Cf Bankshares (CFBK 2.13%), a regional bank holding company focused on commercial banking and consumer financial services, reported results on August 4, 2025. The headline news: Both earnings and revenue (GAAP) beat analyst expectations, supported by stronger profitability and efficiency improvements. Earnings per share (GAAP) were $0.77, outpacing the $0.72 consensus estimate (GAAP). Revenue (GAAP) reached $15.6 million, also ahead of the $14.73 million GAAP projection. These results reflect higher net interest income (GAAP), an improved efficiency ratio, and continued growth in core deposits and commercial loans. The bank's quarter showed solid operating leverage, but also included a higher provision for loan losses in Q2 2024 compared to Q2 2025 (GAAP) and an uptick in nonaccrual and past-due loans in Q2 2025 compared to Q1 2025 and Q4 2024.
| Metric | Q2 2025 | Q2 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $0.77 | $0.72 | $0.26 | 196% |
| Revenue (GAAP) | $15.6 million | $14.73 million | N/A | N/A |
| Pre-Provision, Pre-Tax Net Revenue (Non-GAAP) | $7.8 million | $5.5 million | 42.4% | |
| Net Interest Margin | 2.83% | 2.39% | 0.44 pp | |
| Efficiency Ratio | 49.8% | 56.4% | (6.6) pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Recent Focus
Cf Bankshares operates in Ohio and Indiana, offering loans and financial services mainly to businesses, professionals, and local communities. Its business centers on providing commercial loans, including commercial and industrial loans, commercial real estate loans, and multi-family mortgage lending. These areas now represent over two-thirds of its loan portfolio, reflecting a strategic shift away from lower-yielding residential lending.
Recently, the company has focused on scaling its commercial banking platform. It has also targeted efficiency improvements, deposit franchise upgrades, and investments in talent. Success depends on attracting new business clients, funding growth with stable, low-cost liabilities, and balancing risk through prudent credit management and compliance with regulatory requirements. Competition remains high, especially against larger banks with more resources, so CFBank aims to differentiate through responsive service and skilled local banking teams.
Quarter Highlights: Profits, Margins, and Growth
The quarter brought sharp improvement across core earnings metrics. Net income (GAAP) jumped to $5.0 million from $1.7 million for Q2 2024. Operating leverage was evident in the efficiency ratio, which improved to 49.8% from 56.4% in Q2 2024. The return on equity (GAAP) rose to 11.47%, and The return on assets (GAAP) reached 0.97%, up significantly from a year ago. Book value per share increased to $26.63, compared to $24.17 for Q2 2024.
Pre-provision, pre-tax net revenue (a non-GAAP measure of core banking profitability before accounting for loan loss allowances) climbed 42% year over year to $7.8 million. This improvement came alongside steady revenue gains and disciplined cost control, with noninterest expenses falling 2.5% quarter over quarter. The company's management has highlighted that these investments supported regional banking expansion and commercial team enhancements.
The net interest margin, which measures the difference between what the bank earns on loans and pays on deposits, moved up for the fifth consecutive quarter to 2.83%. This margin expansion was driven by higher interest income and a lower cost of funds. Management credited both deposit franchise upgrades and strategic shifts in balance sheet mix. Noninterest income also rose, reflecting more swap fee revenue, gains on residential mortgage loan sales, and higher deposit service charges.
On the other hand, The provision for loan losses (GAAP) rose to $1.4 million, compared to $0.6 million last quarter but well below the $3.6 million figure in the prior-year period. This higher provision was primarily tied to one specific commercial loan participation outside the bank's core portfolio, as noted by management. Charge-offs -- loans removed from the books after being deemed uncollectible -- remained low at an annualized 0.01% of average loans. Nonaccrual and past-due loans both increased, with nonaccrual loans now representing 0.94% of the total loan book.
Loan growth was moderate, with net loans and leases rising 0.3% from the prior quarter and 1.9% from December 31, 2024.
Single-family residential balances shrank during Q1 2025.
Deposits increased by 1.5% over the quarter and 3.1% year to date, with both interest-bearing and noninterest-bearing deposits contributing to the growth. The uninsured deposit ratio, a measure of potential funding risk, improved to 29.1% from the prior period’s 31.1%.
Capital levels remained robust, supported by a $10 million capital injection from the holding company. Regulatory capital ratios -- such as the tier 1 leverage ratio at 11.20% and total risk-based capital ratio at 14.69% -- were well above minimum regulatory thresholds. Management cited this as a function of underlying core earnings growth. No unusual, non-recurring items were disclosed beyond the one-off increase in loan provision linked to the non-core credit.
Looking Forward
The company did not issue specific forward guidance for earnings or revenue. Leadership indicated its focus remains on scaling commercial banking, deepening core deposit relationships, and recruiting experienced commercial bankers.
Investors and observers should continue to watch asset quality metrics, given the sequential uptick in both nonaccrual and past-due loans. The pace of expense growth and the effectiveness of talent investments will also shape future performance, as will any further shifts in loan portfolio mix or deposit strategy. The bank's commercial lending expansion aligns with its stated goals, but brings exposure to higher-risk categories if local or regional economic conditions change. The company pays a dividend, with the most recent quarterly payout set at $0.08 per share, a rise from the prior $0.07 per share in Q1 2025.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
