CF BANKSHARES INC.

CF Bankshares Inc. operates as a bank holding company for CFBank, a nationally chartered boutique commercial bank. The Company's primary market areas are competitive markets for financial services, and it faces direct competition from a number of financial institutions operating in its market area, many of which have a statewide or regional presence, and in some cases, a national presence. Many of these financial institutions are significantly larger and have greater financial resources than the Company does. Competition for loans and deposits comes from savings institutions, mortgage banking companies, commercial banks, credit unions, brokerage firms and insurance companies.

The Company seeks to differentiate itself from its competitors by providing individualized service coupled with direct customer access to decision-makers, and ease of doing business. The Company believes that CFBank matches the sophistication of much larger banks, without the bureaucracy. CFBank also offers its clients the convenience of online banking, mobile banking and remote deposit capabilities.

The Company's revenues are derived principally from the generation of interest and fees on loans originated and noninterest income generated on the sale of loans. The Company's primary sources of funds are retail and business deposit accounts and certificates of deposit, brokered certificates of deposit and, to a lesser extent, principal and interest payments on loans and securities, Federal Home Loan Bank advances, other borrowings and proceeds from the sale of loans. Most of the Company's deposits and loans come from its market area. CFBank focuses on serving the financial needs of closely held businesses and entrepreneurs, by providing comprehensive Commercial, Retail, and Mortgage Lending services presence.

The Company's loan and lease portfolio consists primarily of commercial, commercial real estate and multi-family mortgage loans, mortgage loans secured by single-family residences and, to a lesser degree, consumer loans. At December 31, 2025, gross loans receivable totaled $1.8 billion ¹ and increased approximately $17.0 million ², or 1.0% ³, from $1.7 billion ⁴ at December 31, 2024. Commercial, commercial real estate and multi-family mortgage loans, including related construction loans, totaled $1.3 billion ⁵ in the aggregate and represented 72.1% ⁶ of the gross loan portfolio at December 31, 2025, as compared to 69.1% ⁷ of the gross loan portfolio at December 31, 2024. Portfolio single-family residential mortgage loans, including related construction loans, totaled $445.1 million ⁸ and represented 25.3% ⁹ of total gross loans at year-end 2025, compared to 28.4% ¹⁰ at year-end 2024. The remainder of the loan portfolio consists of consumer loans, which totaled $45.4 million ¹¹, or 2.6% ¹² of gross loans receivable, at year-end 2025.

CFBank also finances a variety of commercial and residential construction projects. During 2025, construction loans increased by $6.8 million ¹³, or 3.3% ¹⁴, to $208.9 million ¹⁵, as compared to the $202.2 million ¹⁶ in the portfolio at year-end 2024. The consumer loan portfolio generally consists of home equity lines of credit, home improvement loans, loans secured by deposits and purchased loans. At December 31, 2025, the consumer loan portfolio totaled $45.4 million ¹⁷, which was 2.6% ¹⁸ of gross loans receivable. During 2025, the consumer loan portfolio increased $2.9 million ¹⁹, or 6.7% ²⁰, over the year-end 2024 balance of $42.5 million ²¹. CFBank participates in various loan programs offered by the Small Business Administration, enabling the Company to provide customers and small business owners in its markets with access to funding to support their businesses, as well as reduce credit risk associated with these loans. Individual loans include SBA guarantees of up to 90% ²².

During the year ended December 31, 2025, single-family mortgage loans originated for sale totaled $49.7 million ²³, an increase of $2.1 million ²⁴, or 4.5% ²⁵, compared to $47.6 million ²⁶ originated in 2024. For the year ended December 31, 2025, portfolio single-family mortgage loans originated by CFBank totaled $14.8 million ²⁷, or 0.8% ²⁸ of total loans. The securities available for sale portfolio totaled $17.5 million ²⁹ at December 31, 2025. Equity securities, consisting of preferred stock in another financial institution, totaled $0 ³⁰ at December 31, 2025 and $5.0 million ³¹ at December 31, 2024. The equity security was sold during the first quarter of 2025. The Company had 98 full-time employees and six part-time employees as of December 31, 2025 ³². The Holding Company's available cash and cash equivalents totaled $522,000 ³³ at December 31, 2025. On February 4, 2025, the Company's Board of Directors authorized a stock repurchase program pursuant to which the Company is authorized to repurchase up to an aggregate of 325,000 shares ³⁴, or approximately 5% ³⁵ of the Company's outstanding common stock, on or before January 31, 2026. On December 17, 2025, the Company's Board of Directors approved the extension of its stock repurchase program to August 15, 2026. As of December 31, 2025, 270,356 shares ³⁶ remained available to be purchased by the Company under this stock repurchase program.

Net income for the year ended December 31, 2025 totaled $17.5 million ³⁷ (or $2.69 per diluted common share ³⁸) and increased $4.1 million ³⁹, or 31.0% ⁴⁰, compared to net income of $13.4 million ⁴¹ (or $2.06 per diluted common share ⁴²) for the year ended December 31, 2024. Net interest income totaled $55.0 million ⁴³ for the year ended December 31, 2025 and increased $8.4 million ⁴⁴, or 18.0% ⁴⁵, compared to net interest income of $46.6 million ⁴⁶ for the year ended December 31, 2024. The net interest margin of 2.77% ⁴⁷ for the year ended December 31, 2025 increased 34bps ⁴⁸ compared to the net interest margin of 2.43% ⁴⁹ for the year ended December 31, 2024. The provision for credit losses expense for the year ended December 31, 2025 was $8.2 million ⁵⁰, and increased $1.5 million ⁵¹, or 22.4% ⁵², compared to $6.7 million ⁵³ for the year ended December 31, 2024. Total noninterest income was $5.9 million ⁵⁴ for the year ended December 31, 2025, compared to $5.2 million ⁵⁵ for the year ended December 31, 2024. Total noninterest expense was $31.2 million ⁵⁶ for the year ended December 31, 2025, compared to $28.9 million ⁵⁷ for the year ended December 31, 2024.

The Company's growth strategy is centered on its commercial, commercial real estate and multi-family residential mortgage lending activities. Commercial real estate and multi-family residential mortgage loan balances increased $94.4 million ⁵⁸ to $704.9 million ⁵⁹ at December 31, 2025, representing an increase of 15.5% ⁶⁰ over the $610.5 million ⁶¹ balance at December 31, 2024. The origination of commercial loans continues to be a significant component of the Company's lending activity. CFBank's strong capital levels have allowed CFBank to take advantage of select market opportunities in construction lending within the risk tolerances it has identified. The Company also participates in various loan programs offered by the Small Business Administration, enabling it to provide customers and small business owners in its markets with access to funding to support their businesses, as well as reduce credit risk associated with these loans.

The Company's growth is also supported by its deposit gathering activities. CFBank offers a variety of deposit accounts with a range of interest rates and terms including savings accounts, retail and business checking accounts, money market accounts and certificates of deposit. Certificate of deposit accounts represent the largest portion of the deposit portfolio at December 31, 2025 and totaled 38.5% ⁶² of average deposit balances in 2025. Money market accounts represent the second largest portion of the deposit portfolio at December 31, 2025 and totaled 39.2% ⁶³ of average deposit balances in 2025. The Company relies primarily on a willingness to pay market-competitive interest rates to attract and retain retail deposits, as well as customer service and relationships with customers. CFBank is a participant in the Certificate of Deposit Account Registry Service and Insured Cash Sweep programs offered through IntraFi Network, which can provide FDIC insurance coverage in excess of $250,000 ⁶⁴.

The Company's net interest margin of 2.77% ⁶⁵ for the year ended December 31, 2025 increased 34bps ⁶⁶ compared to the net interest margin of 2.43% ⁶⁷ for the year ended December 31, 2024. The efficiency ratio was 51.15% ⁶⁸ for the year ended December 31, 2025, compared to 55.84% ⁶⁹ for the year ended December 31, 2024. The decrease in interest expense was attributed to a 46bps ⁷⁰ decrease in the average cost of funds on interest-bearing liabilities.

The Company's primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from sales of loans, borrowings, and funds generated from operations of CFBank. FHLB advances are used as an alternative to retail and brokered deposits to fund asset growth. Based on the collateral pledged, CFBank was eligible to borrow up to a total of $242.7 million ⁷¹ from the FHLB at year-end 2025. Based on the collateral pledged, CFBank was eligible to borrow up to a total of $122.4 million ⁷² from the Federal Reserve Bank at year-end 2025. At December 31, 2025 and 2024, CFBank had $65.0 million ⁷³ of availability in unused lines of credit with two commercial banks. The Company had 98 full-time employees and six part-time employees as of December 31, 2025 ⁷⁴.

The Company's capital allocation strategy includes the payment of dividends and share repurchases. There was $0.30 per share ⁷⁵ in dividends declared and paid on common stock during 2025. The Company presently anticipates continuing to pay dividends in the future at similar levels, subject to compliance with applicable legal and regulatory requirements. On February 4, 2025, the Company's Board of Directors authorized a stock repurchase program pursuant to which the Company is authorized to repurchase up to an aggregate of 325,000 shares ⁷⁶, or approximately 5% ⁷⁷ of the Company's outstanding common stock, on or before January 31, 2026. On December 17, 2025, the Company's Board of Directors approved the extension of its stock repurchase program to August 15, 2026. As of December 31, 2025, 270,356 shares ⁷⁸ remained available to be purchased by the Company under this stock repurchase program. The Holding Company has a credit facility with a third-party bank. Effective April 30, 2025, an additional $10 million ⁷⁹ revolving line of credit was added to the credit facility. The revolving line of credit provided an additional $10 million ⁸⁰ that was injected as additional Tier 1 capital into CFBank during the second quarter of 2025.

The Company faces structural headwinds from changes in economic and political conditions, which could adversely affect its earnings through declines in deposits, loan demand, the ability of its customers to repay loans and the value of the collateral securing its loans. Because the Company has a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral and its ability to sell the collateral upon foreclosure. The Company's market activities are concentrated in specific counties in Ohio and Indiana, and its success depends on the general economic conditions of these areas. Changing interest rates may decrease the Company's earnings and asset values. The Company's emphasis on commercial, commercial real estate and multi-family residential real estate lending may expose it to increased lending risks. The Company is also subject to limitations and conditions on certain activities as a result of its "Needs to Improve" CRA rating.

The Company faces execution risks related to its ability to effectively manage its growth. Since January 1, 2017, the Company's total net loans have grown by $1.3 billion ⁸¹, or 327.9% ⁸², and its total assets have grown by $1.6 billion ⁸³, or 339.8% ⁸⁴. The Company's continued growth may place significant demands on its operations and management. The Company also faces strong competition from other financial institutions, financial services companies and other organizations offering services similar to those offered by the Company, which could result in the Company not being able to sustain or grow its loan and deposit businesses.

The Company's allowance for credit losses may not be adequate to absorb the expected, lifetime losses in its loan portfolio, and the determination of the allowance requires management to make various assumptions and judgments about the collectability of CFBank's loans. The Company's emphasis on commercial, commercial real estate and multi-family residential real estate lending may expose it to increased lending risks, as payments on these loans are dependent on successful operation of the borrowers' business enterprises or properties. The Company is subject to limitations and conditions on certain activities as a result of its "Needs to Improve" CRA rating, which was publicly released by the OCC in March 2023. The Company's ability to support its operations, pay dividends on its common shares and service its debt is dependent upon the receipt of dividends from CFBank, and as of December 31, 2025, the Holding Company had a total of $522,000 ⁸⁵ of cash at the Holding Company level. The Company faces strong competition from other financial institutions, many of which are significantly larger and have greater financial resources.

Management's message emphasizes the Company's focus on serving the financial needs of closely held businesses and entrepreneurs by providing comprehensive Commercial, Retail, and Mortgage Lending services. The Company seeks to differentiate itself by providing individualized service coupled with direct customer access to decision-makers, and ease of doing business. Management believes that CFBank matches the sophistication of much larger banks, without the bureaucracy. The strategic priorities for the period ahead include growing capital through improving results from operations, proactively monitoring capital levels and ratios in its on-going capital planning process, and continuing to diligently monitor credit quality in the existing portfolio and analyze potential loan opportunities carefully in order to manage credit risk. Management believes that the allowance for credit losses on loans is adequate to absorb current expected credit losses in the loan portfolio as of December 31, 2025 ⁸⁶; 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.