 31, 2022 and $44,887 at December 31, 2021.

The objective of the interest-rate swaps is to protect the related fixed-rate commercial real estate loans from changes in fair value due to changes in interest rates. CFBank has a program whereby it lends to its borrowers at a fixed rate with the loan agreement containing a two-way yield maintenance provision, which will be invoked in the event of prepayment of the loan, and is expected to exactly offset the fair value of unwinding the swap. The yield maintenance provision represents an embedded derivative which is bifurcated from the host loan contract and, as such, the swaps and embedded derivatives are not designated as hedges. Accordingly, both instruments are carried at fair value and changes in fair value are reported in current period earnings. CFBank currently does not have any derivatives designated as hedges.

The counterparty to CFBank’s interest-rate swaps is exposed to credit risk whenever the interest-rate swaps are in a liability position. At March 31, 2022, CFBank had $2,725 in cash pledged as collateral for these derivatives. Should the liability increase beyond the collateral value, CFBank will be required to pledge additional collateral.

Additionally, CFBank’s interest-rate swap instruments contain provisions that require CFBank to remain well capitalized under regulatory capital standards and to comply with certain other regulatory requirements. The interest-rate swaps may be called by the counterparty if CFBank fails to maintain well-capitalized status under regulatory capital standards or becomes subject to certain adverse regulatory events such as a regulatory cease and desist order. As of March 31, 2022, CFBank was well-capitalized under regulatory capital standards and was not subject to any adverse regulatory events specified in CFBank’s interest-rate swap instruments.

Summary information about the derivative instruments is as follows:

	March 31, 2022		December 31, 2021
	(unaudited)
Notional amount	$	37,348	$	44,887
Weighted average pay rate on interest-rate swaps		4.21%		4.21%
Weighted average receive rate on interest-rate swaps		3.14%		3.00%
Weighted average maturity (years)		6.8		6.9
Fair value of derivative asset	$	1,809	$	538
Fair value of yield derivative liability		(1,809)		(538)

The fair value of the yield maintenance provisions and interest-rate swaps is recorded in other assets and other liabilities, respectively, in the consolidated balance sheet. Changes in the fair value of the yield maintenance provisions and interest-rate swaps are reported currently in earnings, as other noninterest income in the consolidated statements of income. There were no net gains or losses recognized in earnings related to yield maintenance provisions and interest-rate swaps for the three months ended March 31, 2022 or 2021.

Mortgage banking derivatives:

Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market are considered derivatives. These mortgage banking derivatives are not designated in hedge relationships. The Company had approximately $5,777 and $50,312 of interest rate lock commitments related to residential mortgage loans at March 31, 2022 and December 31, 2021, respectively. The fair value of these mortgage banking derivatives was reflected by a derivative liability of ($42) at March 31, 2022 and is included in other liabilities in the consolidated balance sheet. The fair value was reflected by a derivative asset of $555 at December 31, 2021, which was included in other assets in the consolidated balance sheet. Fair values were estimated based on anticipated gains on the sale of the underlying loans. Changes in the fair values of these mortgage banking derivatives are included in net gains on sales of loans.

Mortgage banking activities include two types of commitments: rate lock commitments and forward loan commitments. Rate lock commitments are loans in our pipeline that have an interest rate locked with the customer. The commitments are generally for periods of 30-60 days and are at market rates. In order to mitigate the effect of the interest rate risk inherent in providing rate lock commitments, we economically hedge our commitments by entering into either a forward loan sales contract under best efforts or a trade of “to be announced (TBA)” mortgage-backed securities (“notional securities”) for mandatory delivery. The Company had approximately $3,500 and $53,250 of TBA mortgage-backed securities at March 31, 2022 and December 31, 2021, respectively. The fair value of these TBA mortgage-backed securities was $71 at March 31, 2022 and is included in other assets in the consolidated balance sheet. The fair value of the TBA mortgage-backed securities at December 31, 2021 was ($73) and is included in other liabilities in the consolidated balance sheet. The changes in fair value related to movements in market rates of the rate lock commitments and the forward loan sales contracts and notional securities generally move in opposite directions, and the net impact of changes in these valuations on net income during the loan commitment period is generally inconsequential. The Company has not formally designated these derivatives as a qualifying hedge relationship and, accordingly, accounts for such forward contracts as freestanding derivatives with changes in fair value recorded to earnings each period. 

The following table reflects the amount and market value of mortgage banking derivatives included in the consolidated balance sheet as of the period end (in thousands):

	March 31, 2022				December 31, 2021
	(unaudited)
	Notional Amount		Fair Value		Notional Amount		Fair Value
Assets (Liabilities):
Interest rate commitments	$	5,777	$	(42)	$	50,312	$	555
TBA mortgage-back securities		3,500		71		53,250		(73)

As of March 31, 2022, CFBank has minimum collateral posting thresholds with certain of its derivative counterparties and has posted cash collateral of $3,847.

The following table represents the notional amount of loans sold during the three months ended March 31, 2022 and 2021 (unaudited):

	Three Months ended
	March 31,
	2022		2021
Notional amount of loans sold	$	85,180	$	756,886

The following table represents the revenue recognized on mortgage activities for the three ended March 31, 2022 and 2021 (unaudited):

	Three Months ended
	March 31,
	2022		2021
Gain on loans sold		61		11,916
Gain (loss) from change in fair value of loans held-for-sale		(448)		(6,937)
Gain (loss) from change in fair value of derivatives		944		1,381
	$	557	$	6,360

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Income Taxes

3 Months Ended

Mar. 31, 2022

Income Taxes [Abstract]

Income Taxes

NOTE 12 – INCOME TAXES

At March 31, 2022, the Company had a deferred tax asset recorded in the amount of approximately $4,774. At December 31, 2021, the Company had a deferred tax asset recorded of approximately $4,044. At March 31, 2022 and December 31, 2021, the Company had no unrecognized tax benefits recorded. The Company is subject to U.S. federal income tax and is no longer subject to federal examination for years prior to 2018.

Our deferred tax assets are composed of U.S. net operating losses (“NOLs”), and other temporary book to tax differences. When determining the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded as a benefit, the Company conducts a regular assessment of all available information. This information includes, but is not limited to, taxable income in prior periods, projected future income and projected future reversals of deferred tax items. Based on these criteria, the Company determined as of March 31, 2022 that no valuation allowance was required against the net deferred tax asset.

In 2012, the Company completed a recapitalization program pursuant to which the Holding Company sold $22,500 in common stock, which improved the capital levels of CFBank and provided working capital for the Holding Company. The result of the change in stock ownership associated with the stock offering, however, was that the Company incurred an ownership change within the guidelines of Section 382 of the Internal Revenue Code of 1986. At March 31, 2022, the Company had net operating loss carryforwards of $22,253, which expire at various dates from 2024 to 2032. As a result of the ownership change, the Company's ability to utilize carryforwards that arose before the 2012 stock offering closed is limited to $163 per year. Due to this limitation, management determined it is more likely than not that $20,520 of net operating loss carryforwards will expire unutilized. As required by accounting standards, the Company reduced the carrying value of deferred tax assets, and the corresponding valuation allowance, by the $6,977 tax effect of this lost realizability.

Federal income tax laws provided additional deductions, totaling $2,250, for thrift bad debt reserves established before 1988. Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would have totaled $473 at year-end 2021. However, if CFBank were wholly or partially liquidated or otherwise ceases to be a bank, or if tax laws were to change, this amount would have to be recaptured and a tax liability recorded. Additionally, any distributions in excess of CFBank’s current or accumulated earnings and profits would reduce amounts allocated to its bad debt reserve and create a tax liability for CFBank.

The Company records income tax expense based on the federal statutory rate adjusted for the effect of low income housing credits, bank owned life insurance, dividends on equity securities and other miscellaneous items. The effective tax rate was approximately 18.5% and 18.5% for the three months ended March 31, 2022 and March 31, 2021, respectively, which management believes were reasonable estimates for the effective tax rates for such periods.

The following table summarizes the major components creating differences between income taxes at the federal statutory tax rate and the effective tax rate recorded in the consolidated statements of income for the three months ended March 31, 2022 and 2021:

	For the three months ended ‎ March 31,
	2022	2021
	(unaudited)
Statutory tax rate	21.0%	21.0%
Increase (decrease) resulting from:
Restricted stock	(0.9%)	(0.6%)
Tax exempt earnings on bank owned life insurance	(0.6%)	(0.2%)
Gain on redemption of life insurance policies	0.0%	(1.0%)
Dividends on equity securities	(0.2%)	(0.2%)
Low income housing credits	(0.8%)	(0.5%)
Effective tax rate	18.5%	18.5%

 

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2022

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss)

NOTE 13- ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes within each classification of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2022 and 2021 and summarizes the significant amounts reclassified out of each component of accumulated other comprehensive income (loss):

Changes in Accumulated Other Comprehensive Income (Loss) by Component (1)
	Three months ended
	March 31,
	2022		2021
	(unaudited)
	Unrealized Gains and Losses on Available-for-Sale Securities
Accumulated other comprehensive income (loss), beginning of period	$	(170)	$	96
Other comprehensive loss before reclassifications (2)		(1,050)		(29)
Net current-period other comprehensive loss		(1,050)		(29)
Accumulated other comprehensive income (loss), end of period	$	(1,220)	$	67

⁽¹⁾All amounts are net of tax. Amounts in parentheses indicate a reduction of other comprehensive income.

⁽²⁾There were no amounts reclassified out of other comprehensive income for the three months ended March 31, 2022 and 2021.

 

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Preferred Stock

3 Months Ended

Mar. 31, 2022

Preferred Stock [Abstract]

Preferred Stock

NOTE 14 - PREFERRED STOCK

On October 25, 2019, the Company entered into a Securities Purchase Agreement with certain accredited investors in a private placement for an aggregate offering price of approximately $25 million, pursuant to which on October 31, 2019, the Holding Company sold shares of the Company’s common stock and shares of a new series of the Company’s Non-Voting Convertible Perpetual Preferred Stock, Series C, par value $0.01 per share (the “Series C Preferred Stock”).

Effective as of the close of business on May 28, 2020, all outstanding shares of the Company’s Series C Preferred Stock were converted into shares of a newly-authorized class of Non-Voting Common Stock of the Company following approval of an amendment to the Company’s Certificate of Incorporation, as amended, by the stockholders of the Company. As of March 31, 2022, there were no shares of Series C Preferred Stock outstanding and an aggregate of 1,260,700 shares of Non-Voting Common Stock outstanding.
‎

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Branch Sale

3 Months Ended

Mar. 31, 2022

Branch Sale [Abstract]

Branch Sale

NOTE 15- BRANCH SALE

On December 29, 2020, CFBank entered into a Branch Purchase and Assumption Agreement (the “P&A Agreement”) with Consumers National Bank (“Consumers”) providing for the acquisition by Consumers of two branches of CFBank in Columbiana County, Ohio – CFBank’s drive-up branch location in Wellsville, Ohio and CFBank’s branch location in Calcutta, Ohio (the “Branches”).

On July 16, 2021, Consumers completed its purchase of certain assets and assumption of certain liabilities associated with the Branches. Pursuant to the terms of the P&A Agreement, Consumers assumed certain deposit liabilities and acquired certain loans, as well as cash, real property, personal property and other fixed assets associated with the Branches.

During the third quarter of 2021, the Company recognized a combined gain on sale of deposits of $1.9 million related to the sale of the Branches.

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Subsequent Event

3 Months Ended

Mar. 31, 2022

Subsequent Event [Abstract]

Subsequent Event

NOTE 16 – SUBSEQUENT EVENT

On April 2, 2022, the Company’s Board of Directors declared a Cash Dividend of $0.04 per share payable to shareholders on April 25, 2022.

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Summary Of Significant Accounting Policies (Policy)

3 Months Ended

Mar. 31, 2022

Summary Of Significant Accounting Policies [Abstract]

Basis Of Presentation

Basis of Presentation:

The consolidated financial statements include CF Bankshares Inc. (the “Holding Company”) and its wholly-owned subsidiary, CFBank, National Association (“CFBank”). The Holding Company and CFBank are sometimes collectively referred to herein as the “Company”. Intercompany transactions and balances are eliminated in consolidation. The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in compliance with U.S. generally accepted accounting principles (GAAP). Because this report is based on an interim period, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

In the opinion of the management of the Company, the accompanying unaudited interim consolidated financial statements include all adjustments necessary for a fair presentation of the Company’s financial condition and the results of operations for the periods presented. These adjustments are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q. The financial performance reported for the Company for the three months ended March 31, 2022 is not necessarily indicative of the results that may be expected for the full year. This information should be read in conjunction with the Company’s latest Annual Report to Stockholders and Annual Report on Form 10-K on file with the SEC. Reference is made to the accounting policies of the Company described in Note 1 to the Audited Consolidated Financial Statements contained in the Company’s 2021 Annual Report to Stockholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (referred to herein as the “2021 Audited Financial Statements”). The Company has consistently followed those policies in preparing this Form 10-Q.

Loans And Leases

Loans and Leases: Loans and leases that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, adjusted for purchase premiums and discounts, deferred loan fees and costs and an allowance for loan and lease losses (ALLL). Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level yield method without anticipating prepayments.

The accrual of interest income on all classes of loans, except other consumer loans, is discontinued and the loan is placed on nonaccrual status at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Other consumer loans are typically charged off no later than 90 days past due. Past due status is based on the contractual terms of the loan for all classes of loans. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Commercial, multi-family residential real estate loans and commercial real estate loans placed on nonaccrual status are individually classified as impaired loans.

All interest accrued but not received for each loan placed on nonaccrual status is reversed against interest income in the period in which it is placed on nonaccrual status. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual status. Loans are considered for return to accrual status provided all the principal and interest amounts that are contractually due are brought current, there is a current and well documented credit analysis, there is reasonable assurance of repayment of principal and interest, and the customer has demonstrated sustained, amortizing payment performance of at least six months.

Allowance For Loan And Lease Losses (ALLL)

Allowance for Loan and Lease Losses (ALLL): The ALLL is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required 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. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that CFBank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans within any loan class for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (TDRs) and classified as impaired.

Factors considered by management in determining impairment for all loan classes include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

All substandard loans within the commercial, multi-family residential, commercial real estate and construction segments are individually evaluated for impairment when they are 90 days past due, or earlier than 90 days past due if information regarding the payment capacity of the borrower indicates that payment in full according to the loan terms is doubtful. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate, or at the fair value of collateral, less costs to sell, if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and single-family residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

TDRs of all classes of loans are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using each loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. If the payment of the loan is dependent on the sale of the collateral, then costs to liquidate the collateral are included when determining the impairment. For TDRs that subsequently default, the amount of reserve is determined in accordance with the accounting policy for the ALLL.

Interest income on all classes of impaired loans that are on nonaccrual status is recognized in accordance with the accounting policy for nonaccrual loans. Cash receipts on all classes of impaired loans that are on nonaccrual status are generally applied to the principal balance outstanding. Interest income on all classes of impaired loans that are not on nonaccrual status is recognized on the accrual method. TDRs may be classified as accruing if the borrower has been current for a period of at least six months with respect to loan payments and management expects that the borrower will be able to continue to make payments in accordance with the terms of the restructured note.

The general reserve component covers non-impaired loans of all classes and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by loan class and is based on the actual loss history experienced by the Company over a three-year period. The general component is calculated based on CFBank’s loan balances and actual three-year historical loss rates. For loans with little or no actual loss experience, industry estimates are used based on loan segment. This loss experience is supplemented with other economic and judgmental factors based on the risks present for each loan class. These economic and judgmental factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

CFBank’s charge-off policy for commercial loans, single-family residential real estate loans, multi-family residential real estate loans, commercial real estate loans, construction loans and home equity lines of credit requires management to record a specific reserve or charge-off as soon as it is apparent that the borrower is troubled and there is, or likely will be, a collateral shortfall related to the estimated value of the collateral securing the loan. Other consumer loans are typically charged off no later than 90 days past due.

Joint Ventures

Joint Ventures: The Holding Company has contributed funds into a series of joint ventures (equity stake) for the purpose of allocating excess liquidity into higher earning assets while diversifying its revenue sources. The joint ventures are engaged in shorter term operating activities related to single family real estate developments. Income is recognized based on a rate of return on the outstanding investment balance. As units are sold, the Holding Company receives an additional incentive payment, which is recognized as income. Under ASU 2016-15, the Company has elected the nature of distribution approach to recognize returns from equity method investments. Returns on investment are classified as cash flows from operating activities and returns of investment are classified as investing activities.

Low Income Housing Tax Credits (LIHTC)

Low Income Housing Tax Credits (LIHTC): The Company has invested in low income housing tax credits through funds that assist corporations in investing in limited partnerships and limited liability companies that own, develop and operate low income residential rental properties for purposes of qualifying for the Housing Tax credit. These investments are accounted for under the proportional amortization method which recognizes the amortization of the investment in proportion to the tax credit and other tax benefits received.

Earnings Per Common Share

Earnings Per Common Share: The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common stockholders for the period are allocated between common stockholders and participating securities (unvested share-based payment awards) according to dividends declared (or accumulated) and participation rights in undistributed earnings. The factors used in the earnings per share computation follow:

	Three months ended
	March 31,
	2022		2021
	(unaudited)
Basic
Net income	$	4,518	$	6,421
Earnings allocated to participating securities		-		-
Net income allocated to common stockholders	$	4,518	$	6,421
Weighted average common shares outstanding including unvested share-based payment awards		6,505,710		6,623,970
Less: Unvested share-based payment awards-2019 Plan		(87,829)		(86,219)
Average shares		6,417,881		6,537,751
Basic earnings per common share	$	0.70	$	0.98
Diluted
Net earnings allocated to common stockholders	$	4,518	$	6,421
Add back: Preferred Dividends on Series B preferred stock and accretion of discount		-		-
Net earnings allocated to common stockholders	$	4,518	$	6,421
Weighted average common shares outstanding for basic earnings per common share		6,417,881		6,537,751
Add: Dilutive effects of assumed exercises of stock options		42,670		46,621
Add: Dilutive effects of unvested share-based payment awards-2019 Plan		87,829		86,219
Average shares and dilutive potential common shares		6,548,380		6,670,591
Diluted earnings per common share	$	0.69	$	0.96

Dividend Restrictions

Dividend Restrictions: Banking regulations require us to maintain certain capital levels and may limit the dividends paid by CFBank to the Holding Company or by the Holding Company to stockholders. The ability of the Holding Company to pay dividends on its common stock is dependent upon the amount of cash and liquidity available at the Holding Company level, as well as the receipt of dividends and other distributions from CFBank to the extent necessary to fund such dividends. The Holding Company is a legal entity that is separate and distinct from CFBank, which has no obligation to make any dividends or other funds available for the payment of dividends by the Holding Company. The Holding Company also is subject to various legal and regulatory policies and guidelines impacting the Holding Company’s ability to pay dividends on its stock. In addition, the Holding Company’s ability to pay dividends on its stock is conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities. Finally, under the terms of the Holding Company’s fixed-to-floating rate subordinated notes, the Holding Company’s ability to pay dividends on its stock is conditioned upon the Holding Company continuing to make required principal and interest payments, and not incurring an event of default, with respect to the subordinated notes.

Future Accounting Matters

Future Accounting Matters:

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Once effective, ASU 2016-13 will significantly change current guidance for recognizing impairment of financial instruments. Current guidance requires an "incurred loss" methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. ASU 2016-13 replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to inform credit loss estimates. The ASU requires an organization to estimate all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. Additional disclosures are required. ASU 2016-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. Under the new guidance, entities will determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. Any credit loss will be recognized as an allowance for credit losses on available-for-sale debt securities rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. As a result,

entities will recognize improvements to estimated credit losses on available-for-sale debt securities immediately in earnings rather than as interest income over time, as currently required. ASU 2016-13 eliminates the current accounting model for purchased credit impaired loans and debt securities. Instead, purchased financial assets with credit deterioration will be recorded gross of estimated credit losses as of the date of acquisition and the estimated credit losses amounts will be added to the allowance for credit losses. Thereafter, entities will account for additional impairment of such purchased assets using the models listed above. In October 2019, the FASB voted to extend the implementation of ASU No. 2016-13 for certain financial institutions including smaller reporting companies. As a result, ASU 2016-13 will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company is continuing to evaluate the potential impact on the Company’s financial statements and disclosures. Management has been running and evaluating various scenarios. At this time, the estimated impact on the Company’s consolidated financial statements, including disclosures, cannot be reasonably determined.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is implementing a transition plan to identify and modify its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The Company is continuing to assess ASU 2020-04 and its impact on the Company's transition away from LIBOR for its loan and other financial instruments.

General Litigation

General LitigationThe Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. In the opinion of management, the disposition or ultimate resolution of such claims and lawsuits is not anticipated to have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

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Summary Of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2022

Summary Of Significant Accounting Policies [Abstract]

Earnings Per Common Share

	Three months ended
	March 31,
	2022		2021
	(unaudited)
Basic
Net income	$	4,518	$	6,421
Earnings allocated to participating securities		-		-
Net income allocated to common stockholders	$	4,518	$	6,421
Weighted average common shares outstanding including unvested share-based payment awards		6,505,710		6,623,970
Less: Unvested share-based payment awards-2019 Plan		(87,829)		(86,219)
Average shares		6,417,881		6,537,751
Basic earnings per common share	$	0.70	$	0.98
Diluted
Net earnings allocated to common stockholders	$	4,518	$	6,421
Add back: Preferred Dividends on Series B preferred stock and accretion of discount		-		-
Net earnings allocated to common stockholders	$	4,518	$	6,421
Weighted average common shares outstanding for basic earnings per common share		6,417,881		6,537,751
Add: Dilutive effects of assumed exercises of stock options		42,670		46,621
Add: Dilutive effects of unvested share-based payment awards-2019 Plan		87,829		86,219
Average shares and dilutive potential common shares		6,548,380		6,670,591
Diluted earnings per common share	$	0.69	$	0.96

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Securities (Tables)

3 Months Ended

Mar. 31, 2022

Securities [Abstract]

Amortized Cost And Fair Value Of Available-For-Sale Securities Portfolio

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2022 (unaudited)
Corporate debt	$	9,977	$	-	$	1,477	$	8,500
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		4,542		3		71		4,474
Mortgage-backed securities - residential		29		1		-		30
Total	$	14,548	$	4	$	1,548	$	13,004

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2021
Corporate debt	$	9,976	$	-	$	226	$	9,750
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		6,551	$	31	$	21	$	6,561
Mortgage-backed securities - residential		35		1		-		36
Total	$	16,562	$	32	$	247	$	16,347

Securities Classified By Maturity Date

	March 31, 2022					December 31, 2021
	(unaudited)
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	2,004	$	2,005	$	3,504	$	3,518
Due from one to five years		2,539		2,469		3,047		3,043
Due from five to ten years		9,976		8,500		9,976		9,750
Mortgage-backed securities - residential		29		30		35		36
Total	$	14,548	$	13,004	$	16,562	$	16,347

Fair Value Of Securities Pledged

	March 31, 2022		December 31, 2021
	(unaudited)
Pledged as collateral for:
FHLB advances	$	987	$	1,016
Public deposits		493		501
Mortgage banking derivatives		-		1,504
Total	$	1,480	$	3,021

Securities With Unrealized Losses

March 31, 2022 (unaudited)	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Corporate debt	$	8,500	$	1,477	$	-	$	-	$	8,500	$	1,477
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		1,496		8		1,474		63		2,970		71
Total temporarily impaired	$	9,996	$	1,485	$	1,474	$	63	$	11,470	$	1,548

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Loans And Leases (Tables)

3 Months Ended

Mar. 31, 2022

Loans And Leases [Abstract]

Recorded Investment In Loans By Portfolio Segment

	March 31, 2022		December 31, 2021
	(unaudited)
Commercial (1)	$	362,964	$	336,881
Real estate:
Single-family residential		376,475		346,797
Multi-family residential		74,064		76,785
Commercial		361,861		359,562
Construction		95,161		83,360
Consumer:
Home equity lines of credit		24,398		24,228
Other		1,913		2,044
Subtotal		1,296,836		1,229,657
Less: ALLL		(15,520)		(15,508)
Loans and leases, net	$	1,281,316	$	1,214,149

⁽¹⁾Includes $21,765 and $23,157 of commercial leases at March 31, 2022 and December 31, 2021, respectively.

Activity In ALLL By Portfolio Segment

The following tables present the activity in the ALLL by portfolio segment for the three months ended March 31, 2022:

	Three months ended March 31, 2022 (unaudited)
			Real Estate								Consumer
	Commercial		Single-family		Multi-family		Commercial		Construction		Home Equity lines of credit		Other		Total
Beginning balance	$	4,127	$	3,348	$	827	$	5,034	$	1,744	$	272	$	156	$	15,508
Addition to (reduction in) provision for loan losses		300		150		(40)		(400)		-		-		(10)		-
Charge-offs		-		-		-		-		-		-		-		-
Recoveries		-		8		-		-		-		4		-		12
Ending balance	$	4,427	$	3,506	$	787	$	4,634	$	1,744	$	276	$	146	$	15,520

The following table presents the activity in the ALLL by portfolio segment for the three months ended March 31, 2021:

	Three months ended March 31, 2021 (unaudited)
			Real Estate								Consumer
	Commercial		Single-family		Multi-family		Commercial		Construction		Home Equity lines of credit		Other		Total
Beginning balance	$	3,426	$	1,299	$	467	$	9,184	$	2,254	$	276	$	116	$	17,022
Addition to (reduction in) provision for loan losses		(55)		525		10		(500)		(25)		-		45		-
Charge-offs		-		-		-		-		-		-		-		-
Recoveries		56		3		-		-		-		5		-		64
Ending balance	$	3,427	$	1,827	$	477	$	8,684	$	2,229	$	281	$	161	$	17,086

Balance In ALLL And Recorded Investment In Loans By Portfolio Segment And Based On Impairment Method

The following table presents the balance in the ALLL and the recorded investment in loans and leases by portfolio segment and based on the impairment method as of March 31, 2022 (unaudited):

			Real Estate								Consumer
	Commercial		Single- ‎family		Multi- ‎family		Commercial		Construction		Home Equity ‎lines of credit		Other		Total
ALLL:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	6	$	-	$	-	$	-	$	6
Collectively evaluated for impairment		4,427		3,506		787		4,628		1,744		276		146		15,514
Total ending allowance balance	$	4,427	$	3,506	$	787	$	4,634	$	1,744	$	276	$	146	$	15,520
Loans:
Individually evaluated for impairment	$	139	$	98	$	-	$	777	$	-	$	-	$	-	$	1,014
Collectively evaluated for impairment		362,825		376,377		74,064		361,084		95,161		24,398		1,913		1,295,822
Total ending loan balance	$	362,964	$	376,475	$	74,064	$	361,861	$	95,161	$	24,398	$	1,913	$	1,296,836

The following table presents the balance in the ALLL and the recorded investment in loans and leases by portfolio segment and based on the impairment method as of December 31, 2021:

			Real Estate								Consumer
	Commercial		Single- ‎family		Multi- ‎family		Commercial		Construction		Home Equity ‎lines of credit		Other		Total
ALLL:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	20	$	-	$	-	$	-	$	20
Collectively evaluated for impairment		4,127		3,348		827		5,014		1,744		272		156		15,488
Total ending allowance balance	$	4,127	$	3,348	$	827	$	5,034	$	1,744	$	272	$	156	$	15,508
Loans:
Individually evaluated for impairment	$	221	$	99	$	-	$	2,658	$	-	$	-	$	-	$	2,978
Collectively evaluated for impairment		336,660		346,698		76,785		356,904		83,360		24,228		2,044		1,226,679
Total ending loan balance	$	336,881	$	346,797	$	76,785	$	359,562	$	83,360	$	24,228	$	2,044	$	1,229,657

Individually Evaluated For Impairment By Class Of Loans

The following table presents loans individually evaluated for impairment by class of loans as of and for the period ended March 31, 2022. The unpaid principal balance is the contractual principal balance outstanding. The recorded investment is the unpaid principal balance adjusted for partial charge-offs, purchase premiums and discounts, and deferred loan fees and costs. The table presents accrual basis interest income recognized during the three months ended March 31, 2022. Cash payments of interest on these loans during the three months ended March 31, 2022 totaled $30.

							Three months ended
	As of March 31, 2022						March 31, 2022
	(unaudited)						(unaudited)
	Unpaid Principal Balance		Recorded Investment		ALLL Allocated		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Real estate:
Commercial:
Owner occupied	$	-	$	-	$	-	$	-	$	-
Total with no allowance recorded		-		-		-		-		-
With an allowance recorded:
Commercial (1)		403		139		-		165		1
Real estate:
Single-family residential (1)		96		98		-		99		1
Commercial:
Non-owner occupied		777		777		6		1,399		17
Total with an allowance recorded		1,276		1,014		6		1,663		19
Total	$	1,276	$	1,014	$	6	$	1,663	$	19

⁽¹⁾Allowance recorded in an amount less than $1 has been rounded down to zero.

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2021. The unpaid principal balance is the contractual principal balance outstanding. The recorded investment is the unpaid principal balance adjusted for partial charge-offs, purchase premiums and discounts, and deferred loan fees and costs. The table presents accrual basis interest income recognized during the three months ended March 31, 2021. Cash payments of interest during the three months ended March 31, 2021 totaled $41.

							Three months ended
	As of December 31, 2021						March 31, 2021
							(unaudited)
	Unpaid Principal Balance		Recorded Investment		ALLL Allocated		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial:
Owner occupied	$	-	$	-	$	-	$	-	$	-
Total with no allowance recorded		-		-		-		-		-
With an allowance recorded:
Commercial (1)		485		221		-		78		2
Real estate:
Single-family residential (1)		99		99		-		103		1
Commercial:
Non-owner occupied		2,658		2,658		20		2,711		38
Total with an allowance recorded		3,242		2,978		20		2,892		41
Total	$	3,242	$	2,978	$	20	$	2,892	$	41

Recorded Investment In Nonaccrual Loans By Class Of Loans

	March 31, 2022		December 31, 2021
	(unaudited)
Loans past due over 90 days still on accrual	$	-	$	-
Nonaccrual loans:
Commercial		139		147
Real estate:
Single-family residential		653		656
Consumer:
Home equity lines of credit:
Originated for portfolio		153		153
Purchased for portfolio		61		41
Total nonaccrual		1,006		997
Total nonaccrual and nonperforming loans	$	1,006	$	997

Aging Of Recorded Investment In Past Due Loans By Class Of Loans

The following table presents the aging of the recorded investment in past due loans and leases by class of loans as of March 31, 2022 (unaudited):

	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Nonaccrual Loans Not > 90 days Past Due
Commercial	$	-	$	-	$	-	$	-	$	362,964	$	139
Real estate:
Single-family residential		169		-		563		732		375,743		90
Multi-family residential		-		-		-		-		74,064		-
Commercial:
Non-owner occupied		-		-		-		-		181,662		-
Owner occupied		-		-		-		-		135,601		-
Land		-		-		-		-		44,598		-
Construction		-		-		-		-		95,161		-
Consumer:
Home equity lines of credit:
Originated for portfolio		-		-		153		153		24,082		-
Purchased for portfolio		-		-		61		61		102		-
Other		-		-		-		-		1,913		-
Total	$	169	$	-	$	777	$	946	$	1,295,890	$	229

The following table presents the aging of the recorded investment in past due loans and leases by class of loans as of December 31, 2021:

	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Nonaccrual Loans Not > 90 days Past Due
Commercial	$	-	$	-	$	-	$	-	$	336,881	$	147
Real estate:
Single-family residential		2,144		652		563		3,359		343,438		93
Multi-family residential		-		-		-		-		76,785		-
Commercial:
Non-owner occupied		-		-		-		-		185,130		-
Owner occupied		-		-		-		-		134,352		-
Land		-		-		-		-		40,080		-
Construction		-		-		-		-		83,360		-
Consumer:
Home equity lines of credit:
Originated for portfolio		2		-		153		155		23,909		-
Purchased for portfolio		-		-		41		41		123		-
Other		-		-		-		-		2,044		-
Total	$	2,146	$	652	$	757	$	3,555	$	1,226,102	$	240

Nonaccrual Loans As Troubled Debt Restructuring

	March 31, 2022		December 31, 2021
	(unaudited)
Commercial	$	139	$	147
Total	$	139	$	147

Recorded Investment In Loans By Risk Category And Class Of Loans

The recorded investment in loans and leases by risk category and by class of loans and leases as of March 31, 2022 and based on the most recent analysis performed follows.

(unaudited)	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	227	$	362,598	$	-	$	-	$	139	$	362,964
Real estate:
Single-family residential		375,822		-		-		653		-		376,475
Multi-family residential		-		74,064		-		-		-		74,064
Commercial:
Non-owner occupied		-		180,886		-		776		-		181,662
Owner occupied		-		133,776		1,825		-		-		135,601
Land		-		44,598		-		-		-		44,598
Construction		702		93,928		531		-		-		95,161
Consumer:
Home equity lines of credit:
Originated for portfolio		24,082		-		-		153		-		24,235
Purchased for portfolio		102		-		-		61		-		163
Other		1,913		-		-		-		-		1,913
	$	402,848	$	889,850	$	2,356	$	1,643	$	139	$	1,296,836

The recorded investment in loans and leases by risk category and by class of loans and leases as of December 31, 2021 follows.

	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	-	$	336,660	$	-	$	74	$	147	$	336,881
Real estate:
Single-family residential		346,141		-		-		656		-		346,797
Multi-family residential		-		76,785		-		-		-		76,785
Commercial:
Non-owner occupied		-		182,472		-		2,658		-		185,130
Owner occupied		-		132,470		1,882		-		-		134,352
Land		-		40,080		-		-		-		40,080
Construction		-		82,825		535		-		-		83,360
Consumer:
Home equity lines of credit:
Originated for portfolio		23,911		-		-		153		-		24,064
Purchased for portfolio		123		-		-		41		-		164
Other		2,044		-		-		-		-		2,044
	$	372,219	$	851,292	$	2,417	$	3,582	$	147	$	1,229,657

Components Of Net Investment In Direct Financing Leases

	March 31, 2022		December 31, 2021
	(unaudited)
Total minimum lease payments to be received	$	23,817	$	25,488
Less: unearned income		(2,100)		(2,385)
Plus: Indirect initial costs		48		54
Net investment in direct financing leases	$	21,765	$	23,157

Summary Of Future Minimum Lease Payments Receivable

2022, excluding the three months ended March 31, 2022	$	4,789
2023		6,137
2024		5,732
2025		4,795
2026		2,087
Thereafter		277
Total future minimum payments	$	23,817

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Leases (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Future Minimum Operating Lease Payments

2022, excluding the three months ended March 31, 2022	$	522
2023		553
2024		458
2025		209
2026		114
Thereafter		275
Total future minimum rental commitments		2,131
Less - amounts representing interest		(242)
Total operating lease liabilities	$	1,889

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value [Abstract]

Assets And Liabilities Measured At Fair Value On A Recurring Basis, Including Financial Assets And Liabilities

	Fair Value Measurements at ‎ March 31, 2022 using Significant ‎Other Observable Inputs
	(Level 2)
	(unaudited)
Financial Assets:
Securities available for sale:
Corporate debt	$	8,500
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		4,474
Mortgage-backed securities - residential		30
Total securities available for sale	$	13,004
Loans held for sale	$	8,470
Derivative assets	$	1,809
TBA Mortgage-back securities	$	71
Financial Liabilities:
Derivative liabilities	$	1,809
Interest rate lock commitments	$	42

	Fair Value Measurements at ‎ December 31, 2021 using Significant ‎Other Observable Inputs
	(Level 2)
Financial Assets:
Securities available for sale:
Corporate debt	$	9,750
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		6,561
Mortgage-backed securities - residential		36
Total securities available for sale	$	16,347
Loans held for sale	$	27,988
Derivative assets	$	538
Interest rate lock commitments	$	555
Financial Liabilities:
Derivative liabilities		538
TBA Mortgage-backed securities	$	73

Aggregate Fair Value, Contractual Balance And Gain Or Loss

	March 31, 2022		December 31, 2021
	(unaudited)
Aggregate fair value	$	8,470	$	27,988
Contractual balance		8,562		27,632
Gain (loss)	$	(92)	$	356

Total Amount Of Gains And Losses From Changes In Fair Value Included In Earnings

	Three months ended March 31,
	2022		2021
	(unaudited)
Interest income	$	172	$	2,220
Interest expense		-		-
Change in fair value		(448)		(6,937)
Total change in fair value	$	(276)	$	(4,717)

Carrying Amounts And Estimated Fair Values Of Financial Instruments

The carrying amounts and estimated fair values of financial instruments at March 31, 2022 were as follows:

	Fair Value Measurements at March 31, 2022 Using:
	Carrying
(unaudited)	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	168,290	$	168,290	$	-	$	-	$	168,290
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		13,004		-		13,004		-		13,004
Equity Securities		5,000		-		5,000		-		5,000
Loans held for sale		8,470		-		8,470		-		8,470
Loans and leases, net		1,281,316		-		-		1,287,102		1,287,102
FHLB and FRB stock		7,326		n/a		n/a		n/a		n/a
Accrued interest receivable		4,966		3		116		4,847		4,966
Derivative assets		1,809		-		1,809		-		1,809
TBA mortgage-back securities		71		-		71		-		71
Financial liabilities
Deposits	$	(1,298,786)	$	(700,624)	$	(590,838)	$	-	$	(1,291,462)
FHLB advances and other borrowings		(83,235)		-		(81,242)		-		(81,242)
Advances by borrowers for taxes and insurance		(2,078)		-		-		(2,078)		(2,078)
Subordinated debentures		(14,893)		-		(15,315)		-		(15,315)
Accrued interest payable		(688)		-		(688)		-		(688)
Derivative liabilities		(1,809)		-		(1,809)		-		(1,809)
Interest rate lock commitments		(42)		-		(42)		-		(42)

The carrying amounts and estimated fair values of financial instruments at December 31, 2021 were as follows:

	Fair Value Measurements at December 31, 2021 Using:
	Carrying
	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	166,591	$	166,591	$	-	$	-	$	166,591
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		16,347		-		16,347		-		16,347
Equity Securities		5,000		-		5,000		-		5,000
Loans held for sale		27,988		-		27,988		-		27,988
Loans and leases, net		1,214,149		-		-		1,231,228		1,231,228
FHLB and FRB stock		7,315		n/a		n/a		n/a		n/a
Accrued interest receivable		4,143		2		91		3,947		4,040
Derivative assets		538		-		538		-		538
Interest rate lock commitments		555		-		555		-		555
Financial liabilities
Deposits	$	(1,246,352)	$	(661,818)	$	(585,214)	$	-	$	(1,247,032)
FHLB advances and other borrowings		(89,727)		-		(90,670)		-		(90,670)
Advances by borrowers for taxes and insurance		(2,752)		-		-		(2,752)		(2,752)
Subordinated debentures		(14,883)		-		(16,051)		-		(16,051)
Accrued interest payable		(228)		-		(228)		-		(228)
Derivative liabilities		(538)		-		(538)		-		(538)
TBA mortgage-backed securities		(73)		-		(73)		-		(73)

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FHLB Advances And Other Debt (Tables)

3 Months Ended

Mar. 31, 2022

FHLB Advances And Other Debt [Abstract]

Schedule Of FHLB Advances And Other Debt

	Weighted
	Average Rate	March 31, 2022		December 31, 2021
		(unaudited)
FHLB fixed rate advances:
Maturities:
2022	0.89%	$	3,500	$	10,000
2023	0.92%		3,500		3,500
2024	1.46%		18,500		18,500
2026	1.45%		16,000		16,000
Thereafter	1.69%		17,000		17,000
Total FHLB fixed rate advances			58,500		65,000
Fixed rate other debt:
FRB PPPLF advances	0.35%		450		450
Variable rate other debt:
Holding Company credit facility	3.85%		24,285		24,277
Total		$	83,235	$	89,727

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Stock-Based Compensation [Abstract]

Summary Of Stock Option Activity

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Intrinsic Value
Outstanding at beginning of year	63,992	$	7.43
Exercised	-		-
Expired	-		-
Cancelled or forfeited	-		-
Outstanding at end of period	63,992	$	7.43	1.3	$	952
Exercisable at end of period	63,992	$	7.43	1.3	$	952

Summary Of Changes In Company's Nonvested Restricted Shares

Nonvested Shares	Shares	Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2022	89,895	$	16.32
Granted	34,000		21.72
Vested	(25,312)		17.04
Forfeited	(366)		18.96
Nonvested at March 31, 2022	98,217	$	17.99

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Regulatory Capital Matters (Tables)

3 Months Ended

Mar. 31, 2022

Regulatory Capital Matters [Abstract]

Actual And Required Capital Amounts And Ratios Of CFBank

	Actual			Minimum Capital Required-Basel III Fully Phased-In			To Be Well Capitalized Under Applicable ‎Regulatory Capital Standards
	Amount		Ratio	Amount		Ratio	Amount		Ratio
March 31, 2022 (unaudited)
Total Capital to risk weighted assets	$	175,997	14.01%	$	131,940	10.50%	$	125,657	10.00%
Tier 1 (Core) Capital to risk weighted assets		160,288	12.76%		106,808	8.50%		100,526	8.00%
Common equity tier 1 capital to risk-weighted assets		160,288	12.76%		87,960	7.00%		81,677	6.50%
Tier 1 (Core) Capital to adjusted total assets (Leverage ratio)		160,288	11.06%		57,959	4.00%		72,449	5.00%

	Actual			Minimum Capital Required-Basel III Fully Phased-In			To Be Well Capitalized Under Applicable ‎Regulatory Capital Standards
	Amount		Ratio	Amount		Ratio	Amount		Ratio
December 31, 2021
Total Capital to risk weighted assets	$	170,392	14.02%	$	127,588	10.50%	$	121,512	10.00%
Tier 1 (Core) Capital to risk weighted assets		155,195	12.77%		103,286	8.50%		97,210	8.00%
Common equity tier 1 capital to risk-weighted assets		155,195	12.77%		85,059	7.00%		78,983	6.50%
Tier 1 (Core) Capital to adjusted total assets (Leverage ratio)		155,195	11.29%		54,984	4.00%		68,730	5.00%

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Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Derivative Instruments [Abstract]

Summary Of Derivative Instruments

	March 31, 2022		December 31, 2021
	(unaudited)
Notional amount	$	37,348	$	44,887
Weighted average pay rate on interest-rate swaps		4.21%		4.21%
Weighted average receive rate on interest-rate swaps		3.14%		3.00%
Weighted average maturity (years)		6.8		6.9
Fair value of derivative asset	$	1,809	$	538
Fair value of yield derivative liability		(1,809)		(538)

Schedule Of Mortgage Banking Derivatives

	March 31, 2022				December 31, 2021
	(unaudited)
	Notional Amount		Fair Value		Notional Amount		Fair Value
Assets (Liabilities):
Interest rate commitments	$	5,777	$	(42)	$	50,312	$	555
TBA mortgage-back securities		3,500		71		53,250		(73)

Schedule Of Notional Amount Of Loans Sold

	Three Months ended
	March 31,
	2022		2021
Notional amount of loans sold	$	85,180	$	756,886

Schedule Of Revenue Recognized On Mortgage Activities

	Three Months ended
	March 31,
	2022		2021
Gain on loans sold		61		11,916
Gain (loss) from change in fair value of loans held-for-sale		(448)		(6,937)
Gain (loss) from change in fair value of derivatives		944		1,381
	$	557	$	6,360

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2022

Income Taxes [Abstract]

Effective Tax Rates Differ From Federal Statutory Rate

	For the three months ended ‎ March 31,
	2022	2021
	(unaudited)
Statutory tax rate	21.0%	21.0%
Increase (decrease) resulting from:
Restricted stock	(0.9%)	(0.6%)
Tax exempt earnings on bank owned life insurance	(0.6%)	(0.2%)
Gain on redemption of life insurance policies	0.0%	(1.0%)
Dividends on equity securities	(0.2%)	(0.2%)
Low income housing credits	(0.8%)	(0.5%)
Effective tax rate	18.5%	18.5%

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2022

Accumulated Other Comprehensive Income (Loss) [Abstract]

Schedule Of Accumulated Other Comprehensive Income

Changes in Accumulated Other Comprehensive Income (Loss) by Component (1)
	Three months ended
	March 31,
	2022		2021
	(unaudited)
	Unrealized Gains and Losses on Available-for-Sale Securities
Accumulated other comprehensive income (loss), beginning of period	$	(170)	$	96
Other comprehensive loss before reclassifications (2)		(1,050)		(29)
Net current-period other comprehensive loss		(1,050)		(29)
Accumulated other comprehensive income (loss), end of period	$	(1,220)	$	67

⁽¹⁾All amounts are net of tax. Amounts in parentheses indicate a reduction of other comprehensive income.

⁽²⁾There were no amounts reclassified out of other comprehensive income for the three months ended March 31, 2022 and 2021.

 

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Summary Of Significant Accounting Policies (Earnings Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Basic
Net income	$ 4,518	$ 6,421
Net income attributable to common stockholders	$ 4,518	$ 6,421
Weighted average common shares outstanding including unvested share-based payment awards	6,505,710	6,623,970
Less: Unvested share-based payment awards-2019 Plan	(87,829)	(86,219)
Average shares	6,417,881	6,537,751
Basic earnings per common share	$ 0.70	$ 0.98
Diluted
Net earnings allocated to common stockholders	$ 4,518	$ 6,421
Weighted average common shares outstanding for basic earnings per common share	6,417,881	6,537,751
Add: Dilutive effects of assumed exercises of stock options	42,670	46,621
Add: Dilutive effects of unvested share-based payment awards-2019 Plan	87,829	86,219
Average shares and dilutive potential common shares	6,548,380	6,670,591
Diluted earnings per common share	$ 0.69	$ 0.96

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Securities (Narrative) (Details)	3 Months Ended
	Mar. 31, 2022 USD ($) security	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) security
Securities [Abstract]
Other-than-temporary impairment	$ 0	$ 0
Sales of securities	$ 0	$ 0
Holdings of securities greater than 10% of stockholders' equity | security	0		0
Minimum percentage of securities held	10.00%		10.00%
Unrealized loss	$ 1,548,000		$ 247,000

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Securities (Amortized Cost And Fair Value Of Available-For-Sale Securities Portfolio) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 14,548	$ 16,562
Gross Unrealized Gains	4	32
Gross Unrealized Losses	1,548	247
Fair Value	13,004	16,347
Corporate Debt [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	9,977	9,976
Gross Unrealized Gains
Gross Unrealized Losses	1,477	226
Fair Value	8,500	9,750
U.S. Treasury [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	4,542	6,551
Gross Unrealized Gains	3	31
Gross Unrealized Losses	71	21
Fair Value	4,474	6,561
Mortgage-Backed Securities - Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	29	35
Gross Unrealized Gains	1	1
Gross Unrealized Losses
Fair Value	$ 30	$ 36

XML

Securities (Securities Classified By Maturity Date) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Schedule Of Available For Sale Securities [Line Items]
Due in one year or less, Amortized Cost	$ 2,004	$ 3,504
Due from one to five years, Amortized Cost	2,539	3,047
Due from five to ten years, Amortized Cost	9,976	9,976
Amortized Cost	14,548	16,562
Due in one year or less, Fair Value	2,005	3,518
Due from one to five years, Fair Value	2,469	3,043
Due from five to ten years, Fair Value	8,500	9,750
Fair Value	13,004	16,347
Mortgage-Backed Securities - Residential [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	29	35
Fair Value	$ 30	$ 36

XML

Securities (Fair Value Of Securities Pledged) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Pledged as collateral for:
FHLB advances	$ 987	$ 1,016
Public deposits	493	501
Mortgage banking derivatives		1,504
Total	$ 1,480	$ 3,021

XML

Securities (Securities With Unrealized Losses) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months, Fair Value	$ 9,996	$ 12,774
Less than 12 Months, Unrealized Loss	1,485	247
12 Months or More, Fair Value	1,474
12 Months or More, Unrealized Loss	63
Total, Fair Value	11,470	12,774
Total, Unrealized Loss	1,548	247
Corporate Debt [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months, Fair Value	8,500	9,750
Less than 12 Months, Unrealized Loss	1,477	226
12 Months or More, Fair Value
12 Months or More, Unrealized Loss
Total, Fair Value	8,500	9,750
Total, Unrealized Loss	1,477	226
U.S. Treasury [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months, Fair Value	1,496	3,024
Less than 12 Months, Unrealized Loss	8	21
12 Months or More, Fair Value	1,474
12 Months or More, Unrealized Loss	63
Total, Fair Value	2,970	3,024
Total, Unrealized Loss	$ 71	$ 21

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Loans And Leases (Narrative) (Details)	3 Months Ended
	Mar. 31, 2022 USD ($) loan	Mar. 31, 2021 USD ($) loan	Dec. 31, 2021 USD ($)
Accounts Notes And Loans Receivable [Line Items]
Loans	$ 1,281,316,000		$ 1,214,149,000
Loans 90 days or more past due and still accruing interest
Total TDR's	1,014,000		2,978,000
Allocated specific reserves to modified TDRs	$ 6,000		20,000
Number of loans modified as a TDR | loan	0	0
Number of TDRs in payment default | loan	0	0
Cash payments of interest	$ 30,000	$ 41,000
Loans	1,296,836,000		1,229,657,000
Deferral loans outstanding balance	$ 0
Northpointe [Member] | Mortgage Purchase Program [Member]
Accounts Notes And Loans Receivable [Line Items]
Average days	14 days
Percent of loans risk rated for capital adequacy	100.00%
Percent of participation agreement interest	95.00%
Ownership interest in each loan is participates	5.00%
Allowance allocated loans	$ 0
Single-Family Residential [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans	376,475,000		346,797,000
Commercial [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans	362,964,000		336,881,000
Accruing [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR's	875,000		2,831,000
Commercial Loans - Paycheck Protection Program [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans	$ 387,000		$ 445,000
Maturity term	2 years
Stated interest rate	1.00%

XML

Loans And Leases (Recorded Investment In Loans By Portfolio Segment) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Accounts Notes And Loans Receivable [Line Items]
Subtotal	$ 1,296,836	$ 1,229,657
Less: ALLL	(15,520)	(15,508)	$ (17,086)	$ (17,022)
Loans and leases, net	1,281,316	1,214,149
Commercial [Member]
Accounts Notes And Loans Receivable [Line Items]
Subtotal	362,964	336,881
Less: ALLL	(4,427)	(4,127)	(3,427)	(3,426)
Single-Family Residential [Member]
Accounts Notes And Loans Receivable [Line Items]
Subtotal	376,475	346,797
Less: ALLL	(3,506)	(3,348)	(1,827)	(1,299)
Multi-Family Residential [Member]
Accounts Notes And Loans Receivable [Line Items]
Subtotal	74,064	76,785
Less: ALLL	(787)	(827)	(477)	(467)
Commercial Real Estate [Member]
Accounts Notes And Loans Receivable [Line Items]
Subtotal	361,861	359,562
Less: ALLL	(4,634)	(5,034)	(8,684)	(9,184)
Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
Subtotal	95,161	83,360
Less: ALLL	(1,744)	(1,744)	(2,229)	(2,254)
Home Equity Lines Of Credit [Member]
Accounts Notes And Loans Receivable [Line Items]
Subtotal	24,398	24,228
Less: ALLL	(276)	(272)	(281)	(276)
Other [Member]
Accounts Notes And Loans Receivable [Line Items]
Subtotal	1,913	2,044
Less: ALLL	(146)	(156)	$ (161)	$ (116)
Commercial Leases [Member]
Accounts Notes And Loans Receivable [Line Items]
Subtotal	$ 21,765	$ 23,157

XML

Loans And Leases (Activity In ALLL By Portfolio Segment) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	$ 15,508	$ 17,022
Addition to (reduction in) provision for loan losses
Charge-offs
Recoveries	12	64
Ending balance	15,520	17,086
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	4,127	3,426
Addition to (reduction in) provision for loan losses	300	(55)
Charge-offs
Recoveries		56
Ending balance	4,427	3,427
Single-Family Residential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	3,348	1,299
Addition to (reduction in) provision for loan losses	150	525
Charge-offs
Recoveries	8	3
Ending balance	3,506	1,827
Multi-Family Residential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	827	467
Addition to (reduction in) provision for loan losses	(40)	10
Charge-offs
Recoveries
Ending balance	787	477
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	5,034	9,184
Addition to (reduction in) provision for loan losses	(400)	(500)
Charge-offs
Recoveries
Ending balance	4,634	8,684
Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	1,744	2,254
Addition to (reduction in) provision for loan losses		(25)
Charge-offs
Recoveries
Ending balance	1,744	2,229
Home Equity Lines Of Credit [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	272	276
Addition to (reduction in) provision for loan losses
Charge-offs
Recoveries	4	5
Ending balance	276	281
Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	156	116
Addition to (reduction in) provision for loan losses	(10)	45
Charge-offs
Recoveries
Ending balance	$ 146	$ 161

XML

Loans And Leases (Balance In ALLL And Recorded Investment In Loans By Portfolio Segment And Based On Impairment Method) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	$ 6	$ 20
Collectively evaluated for impairment	15,514	15,488
Total ending allowance balance	15,520	15,508	$ 17,086	$ 17,022
Individually evaluated for impairment	1,014	2,978
Collectively evaluated for impairment	1,295,822	1,226,679
Total ending loan balance	1,296,836	1,229,657
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Collectively evaluated for impairment	4,427	4,127
Total ending allowance balance	4,427	4,127	3,427	3,426
Individually evaluated for impairment	139	221
Collectively evaluated for impairment	362,825	336,660
Total ending loan balance	362,964	336,881
Single-Family Residential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Collectively evaluated for impairment	3,506	3,348
Total ending allowance balance	3,506	3,348	1,827	1,299
Individually evaluated for impairment	98	99
Collectively evaluated for impairment	376,377	346,698
Total ending loan balance	376,475	346,797
Multi-Family Residential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Collectively evaluated for impairment	787	827
Total ending allowance balance	787	827	477	467
Collectively evaluated for impairment	74,064	76,785
Total ending loan balance	74,064	76,785
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	6	20
Collectively evaluated for impairment	4,628	5,014
Total ending allowance balance	4,634	5,034	8,684	9,184
Individually evaluated for impairment	777	2,658
Collectively evaluated for impairment	361,084	356,904
Total ending loan balance	361,861	359,562
Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Collectively evaluated for impairment	1,744	1,744
Total ending allowance balance	1,744	1,744	2,229	2,254
Collectively evaluated for impairment	95,161	83,360
Total ending loan balance	95,161	83,360
Home Equity Lines Of Credit [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Collectively evaluated for impairment	276	272
Total ending allowance balance	276	272	281	276
Collectively evaluated for impairment	24,398	24,228
Total ending loan balance	24,398	24,228
Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Collectively evaluated for impairment	146	156
Total ending allowance balance	146	156	$ 161	$ 116
Collectively evaluated for impairment	1,913	2,044
Total ending loan balance	$ 1,913	$ 2,044

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Loans And Leases (Individually Evaluated For Impairment By Class Of Loans) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance	$ 1,276		$ 3,242
Impaired Financing Receivable, Unpaid Principal Balance, Total	1,276		3,242
Impaired Financing Receivable, with Related Allowance, Recorded Investment	1,014		2,978
Impaired Financing Receivable, Recorded Investment, Total	1,014		2,978
Impaired Financing Receivable, ALLL Allocated	6		20
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	1,663	$ 2,892
Impaired Financing Receivable, Average Recorded Investment, Total	1,663	2,892
Impaired Financing Receivable, with Related Allowance, Interest Income Recognized	19	41
Impaired Financing Receivable, Interest Income Recognized, Total	19	41
Allowance recorded	6		20
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance	403		485
Impaired Financing Receivable, with Related Allowance, Recorded Investment	139		221
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	165	78
Impaired Financing Receivable, with Related Allowance, Interest Income Recognized	1	2
Single-Family Residential [Member]
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance	96		99
Impaired Financing Receivable, with Related Allowance, Recorded Investment	98		99
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	99	103
Impaired Financing Receivable, with Related Allowance, Interest Income Recognized	1	1
Non-Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance	777		2,658
Impaired Financing Receivable, with Related Allowance, Recorded Investment	777		2,658
Impaired Financing Receivable, ALLL Allocated	6		$ 20
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	1,399	2,711
Impaired Financing Receivable, with Related Allowance, Interest Income Recognized	$ 17	$ 38

XML

Loans And Leases (Recorded Investment In Nonaccrual Loans By Class Of Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans past due over 90 days still on accrual
Total nonaccrual and nonperforming loans	139	147
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual and nonperforming loans	139	147
Single-Family Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual and nonperforming loans	653	656
Originated For Portfolio [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual and nonperforming loans	153	153
Purchased For Portfolio [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual and nonperforming loans	61	41
Nonaccrual [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual and nonperforming loans	1,006	997
Nonaccrual And Nonperforming [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual and nonperforming loans	$ 1,006	$ 997

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Loans And Leases (Aging Of Recorded Investment In Past Due Loans By Class Of Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 946	$ 3,555
Nonaccrual Loans Not > 90 Days Past Due	229	240
30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	169	2,146
60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		652
Greater Than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	777	757
Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	1,295,890	1,226,102
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual Loans Not > 90 Days Past Due	139	147
Commercial [Member] | Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	362,964	336,881
Single-Family Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	732	3,359
Nonaccrual Loans Not > 90 Days Past Due	90	93
Single-Family Residential [Member] | 30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	169	2,144
Single-Family Residential [Member] | 60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		652
Single-Family Residential [Member] | Greater Than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	563	563
Single-Family Residential [Member] | Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	375,743	343,438
Multi-Family Residential [Member] | Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	74,064	76,785
Non-Owner Occupied [Member] | Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	181,662	185,130
Owner Occupied [Member] | Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	135,601	134,352
Land [Member] | Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	44,598	40,080
Construction [Member] | Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	95,161	83,360
Originated For Portfolio [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	153	155
Originated For Portfolio [Member] | 30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		2
Originated For Portfolio [Member] | Greater Than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	153	153
Originated For Portfolio [Member] | Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	24,082	23,909
Purchased For Portfolio [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	61	41
Purchased For Portfolio [Member] | Greater Than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	61	41
Purchased For Portfolio [Member] | Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	102	123
Other [Member] | Loans Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 1,913	$ 2,044

XML

Loans And Leases (Nonaccrual Loans As Troubled Debt Restructuring) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Financing Receivable, Modifications [Line Items]
Total nonaccrual and nonperforming loans	$ 139	$ 147
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Total nonaccrual and nonperforming loans	$ 139	$ 147

XML

Loans And Leases (Recorded Investment In Loans By Risk Category And Class Of Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Financing Receivable, Recorded Investment [Line Items]
Loans	$ 1,296,836	$ 1,229,657
Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	402,848	372,219
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	889,850	851,292
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	2,356	2,417
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,643	3,582
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	139	147
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	362,964	336,881
Commercial [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	227
Commercial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	362,598	336,660
Commercial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		74
Commercial [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	139	147
Single-Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	376,475	346,797
Single-Family Residential [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	375,822	346,141
Single-Family Residential [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	653	656
Multi-Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	74,064	76,785
Multi-Family Residential [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	74,064	76,785
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	361,861	359,562
Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	181,662	185,130
Non-Owner Occupied [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	180,886	182,472
Non-Owner Occupied [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	776	2,658
Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	135,601	134,352
Owner Occupied [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	133,776	132,470
Owner Occupied [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,825	1,882
Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	44,598	40,080
Land [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	44,598	40,080
Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	95,161	83,360
Construction [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	702
Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	93,928	82,825
Construction [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	531	535
Home Equity Lines Of Credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	24,398	24,228
Originated For Portfolio [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	24,235	24,064
Originated For Portfolio [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	24,082	23,911
Originated For Portfolio [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	153	153
Purchased For Portfolio [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	163	164
Purchased For Portfolio [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	102	123
Purchased For Portfolio [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	61	41
Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,913	2,044
Other [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	$ 1,913	$ 2,044

XML

Loans And Leases (Components Of Net Investment In Direct Financing Leases) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Loans And Leases [Abstract]
Total minimum lease payments to be received	$ 23,817	$ 25,488
Less: unearned income	(2,100)	(2,385)
Plus: Indirect initial costs	48	54
Net investment in direct financing leases	$ 21,765	$ 23,157

XML

Loans And Leases (Summary Of Future Minimum Lease Payments Receivable) (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Loans And Leases [Abstract]
2022, excluding the three months ended March 31, 2022	$ 4,789
2023	6,137
2024	5,732
2025	4,795
2026	2,087
Thereafter	277
Future minimum lease payments	$ 23,817

XML

Leases (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Leases [Abstract]
Operating lease, Weighted average remaining lease term	4 years 6 months
Operating lease, Weighted average discount rate	5.59%
Operating lease costs	$ 143	$ 103
Variable lease costs	$ 84	$ 84

XML

Leases (Future Minimum Operating Lease Payments) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Leases [Abstract]
2022, excluding the three months ended March 31, 2022	$ 522
2023	553
2024	458
2025	209
2026	114
Thereafter	275
Total future minimum rental commitments	2,131
Less - amounts representing interest	(242)
Total operating lease liabilities	$ 1,889	$ 2,032

XML

Fair Value (Narrative) (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets And Liabilities Transfer Level 1 To Level 3	0	0
Fair value assets and liabilities transfer level 3 to level 1	0	0
Fair value option, 90 days or more past due	$ 0	$ 0
Write-downs of impaired collateral-dependent loans	$ 0	0
PPPLF fixed rate	0.35%
Fair Value, Measurements, Non-Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets or liabilities measured at fair value	$ 0	0
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Liabilities measured at fair value	0	0
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Liabilities measured at fair value	$ 0	$ 0

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Fair Value (Assets And Liabilities Measured At Fair Value On A Recurring Basis, Including Financial Assets And Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Financial Assets:
Securities available for sale	$ 13,004	$ 16,347
Loans held for sale	8,470	27,988
Derivative assets	1,809	538
Financial Liabilities:
Derivative liabilities	1,809	538
Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Securities available for sale	13,004	16,347
Loans held for sale	8,470	27,988
Derivative assets	1,809	538
Interest rate lock commitments		555
TBA Mortgage-back securities	71
Financial Liabilities:
Derivative liabilities	1,809	538
TBA Mortgage-backed securities		73
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Securities available for sale	13,004	16,347
Loans held for sale	8,470	27,988
Derivative assets	1,809	538
Interest rate lock commitments	42
Financial Liabilities:
Derivative liabilities	1,809	538
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | TBA Mortgage-Back Securities [Member]
Financial Liabilities:
TBA Mortgage-backed securities		73
Fair Value, Measurements, Recurring [Member] | Corporate Debt [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Securities available for sale	8,500	9,750
Fair Value, Measurements, Recurring [Member] | U.S. Treasury [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Securities available for sale	4,474	6,561
Fair Value, Measurements, Recurring [Member] | Mortgage-Backed Securities - Residential [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Securities available for sale	30	36
Fair Value, Measurements, Recurring [Member] | Interest Rate Lock Commitments [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Interest rate lock commitments		$ 555
Fair Value, Measurements, Recurring [Member] | TBA Mortgage-Back Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
TBA Mortgage-back securities	$ 71

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Fair Value (Aggregate Fair Value, Contractual Balance And Gain Or Loss) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Fair Value [Abstract]
Aggregate fair value	$ 8,470	$ 27,988
Contractual balance	8,562	27,632
Gain	$ (92)	$ 356

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Fair Value (Total Amount Of Gains And Losses From Changes In Fair Value Included In Earnings) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Fair Value [Abstract]
Interest income	$ 172	$ 2,220
Interest expense
Change in fair value	(448)	(6,937)
Total change in fair value	$ (276)	$ (4,717)

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Fair Value (Carrying Amounts And Estimated Fair Values Of Financial Instruments) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Financial assets
Securities available for sale	$ 13,004	$ 16,347
Equity securities	5,000	5,000
Loans held for sale	8,470	27,988
Derivative assets	1,809	538
Financial liabilities
FHLB advances and other borrowings	(83,235)	(89,727)
Advances by borrowers for taxes and insurance	(2,078)	(2,752)
Derivative liabilities	(1,809)	(538)
Fair Value, Inputs, Level 1 [Member]
Financial assets
Cash and cash equivalents	168,290	166,591
Interest-bearing deposits in other financial institutions	100	100
Accrued interest receivable	3	2
Financial liabilities
Deposits	(700,624)	(661,818)
Fair Value, Inputs, Level 2 [Member]
Financial assets
Securities available for sale	13,004	16,347
Equity securities	5,000	5,000
Loans held for sale	8,470	27,988
Accrued interest receivable	116	91
Derivative assets	1,809	538
Interest rate lock commitments		555
TBA Mortgage-back securities	71
Financial liabilities
Deposits	(590,838)	(585,214)
FHLB advances and other borrowings	(81,242)	(90,670)
Subordinated debentures	(15,315)	(16,051)
Accrued interest payable	(688)	(228)
Derivative liabilities	(1,809)	(538)
Interest-rate swaps	(42)
TBA mortgage-backed securities		(73)
Fair Value, Inputs, Level 3 [Member]
Financial assets
Loans and leases, net	1,287,102	1,231,228
Accrued interest receivable	4,847	3,947
Financial liabilities
Advances by borrowers for taxes and insurance	(2,078)	(2,752)
Carrying Value [Member]
Financial assets
Cash and cash equivalents	168,290	166,591
Interest-bearing deposits in other financial institutions	100	100
Securities available for sale	13,004	16,347
Equity securities	5,000	5,000
Loans held for sale	8,470	27,988
Loans and leases, net	1,281,316	1,214,149
FHLB and FRB stock	7,326	7,315
Accrued interest receivable	4,966	4,143
Derivative assets	1,809	538
Interest rate lock commitments		555
TBA Mortgage-back securities	71
Financial liabilities
Deposits	(1,298,786)	(1,246,352)
FHLB advances and other borrowings	(83,235)	(89,727)
Advances by borrowers for taxes and insurance	(2,078)	(2,752)
Subordinated debentures	(14,893)	(14,883)
Accrued interest payable	(688)	(228)
Derivative liabilities	(1,809)	(538)
Interest-rate swaps	(42)
TBA mortgage-backed securities		(73)
Fair Value [Member]
Financial assets
Cash and cash equivalents	168,290	166,591
Interest-bearing deposits in other financial institutions	100	100
Securities available for sale	13,004	16,347
Equity securities	5,000	5,000
Loans held for sale	8,470	27,988
Loans and leases, net	1,287,102	1,231,228
Accrued interest receivable	4,966	4,040
Derivative assets	1,809	538
Interest rate lock commitments		555
TBA Mortgage-back securities	71
Financial liabilities
Deposits	(1,291,462)	(1,247,032)
FHLB advances and other borrowings	(81,242)	(90,670)
Advances by borrowers for taxes and insurance	(2,078)	(2,752)
Subordinated debentures	(15,315)	(16,051)
Accrued interest payable	(688)	(228)
Derivative liabilities	(1,809)	(538)
Interest-rate swaps	$ (42)
TBA mortgage-backed securities		$ (73)

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Subordinated Debentures (Narrative) (Details) - USD ($)	1 Months Ended	3 Months Ended
	Dec. 31, 2018	Mar. 31, 2022	Dec. 31, 2021	Dec. 31, 2003
Subsidiary, Sale of Stock [Line Items]
Subordinated debentures		$ 14,893,000	$ 14,883,000	$ 5,155,000
Holding Company's investment in the common stock				$ 155,000
Private Placement [Member]
Subsidiary, Sale of Stock [Line Items]
Holding Company, closed a pooled private offering				5,000
Trust preferred securities with a liquidation amount				$ 1
Subordinated Debentures [Member]
Subsidiary, Sale of Stock [Line Items]
Required principal payments over next five years		$ 0
Number of years with no principal repayment		5 years
Subordinated Debentures [Member] | Subordinated Debentures Maturing On December 30, 2033 [Member]
Subsidiary, Sale of Stock [Line Items]
Holding Company may redeem the subordinated debentures in a principal amount with integral multiples		$ 1
Percentage in which holding company redeem subordinated debentures		100.00%
Trust preferred securities and subordinated debentures have a stated percentage		3.85%	3.07%
Subordinated Debentures [Member] | Fixed-To-Floating Rate Subordinated Notes [Member] | Private Placement [Member]
Subsidiary, Sale of Stock [Line Items]
Subordinated notes	$ 10,000,000	$ 9,738,000
Interest rate	7.00%
Debt issuance costs	$ 388,000
London Interbank Offered Rate [Member] | Subordinated Debentures [Member] | Subordinated Debentures Maturing On December 30, 2033 [Member]
Subsidiary, Sale of Stock [Line Items]
Variable rate of interest		2.85%
London Interbank Offered Rate [Member] | Subordinated Debentures [Member] | Fixed-To-Floating Rate Subordinated Notes [Member]
Subsidiary, Sale of Stock [Line Items]
Subordinated notes		$ 9,612,000
London Interbank Offered Rate [Member] | Subordinated Debentures [Member] | Fixed-To-Floating Rate Subordinated Notes [Member] | Private Placement [Member]
Subsidiary, Sale of Stock [Line Items]
Variable rate of interest	4.14%

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FHLB Advances And Other Debt (Narrative) (Details)		3 Months Ended	12 Months Ended
	May 21, 2021 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($) loan	Dec. 31, 2019 USD ($)	May 20, 2021 USD ($)
PPPLF fixed rate		0.35%
Weighted average life		1 month 6 days	2 months 12 days
Number of PPP loans processed | loan				558
Total amount of PPP loans processed				$ 126,000,000
Third-Party Bank [Member]
Line of credit, borrowing capacity						$ 10,000,000
Third-Party Bank [Member] | Term Loan [Member]
Loan						$ 5,000,000
Federal Reserve Bank Advances [Member]
Outstanding balance		$ 0
Line Of Credit [Member] | Commercial Bank One [Member]
Line of credit, borrowing capacity		50,000,000
Line Of Credit [Member] | Commercial Bank Two [Member]
Line of credit, borrowing capacity		15,000,000
Line Of Credit [Member] | Commercial Bank One And Two [Member]
Line of credit, outstanding balance		0	$ 0
Revolving Credit Facility [Member] | Third-Party Bank [Member]
Interest rate	3.85%
Outstanding balance	$ 35,000,000
Line of credit, outstanding balance		$ 24,285,000
Debt Instrument, Term		10 years
Debt Instrument, Convertible, Remaining Discount Amortization Period		10 years
Revolving Credit Facility [Member] | Third-Party Bank [Member] | Prime Rate [Member] | Interest Rate Floor [Member]
Variable rate spread	3.25%
FRB PPPLF Advances [Member]
Outstanding borrowings		$ 450,000	450,000
Warehouse Facility One [Member] | Commercial Bank [Member]
Line of credit, borrowing capacity					$ 25,000,000
Outstanding balance		0	0
Warehouse Facility One [Member] | Commercial Bank Three [Member]
Line of credit, borrowing capacity				$ 75,000,000
Line of credit, outstanding balance		$ 0	$ 0
Minimum [Member] | Warehouse Facility One [Member] | Commercial Bank [Member] | London Interbank Offered Rate [Member]
Variable rate spread					2.00%
Minimum [Member] | Warehouse Facility One [Member] | Commercial Bank Three [Member] | London Interbank Offered Rate [Member]
Variable rate spread				2.35%
Maximum [Member] | Warehouse Facility One [Member] | Commercial Bank [Member] | London Interbank Offered Rate [Member]
Variable rate spread					4.00%
Maximum [Member] | Warehouse Facility One [Member] | Commercial Bank Three [Member] | London Interbank Offered Rate [Member]
Variable rate spread				2.90%

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FHLB Advances And Other Debt (Schedule Of FHLB Advances And Other Debt) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total	$ 83,235	$ 89,727
Federal Home Loan Bank Advances [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
2022, FHLB Weighted Average Rate	0.89%
2023, FHLB Weighted Average Rate	0.92%
2024, FHLB Weighted Average Rate	1.46%
2026, FHLB Weighted Average Rate	1.45%
Thereafter, FHLB Weighted Average Rate	1.69%
2022, FHLB fixed rate advances	$ 3,500	10,000
2023, FHLB fixed rate advances	3,500	3,500
2024, FHLB fixed rate advances	18,500	18,500
2026, FHLB fixed rate advances	16,000	16,000
Thereafter, FHLB fixed rate advances	17,000	17,000
Total FHLB fixed rate advances	$ 58,500	65,000
Federal Reserve Bank Advances [Member] | FRB PPPLF Advances [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
FRB PPPLF advances, Weighted Average Rate	0.35%
FRB PPPLF advances	$ 450	450
Line Of Credit [Member] | Holding Company Credit Facility [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Variable rate other debt, Weighted Average Rate	3.85%
Total	$ 24,285	$ 24,277

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Stock-Based Compensation (Narrative) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) ShareBasedCompensationPlan shares	Mar. 31, 2021 USD ($) shares	May 29, 2019 shares	Mar. 19, 2019 shares	May 16, 2013 shares	May 21, 2009 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock-based compensation plans | ShareBasedCompensationPlan	2
Compensation cost | $	$ 180	$ 161
Total income tax (expense) benefit | $	$ 38	$ 34
Shares available to be issued					272,727
2009 Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares remaining available				0
2019 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized			300,000
Shares remaining available	150,921
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period	10 years
Shares cancelled, forfeited or expired	0	1,454
Options exercised	0	14,544
Shares granted	0	0
Stock Options [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting periods	1 year
Stock Options [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting periods	3 years
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vested	25,312	5,884
Shares granted	34,000
Unrecognized compensation cost | $	$ 1,593	$ 1,677
Shares, Forfeited	366	183
Restricted Stock [Member] | 2009 Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized						36,363
Restricted Stock [Member] | 2019 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		68,460
Restricted Stock [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting periods	1 year
Restricted Stock [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting periods	3 years

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Stock-Based Compensation (Summary Of Stock Option Activity) (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares, Outstanding at beginning of year	63,992
Shares, Exercised	0	(14,544)
Shares, Expired
Shares Cancelled or forfeited
Shares, Outstanding at end of period	63,992
Shares, Exercisable at end of period	63,992
Weighted Average Exercise Price, Outstanding at beginning of year	$ 7.43
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Expired
Weighted Average Exercise Price, Cancelled or forfeited
Weighted Average Exercise Price, Outstanding at end of period	7.43
Weighted Average Exercise Price, Exercisable at end of period	$ 7.43
Weighted Average Remaining Contractual Term (Years), Outstanding at end of period	1 year 3 months 18 days
Weighted Average Remaining Contractual Term (Years), Exercisable at end of period	1 year 3 months 18 days
Intrinsic Value, Outstanding at end of period	$ 952
Intrinsic Value, Exercisable at end of period	$ 952

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Stock-Based Compensation (Summary Of Changes In Company's Nonvested Restricted Shares) (Details) - Restricted Stock [Member] - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Shares, Nonvested at, Beginning	89,895
Shares, Granted	34,000
Shares, Vested	(25,312)	(5,884)
Shares, Forfeited	(366)	(183)
Shares, Nonvested at, Ending	98,217
Weighted Average Grant date Fair Value, Nonvested at, Beginning	$ 16.32
Weighted Average Grant date Fair Value, Granted	21.72
Weighted Average Grant date Fair Value, Vested	17.04
Weighted Average Grant date Fair Value, Forfeited	18.96
Weighted Average Grant date Fair Value, Nonvested at, Ending	$ 17.99

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Regulatory Capital Matters (Narrative) (Details) - USD ($) $ in Thousands	Jan. 01, 2019	Mar. 31, 2022
Regulatory Capital Matters [Abstract]
Future percent of common equity to risk-weighted assets	2.50%
Common Equity Tier 1 capital to risk-weighted assets, ratio	4.50%
Capital conservation buffer	2.50%
Common Equity Tier 1 capital to risk weighted assets, upon full implementation, ratio	7.00%
Tier 1 Capital To Risk Weighted Assets Ratio	6.00%
Tier 1 Capital To Risk Weighted Assets Upon Full Implementation Ratio	8.50%
Total Capital To Risk Weighted Assets Ratio	8.00%
Total Capital To Risk Weighted Assets Upon Full Implementation Ratio	10.50%
Minimum Leverage Ratio Based On Required Basel 3 Rules	4.00%
Opening balance in liquidation account		$ 14,300

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Regulatory Capital Matters (Actual And Required Capital Amounts And Ratios Of CFBank) (Details) $ in Thousands	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Regulatory Capital Matters [Abstract]
Total Capital to risk weighted assets, Actual Amount	$ 175,997	$ 170,392
Tier 1 (Core) Capital to risk weighted assets, Actual Amount	160,288	155,195
Common equity tier 1 capital to risk-weighted assets, Actual Amount	160,288	155,195
Tier 1 (Core) Capital to adjusted total assets (Leverage ratio), Actual Amount	$ 160,288	$ 155,195
Total Capital to risk weighted assets, Actual Ratio	0.1401	0.1402
Tier 1 (Core) Capital to risk weighted assets, Actual Ratio	0.1276	0.1277
Common equity tier 1 capital to risk-weighted assets, Actual Ratio	0.1276	0.1277
Tier 1 (Core) Capital to adjusted total assets, Actual Ratio	0.1106	0.1129
Total Capital to risk weighted assets, Minimum Capital Required-Basel III Fully Phased-In Amount	$ 131,940	$ 127,588
Tier 1 (Core) Capital to risk weighted assets, Minimum Capital Required-Basel III Fully Phased-In Amount	106,808	103,286
Common equity tier 1 capital to risk-weighted assets, Minimum Capital Required-Basel III Fully Phased-In Amount	87,960	85,059
Tier 1 (Core) Capital to adjusted total assets, Minimum Capital Required-Basel III Fully Phased-In Amount	$ 57,959	$ 54,984
Total Capital to risk weighted assets, Minimum Capital Required-Basel III Fully Phased-In Ratio	0.1050	0.1050
Tier 1 (Core) Capital to risk weighted assets, Minimum Capital Required-Basel III Fully Phased-In Ratio	0.0850	0.0850
Common equity tier 1 capital to risk-weighted assets, Minimum Capital Required-Basel III Fully Phased-In Ratio	0.0700	0.0700
Tier 1 (Core) Capital to adjusted total assets, Minimum Capital Required-Basel III Fully Phased-In Ratio	0.0400	0.0400
Total Capital to risk weighted assets, To Be Well Capitalized Under Applicable Regulatory Capital Standards Amount	$ 125,657	$ 121,512
Tier 1 (Core) Capital to risk weighted assets, To Be Well Capitalized Under Applicable Regulatory Capital Standards Amount	100,526	97,210
Common equity tier 1 capital to risk-weighted assets, To Be Well Capitalized Under Applicable Regulatory Capital Standards Amount	81,677	78,983
Tier 1 (Core) Capital to adjusted total assets, To Be Well Capitalized Under Applicable Regulatory Capital Standards Amount	$ 72,449	$ 68,730
Total Capital to risk weighted assets, To Be Well Capitalized Under Applicable Regulatory Capital Standards Ratio	0.1000	0.1000
Tier 1 (Core) Capital to risk weighted assets, To Be Well Capitalized Under Applicable Regulatory Capital Standards Ratio	0.0800	0.0800
Common equity tier 1 capital to risk-weighted assets, To Be Well Capitalized Under Applicable Regulatory Capital Standards Ratio	0.0650	0.0650
Tier 1 (Core) Capital to adjusted total assets, To Be Well Capitalized Under Applicable Regulatory Capital Standards Ratio	0.0500	0.0500

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Derivative Instruments (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Derivative [Line Items]
Notional amount	$ 37,348,000		$ 44,887,000
Fair value, Derivative assets	1,809,000		538,000
Fair value, Derivative liabilities	(1,809,000)		(538,000)
Interest Rate Swap [Member]
Derivative [Line Items]
Notional amount	37,348,000		44,887,000
Net gains (losses) recognized in earnings	0	$ 0
Interest Rate Lock Commitments [Member]
Derivative [Line Items]
Notional amount	5,777,000		50,312,000
Fair value, Derivative assets	$ (42,000)		555,000
Interest Rate Lock Commitments [Member] | Minimum [Member]
Derivative [Line Items]
Commitments period	30 days
Interest Rate Lock Commitments [Member] | Maximum [Member]
Derivative [Line Items]
Commitments period	60 days
TBA Mortgage-Back Securities [Member]
Derivative [Line Items]
Posted cash collateral	$ 3,847,000
Notional amount	3,500,000		53,250,000
Fair value, Derivative assets	71,000
Fair value, Derivative liabilities			$ (73,000)
CF Bank [Member]
Derivative [Line Items]
Pledged, collateral derivatives	$ 2,725,000

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Derivative Instruments (Summary Of Derivative Instruments) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	$ 37,348	$ 44,887
Weighted average maturity (years)	6 years 9 months 18 days	6 years 10 months 24 days
Fair value of derivative asset	$ 1,809	$ 538
Fair value of derivative liability	(1,809)	(538)
Interest Rate Swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	$ 37,348	$ 44,887
Weighted average pay rate on interest-rate swaps	4.21%	4.21%
Weighted average receive rate on interest-rate swaps	3.14%	3.00%

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Derivative Instruments (Schedule Of Mortgage Banking Derivatives) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Derivatives, Fair Value [Line Items]
Fair value, Derivative assets	$ 1,809	$ 538
Fair value, Derivative liabilities	(1,809)	(538)
Interest Rate Commitments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount, Assets	5,777	50,312
Fair value, Derivative assets	(42)	555
TBA Mortgage-Back Securities [Member]
Derivatives, Fair Value [Line Items]
Notional Amount, Assets	3,500	53,250
Fair value, Derivative assets	$ 71
Fair value, Derivative liabilities		$ (73)

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Derivative Instruments (Schedule Of Notional Amount Of Loans Sold) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Derivative Instruments [Abstract]
Notional amount of loans sold	$ 85,180	$ 756,886

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Derivative Instruments (Schedule Of Revenue Recognized On Mortgage Activities) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Derivative Instruments [Abstract]
Gain on loans sold	$ 61	$ 11,916
Gain (loss) from change in fair value of loans held-for-sale	(448)	(6,937)
Gain (loss) from change in fair value of derivatives	944	1,381
Revenue recognized on mortgage activities	$ 557	$ 6,360

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Income Taxes (Narrative) (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2012	Dec. 31, 2021
Income Taxes [Abstract]
Proceeds from sale of common stock			$ 22,500,000
Net operating loss carry forwards	$ 22,253,000
Carryforwards utilize limit before the stock offering closed	163,000
Unutilized operating loss carryforwards that will expire	20,520,000
Reduced deferred tax assets and valuation allowance	$ 6,977,000
Deferred tax liability to be recorded				$ 473,000
Effective tax rate	18.50%	18.50%
Additional bad debt deductions	$ 2,250,000
Deferred tax asset, valuation allowance	0
Deferred tax asset	4,774,000			4,044,000
Unrecognized tax benefits	$ 0			$ 0

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Income Taxes (Effective Tax Rates Differ From Federal Statutory Rate) (Details)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Taxes [Abstract]
Statutory tax rate	21.00%	21.00%
Increase (decrease) resulting from:
Restricted stock	(0.90%)	(0.60%)
Tax exempt earnings on bank owned life insurance	(0.60%)	(0.20%)
Gain on redemption of life insurance policies	0.00%	(1.00%)
Dividends on equity securities	(0.20%)	(0.20%)
Low income housing credits	(0.80%)	(0.50%)
Effective tax rate	18.50%	18.50%

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Accumulated Other Comprehensive Income (Loss) (Schedule Of Accumulated Other Comprehensive Income) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss), beginning of period	$ (170,000)
Other comprehensive loss, net of tax	(1,050,000)	$ (29,000)
Accumulated other comprehensive income, end of period	(1,220,000)
Unrealized Gains and Losses on Available-for-Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss), beginning of period	(170,000)	96,000
Other comprehensive income (loss) before reclassifications	(1,050,000)	(29,000)
Other comprehensive loss, net of tax	(1,050,000)	(29,000)
Accumulated other comprehensive income, end of period	(1,220,000)	67,000
Amount reclassified out of other comprehensive income	$ 0	$ 0

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Preferred Stock (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	Oct. 25, 2019	Mar. 31, 2022	Dec. 31, 2021	May 28, 2020	Oct. 31, 2019
Private Placement [Member]
Schedule of Capitalization, Equity [Line Items]
Aggregate offering price	$ 25
Series C Preferred Stock [Member]
Schedule of Capitalization, Equity [Line Items]
Issuance of preferred stock		0	0
Aggregate value
Preferred stock, par value		$ 0.01	$ 0.01
Number of outstanding shares		0
Series C Preferred Stock [Member] | Private Placement [Member]
Schedule of Capitalization, Equity [Line Items]
Preferred stock, par value					$ 0.01
Common Stock [Member]
Schedule of Capitalization, Equity [Line Items]
Common stock, par value		$ 0.01	$ 0.01
Shares authorized		9,090,909	9,090,909
Non-Voting Common Stock [Member]
Schedule of Capitalization, Equity [Line Items]
Common stock, par value		$ 0.01	$ 0.01
Shares authorized		1,260,700	1,260,700	1,260,700

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Branch Sale (Narrative) (Details) $ in Millions	3 Months Ended
	Sep. 30, 2021 USD ($)
Branch Sale [Abstract]
Gain on sale of deposits	$ 1.9

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Subsequent Event (Narrative) (Details) - $ / shares		3 Months Ended
	Apr. 02, 2022	Mar. 31, 2022	Mar. 31, 2021
Subsequent Event [Line Items]
Dividends declared, per share		$ 0.04	$ 0.03
Subsequent Event [Member]
Subsequent Event [Line Items]
Dividends declared, per share	$ 0.04