EX-99.1 2 cfbk-20211027xex99_1.htm EX-99.1 Exhibit 99.1 earnings release 09.30.21

                                                                                                                                                    Exhibit 99.1

Picture 3

Parent of CFBank, NA





 





 



 



PRESS RELEASE

 

FOR IMMEDIATE RELEASE:

October 27, 2021

For Further Information:

Timothy T. O'Dell, President & CEO



Phone:  614.318.4660



Email: timodell@cfbankmail.com





CF BANKSHARES INC. ANNOUNCES NET INCOME OF $4.1 MILLION OR $0.61 PER SHARE FOR THE 3RD QUARTER.  



Columbus, Ohio – October 27, 2021 – CF Bankshares Inc. (NASDAQ: CFBK) (the “Company”), the parent of CFBank, today announced financial results for the third quarter and year to date (YTD) ended September 30, 2021.



Third Quarter and Year to Date 2021 Highlights

·

Net income of $4.1 million for the third quarter and $14.0 million YTD, and Earnings Per Share (EPS) of $0.61 for the quarter and $2.10 YTD.  

·

Net interest margin (NIM) increased 26 bps during the quarter to 3.21%. 

·

Book value per share increased to $18.69 at September 30, 2021. 

·

Return on average assets (ROA) and return on average equity (ROE) were 1.25% and 15.96%, respectively, for the first nine months of 2021.  For the third quarter, ROA was 1.18% and ROE was 13.43%.

·

Net loans and leases grew by $122 million during the quarter, which was net of PPP repayments of $28 million. 

·

Net Interest Income (NII) of $10.4 million for the quarter represents a 46% increase as compared to the third quarter of 2020.

·

During the third quarter, CFBank completed the sale of its two Columbiana County Ohio Branches resulting in a Deposit Premium of $1.9 million.

·

The Tangible Common Equity (TCE) ratio increased to 9.09% at September 30, 2021.

·

Credit quality remains strong with nonperforming assets as a percentage of total assets of 0.07% at September 30, 2021.

·

ALLL reserves of $15.5 million equals 1.36% of total loans and 1.37% of total non-government guaranteed loans at September 30, 2021.



Recent Developments

·

On October 5, 2021, the Company’s Board of Directors declared a Cash Dividend of $0.04 per share payable to shareholders on November 2, 2021.  This represents a 33% increase over the previous quarterly dividend.

·

On September 29, 2021, the Board of Directors of the Company approved an increase in the number of shares that may be repurchased by the Company under its previously announced stock repurchase program from 250,000 to 350,000 and extended the program through June 30, 2022.

 

 

CEO and Board Chair Commentary



Timothy T. O’Dell, President and CEO, commented, “We are pleased with our Q3 Earnings & Growth performance including EPS of $0.61 per share. Additionally, subsequent to quarter end, we announced a 33% increase in our quarterly Cash Dividend.  We reinvested the deposit premium from the sale of our Columbiana county branch banks to propel our investment in establishing our new Indianapolis presence, which is off to a solid start. The Indianapolis expansion represents the 4th Major Metro Market for our CFBank franchise, which we believe will uniquely position CF for added future growth opportunities. 



During the third quarter, our strong growth continued with net Loans & Leases increasing $122 million without compromising our high Credit Standards. Our CF Commercial Banking Team continues to demonstrate our ability to compete successfully with top regional banks for quality Loan relationships.  Additionally, Q3’s strong loan growth is expected to expand our NII in future periods. 



We have set a 2022 objective of doubling our SBA lending volumes, given the balance sheet and earnings leverage advantages of government sponsored loan programs. 



Team CFBank was recently recognized by Piper Sandler as a SM-All Star performer for 2021. This is the third consecutive year we received this award and recognition for our performance, and placed us as one of only four peer banks out of the top 35 banks recognized for this repeat achievement. 



We have continued to reposition our mortgage lending business from a national DTC model to a more regionally-focused loan origination model which we expect will be a hybrid of both retail and DTC originations.



Our business model and ease of doing business, resonates consistently with business owners and entrepreneurs in Metro markets across our geographic footprint. 



Our CF Leadership focus is upon finishing 2021 strongly, as we position ourselves for continuing growth and expansion in 2022. 



Team CFBank is just Revving Up!”



Robert E. Hoeweler, Chairman of the Board, added: “On behalf of the Board of Directors I offer sincere congratulations to the CFBank leadership team for being recognized, for the 3rd consecutive year, as a top performing bank by Piper Sandler against our peers. This honor is based on several performance categories including earnings, growth, and credit quality. We are very proud of achieving this recognition, especially in the face of extraordinary circumstances. We were able to nimbly adjust our business plan to current circumstances and from economic, industry, and governmental headwinds, while coping with the Covid 19 lock-downs.”



Overview of Results 

Net income for the three months ended September 30, 2021 totaled $4.1 million (or $0.61 per diluted common share) compared to net income of $3.5 million (or $0.52 per diluted common share) for the three months ended June 30, 2021 and net income of $10.2 million (or $1.54 per diluted common share) for the three months ended September 30, 2020.

Net income for the nine months ended September 30, 2021 totaled $14.0 million (or $2.10 per diluted common share) compared to net income of $22.3 million (or $3.36 per diluted common share) for the nine months ended September 30, 2020.  The decrease in net income was primarily the result of decreased margins and volumes on DTC residential mortgage loans, partially offset by an increase in net interest income and a reduction in the provision for loan and lease losses.

Net Interest Income and Net Interest Margin

Net interest income totaled $10.4 million for the quarter ended September 30, 2021 and decreased $627,000, or 5.7%, compared to $11.0 million in the prior quarter, and increased $3.3 million, or 45.8%, compared to $7.1 million in the third quarter of 2020.  The decrease in net interest income compared to the prior quarter was primarily due to a $958,000, or 7.0%, decrease in interest income, offset by a $331,000, or 12.6%, decrease in interest expense.  The decrease in interest income was primarily attributed to a $198.6 million, or 13.3%, decrease in average interest-earning assets outstanding, resulting

 

 

primarily from a decrease in loans held for sale, partially offset by a 27bps increase in average yield on interest-earning assets.  The decrease in interest expense was attributed to a $229.4 million, or 19.0%, decrease in average interest-bearing liabilities partially offset by a 6bps increase in the average cost of funds on interest-bearing liabilities.  The net interest margin of 3.21% for the quarter ended September 30, 2021 increased 26bps compared to the net interest margin of 2.95% for the prior quarter.

The increase in net interest income compared to the third quarter of 2020 was primarily due to a $2.1 million, or 19.6%, increase in interest income and a $1.2 million, or 34.1%, decrease in interest expense.  The increase in interest income was primarily attributed to a $163.8 million, or 14.4%, increase in average interest-earning assets outstanding, resulting primarily from an increase in net loans and leases, coupled with a 17bps increase in average yield on interest-earning assets.  The decrease in interest expense was attributed to a 56bps decrease in the average cost of funds on interest-bearing liabilities, partially offset by a $46.0 million, or 4.9%, increase in average interest-bearing liabilities.  The net interest margin of 3.21% for the quarter ended September 30, 2021 increased 69bps compared to the net interest margin of 2.52% for the third quarter of 2020.

Noninterest Income

Noninterest income for the quarter ended September 30, 2021 totaled $2.1 million and increased $1.1 million, or 118.4%, compared to $951,000 for the prior quarter.  The increase was primarily due to a $1.9 million gain on the sale of deposits, partially offset by a $1.2 million decrease in net gain on sale of SBA loans.  The increase in net gain on sale of deposits was a result of the sale of CFBank’s two Columbiana County branches during the third quarter of 2021.

Noninterest income for the quarter ended September 30, 2021 decreased $21.3 million, or 91.1%, compared to $23.4 million for the quarter ended September 30, 2020.  The decrease was primarily due to a $23.4 million decrease in net gain on sale of residential mortgage loans partially offset by a $1.9 million increase in the net gain on sale of deposits.  The decrease in net gain on sale of loans was primarily a result of decreased volumes and margins on DTC residential mortgage loans.    The increase in net gain on sale of deposits was a result of the sale of CFBank’s two Columbiana County branches.

The following table represents the notional amount of loans sold during the three months ended September 30, 2021, June 30, 2021, and September 30, 2020 (in thousands).









 

 

 

 

 

 

 

 



Three Months ended



September 30, 2021

 

June 30, 2021

 

September 30, 2020

Notional amount of loans sold

$

 498,968 

 

$

 972,250 

 

$

 552,122 



The following table represents the revenue recognized on mortgage activities for the three months ended September 30, 2021, June 30, 2021, and September 30, 2020 (in thousands).









 

 

 

 

 

 

 

 



Three Months ended



September 30, 2021

 

June 30, 2021

 

September 30, 2020

Gain on loans sold

$

 6,415 

 

$

 2,289 

 

$

 19,984 

Gain (loss) from change in fair value of loans held-for-sale

 

 (1,916)

 

 

 1,012 

 

 

 4,669 

Gain (loss) from change in fair value of derivatives

 

 (4,767)

 

 

 (4,045)

 

 

 (1,586)



$

 (268)

 

$

 (744)

 

$

 23,067 



Noninterest Expense

Noninterest expense for the quarter ended September 30, 2021 totaled $7.4 million and decreased $1.9 million, or 19.8%, compared to $9.3 million for the prior quarter.  The decrease in noninterest expense was primarily due to a $1.2 million decrease in advertising and promotion expense,  a $422,000 decrease in professional fees expense, and a $301,000 decrease in salaries and employee benefits.  The decreases were primarily the result of the repositioning of our mortgage lending business from a national DTC model to a more retail and regionally focused loan origination model.

Noninterest expense for the quarter ended September 30, 2021 decreased $4.5 million, or 37.7%, compared to $11.9 million for the quarter ended September 30, 2020.  The decrease in noninterest expense was primarily due to a $3.1 million decrease in salaries and employee benefits and a $1.6 million decrease in advertising and promotion expense. The decreases were

 

 

primarily the result of the repositioning of our mortgage lending business from a national DTC model to a more retail and regionally focused loan origination model.

Income Tax Expense

Income tax expense was $985,000 for the quarter ended September 30, 2021 (effective tax rate of 19.5%), compared to $835,000 for the prior quarter (effective tax rate of 19.3%) and $2.7 million for the quarter ended September 30, 2020 (effective tax rate of 20.7%).

Loans and Loans Held For Sale

Net loans and leases totaled $1.1 billion and increased $122.2 million, or 12.2%, from the prior quarter and increased $228.4 million, or 25.5%, from December 31, 2020.  The increase in net loans during the quarter was primarily due to a $48.4 million increase in single-family residential loan balances, a $45.5 million increase in commercial real estate loan balances, a $15.7 million increase in multi-family loan balances, a $12.2 million increase in commercial loan balances, and a $3.9 million increase in consumer loan balances, partially offset by a $3.5 million decrease in construction loans balances.  The increases in the aforementioned loan balances were related to increased sales activity and new relationships.

The increase in total loans from December 31, 2020 was primarily due to $141.1 million increase in single-family residential loan balances, an $83.0 million increase in commercial real estate loan balances, a $43.4 million increase in multi-family loan balances, a $2.1 million increase in construction loans balances, and a $2.1 million increase in consumer loan balances, partially offset by a $44.7 million decrease in commercial loan balances.  The increases in the aforementioned loan balances were related to increased sales activity and new relationships. The decrease in commercial loan balances was primarily the result of PPP loan repayments of $104.8 million, partially offset by new and increased relationships.

The following table presents the recorded investment in loans and leases for certain non-owner-occupied loan types ($ in thousands).





 

 

 

 

 



September 30, 2021

 

June 30, 2021

Construction - 1-4 family

$

 17,717 

 

$

 14,282 

Construction - Multi-family

 

 58,139 

 

 

 55,090 

Construction - Non-residential

 

 29,609 

 

 

 24,091 

Hotel/Motel

 

 20,357 

 

 

 20,412 

Industrial / Warehouse

 

 35,821 

 

 

 40,257 

Land/Land Development

 

 25,027 

 

 

 22,205 

Medical/Healthcare/Senior Housing

 

 5,280 

 

 

 5,343 

Multi-family

 

 82,452 

 

 

 65,262 

Office

 

 43,421 

 

 

 42,633 

Retail

 

 32,453 

 

 

 34,487 

Other

$

 57,793 

 

$

 37,138 



Asset Quality

Nonaccrual loans were $1.0 million, or 0.09% of total loans at September 30, 2021, an increase of $684,000 from nonaccrual loans of $327,000 at June 30, 2021 and an increase of $316,000 from nonaccrual loans at December 31, 2020.  Loans past due more than 30 days totaled $2.1 million at September 30, 2021, compared to  $635,000 at June 30, 2021 and $2.2 million at December 31, 2020.

The allowance for loan and lease losses totaled $15.5 million at September compared to $15.5 million at June 30, 2021, and $17.0 million at December 31, 2020.  The ratio of the ALLL to total loans was 1.36% at September 30, 2021, compared to 1.52% at June 30, 2021, and 1.87% at December 31, 2020.

The provision for loan and lease losses expense for the quarter ended September 30, 2021 was $0 compared to ($1.6) million for the prior quarter and $5.8 million for the quarter ended September 30, 2020.  Net charge-offs for the quarter ended September 30, 2021 totaled $8,000 compared to net recoveries of $9,000 for the prior quarter and net charge-offs of $365,000 for the quarter ended September 30, 2020.

 

 

Deposits

Deposits totaled $1.2 billion at September 30, 2021, a decrease of $15.1 million, or 1.3%, when compared to $1.2 billion at June 30, 2021, and an increase of $43.7 million, or 3.9%, when compared to $1.1 billion at December 31, 2020.   The decrease when compared to the prior quarter end is primarily due to a $17.8 million decrease in money market account balance, a $2.6 million decrease in savings account balances, partially offset by a $5.8 million increase in certificate of deposit account balances.  The increase when compared to December 21, 2020 is primarily due to a $99.5 million increase in checking account balances, partially offset by a $37.9 million decrease in money market account balances, and a $15.6 million decrease in savings account balances.  Noninterest-bearing deposit accounts decreased $6.4 million to $243.2 million from $249.6 million at June 30, 2021, and increased $44.5 million from $198.7 million at December 31, 2020.

Borrowings

FHLB advances and other debt totaled $41.2 million at September 30, 2021, a decrease of $33.1 million when compared to $74.3 million at June 30, 2021.  The decrease was primarily due to a $31.8 million decrease in borrowings outstanding under the FRB’s  Paycheck Protection Program Liquidity Facility (PPPLF) and a $3.0 million decrease in FHLB advances, partially offset by a $1.7 million increase in the holding company line of credit facility.

Capital

Stockholders’ equity totaled $123.2 million at September 30, 2021, an increase of $3.3 million, or 2.8%, from $119.9 million at June 30, 2021.  Stockholders’ equity increased $13.0 million, or 11.8% from $110.2 million at December 31, 2020.  The increase in total stockholders’ equity during three and nine months ended September 30, 2021 was primarily attributed to net income.

About CF Bankshares Inc. and CFBank

CF Bankshares Inc. (the Company) is a holding company that owns 100% of the stock of CFBank, National Association (CFBank). CFBank is a nationally chartered boutique Commercial Bank operating primarily in Four (4) Major Metro Markets: Columbus, Cleveland and Cincinnati, Ohio, and Indianapolis, Indiana. The current Leadership Team and Board recapitalized the Company and CFBank in 2012 during the financial crisis, repositioning CFBank as a full-service Commercial Bank model. Since the 2012 recapitalization, CFBank has achieved a CAGR of 25%.

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 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. CFBank matches the sophistication of much larger banks, without the bureaucracy.

CFBank also offers its clients the convenience of online internet banking, mobile banking, and remote deposit capabilities.

CFBank has been recognized as a small cap All-Star performer by Piper Sandler for three consecutive years (2019, 2020 and 2021) and among the Top 200 Publicly Traded Community Banks by American Banker.  In addition, CFBank is rated 5 Stars by Bauer.

Additional information about the Company and CFBank is available at www.CF.Bank

Use of Non-GAAP Financial Measures

This earnings release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP).  Management uses these "non-GAAP" financial measures in its analysis of the Company’s performance and believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers.  These disclosures should not be viewed as substitutes for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.  Non-GAAP financial measures included in this earnings release include Pre-Provision, Pre-Tax Net Revenue (PPNR),  PPNR Return on Average Assets and PPNR Return on Average Equity.  A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included at the end of this earnings release under the heading "GAAP TO NON-GAAP RECONCILIATION."

 

 

FORWARD LOOKING STATEMENTS

This press release 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. or CFBank; (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, impacts from the ongoing COVID-19 pandemic on local, national and global economic conditions in general and on our industry and business in particular, including adverse impacts on our customer’s operations, financial condition and ability to repay loans, changes in interest rates or disruptions in the mortgage market, and the effects of various governmental responses to the pandemic, including stimulus packages and programs, and those additional 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, 2020, as supplemented by the risk factor set forth in “Item 1A. Risk Factors” of Part II of our Quarterly Report on Form 10-Q filed with the SEC for the quarterly period ended June 30, 2021.

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 press release speak only as of the date hereof.  We undertake no obligation to publicly release revisions to any forward-looking statements to reflect events or circumstances after the date of such statements, except to the extent required by law.



 

 

 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

Three months ended

 

 

 

Nine months ended

 

 



September 30,

 

 

 

September 30,

 

 



2021

 

2020

 

% change

 

2021

 

2020

 

% change

Total interest income

$

 12,703 

 

$

 10,617 

 

 20% 

 

$

 39,221 

 

$

 30,431 

 

 29% 

Total interest expense

 

 2,290 

 

 

 3,476 

 

-34%

 

 

 8,151 

 

 

 10,884 

 

-25%

     Net interest income

 

 10,413 

 

 

 7,141 

 

 46% 

 

 

 31,070 

 

 

 19,547 

 

 59% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan and lease losses

 

 -

 

 

 5,750 

 

n/m

 

 

 (1,600)

 

 

 8,875 

 

n/m

Net interest income after provision for loan and lease losses

 

 10,413 

 

 

 1,391 

 

 649% 

 

 

 32,670 

 

 

 10,672 

 

 206% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Service charges on deposit accounts

 

 213 

 

 

 161 

 

 32% 

 

 

 612 

 

 

 451 

 

 36% 

  Net gain (loss) on sales of residential mortgage loans

 

 (268)

 

 

 23,067 

 

-101%

 

 

 5,348 

 

 

 45,488 

 

-88%

  Net gain on sale of SBA loans

 

 (1)

 

 

 20 

 

n/m

 

 

 1,158 

 

 

 68 

 

n/m

  Swap fee income

 

 -

 

 

 28 

 

n/m

 

 

 182 

 

 

 435 

 

-58%

  Gain on redemption of life insurance

 

 -

 

 

 -

 

n/m

 

 

 383 

 

 

 -

 

n/m

  Gain on sale of deposits

 

 1,893 

 

 

 -

 

n/m

 

 

 1,893 

 

 

 -

 

n/m

  Other

 

 240 

 

 

 100 

 

 140% 

 

 

 682 

 

 

 234 

 

 191% 

     Noninterest income

 

 2,077 

 

 

 23,376 

 

-91%

 

 

 10,258 

 

 

 46,676 

 

-78%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Salaries and employee benefits

 

 4,250 

 

 

 7,352 

 

-42%

 

 

 13,410 

 

 

 16,647 

 

-19%

  Occupancy and equipment

 

 254 

 

 

 254 

 

 0% 

 

 

 835 

 

 

 754 

 

 11% 

  Data processing

 

 520 

 

 

 434 

 

 20% 

 

 

 1,580 

 

 

 1,308 

 

 21% 

  Franchise and other taxes

 

 241 

 

 

 180 

 

 34% 

 

 

 723 

 

 

 543 

 

 33% 

  Professional fees

 

 959 

 

 

 1,358 

 

-29%

 

 

 3,555 

 

 

 3,545 

 

 0% 

  Director fees

 

 156 

 

 

 134 

 

 16% 

 

 

 466 

 

 

 513 

 

-9%

  Postage, printing, and supplies

 

 34 

 

 

 19 

 

 79% 

 

 

 120 

 

 

 135 

 

-11%

  Advertising and marketing

 

 45 

 

 

 1,613 

 

-97%

 

 

 2,572 

 

 

 4,136 

 

-38%

  Telephone

 

 65 

 

 

 59 

 

 10% 

 

 

 191 

 

 

 165 

 

 16% 

  Loan expenses

 

 99 

 

 

 72 

 

 38% 

 

 

 187 

 

 

 234 

 

-20%

  Depreciation

 

 108 

 

 

 98 

 

 10% 

 

 

 311 

 

 

 278 

 

 12% 

  FDIC premiums

 

 476 

 

 

 150 

 

 217% 

 

 

 1,095 

 

 

 441 

 

 148% 

  Regulatory assessment

 

 66 

 

 

 46 

 

 43% 

 

 

 196 

 

 

 136 

 

 44% 

  Other insurance

 

 45 

 

 

 25 

 

 80% 

 

 

 113 

 

 

 79 

 

 43% 

  Other

 

 111 

 

 

 123 

 

-10%

 

 

 311 

 

 

 360 

 

-14%

     Noninterest expense

 

 7,429 

 

 

 11,917 

 

-38%

 

 

 25,665 

 

 

 29,274 

 

-12%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 5,061 

 

 

 12,850 

 

-61%

 

 

 17,263 

 

 

 28,074 

 

-39%

Income tax expense

 

 985 

 

 

 2,664 

 

-63%

 

 

 3,277 

 

 

 5,814 

 

-44%

Net Income

 

 4,076 

 

 

 10,186 

 

-60%

 

$

 13,986 

 

$

 22,260 

 

-37%

Earnings allocated to participating securities (Series C preferred stock)

 

 -

 

 

 -

 

n/m

 

 

 -

 

 

 (2,289)

 

n/m

Net Income attributable to common stockholders

$

 4,076 

 

$

 10,186 

 

-60%

 

$

 13,986 

 

$

 19,971 

 

-30%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

 0.63 

 

$

 1.56 

 

 

 

$

 2.14 

 

$

 3.41 

 

 

Diluted earnings per common share

$

 0.61 

 

$

 1.54 

 

 

 

$

 2.10 

 

$

 3.36 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding - basic

 

 6,510,504 

 

 

 6,515,389 

 

 

 

 

 6,528,126 

 

 

 5,865,193 

 

 

Average common shares outstanding - diluted 

 

 6,657,250 

 

 

 6,596,996 

 

 

 

 

 6,672,314 

 

 

 5,935,700 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

n/m - not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Financial Condition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

Sept 30,

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sept 30,

 

(unaudited)

2021

 

2021

 

2021

 

2020

 

2020

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

 68,161 

 

$

 134,321 

 

$

 125,814 

 

$

 221,594 

 

$

 92,784 

 

Interest-bearing deposits in other financial institutions

 

 100 

 

 

 100 

 

 

 100 

 

 

 100 

 

 

 100 

 

Securities available for sale

 

 17,128 

 

 

 17,661 

 

 

 9,738 

 

 

 8,701 

 

 

 9,746 

 

Equity Securities

 

 5,000 

 

 

 5,000 

 

 

 5,000 

 

 

 5,000 

 

 

 -

 

Loans held for sale

 

 77,946 

 

 

 254,327 

 

 

 430,453 

 

 

 283,165 

 

 

 308,691 

 

Loans and leases

 

 1,139,199 

 

 

 1,016,972 

 

 

 983,888 

 

 

 912,366 

 

 

 887,201 

 

 Less allowance for loan and lease losses

 

 (15,487)

 

 

 (15,495)

 

 

 (17,086)

 

 

 (17,022)

 

 

 (15,492)

 

    Loans and leases, net

 

 1,123,712 

 

 

 1,001,477 

 

 

 966,802 

 

 

 895,344 

 

 

 871,709 

 

FHLB and FRB stock

 

 6,475 

 

 

 6,164 

 

 

 6,164 

 

 

 5,847 

 

 

 5,377 

 

Premises and equipment, net

 

 3,944 

 

 

 3,765 

 

 

 3,769 

 

 

 3,730 

 

 

 3,937 

 

Other assets held for sale

 

 -

 

 

 29,308 

 

 

 -

 

 

 -

 

 

 -

 

Operating lease right of use assets

 

 1,462 

 

 

 1,584 

 

 

 1,537 

 

 

 1,387 

 

 

 1,488 

 

Bank owned life insurance

 

 25,582 

 

 

 25,439 

 

 

 25,302 

 

 

 17,490 

 

 

 5,453 

 

Accrued interest receivable and other assets

 

 25,446 

 

 

 28,635 

 

 

 29,958 

 

 

 34,637 

 

 

 37,754 

 

Total assets

$

 1,354,956 

 

$

 1,507,781 

 

$

 1,604,637 

 

$

 1,476,995 

 

$

 1,337,039 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Noninterest bearing

$

 243,153 

 

$

 249,557 

 

$

 216,935 

 

$

 198,675 

 

$

 149,886 

 

    Interest bearing

 

 913,637 

 

 

 922,312 

 

 

 1,103,445 

 

 

 914,395 

 

 

 824,082 

 

         Total deposits

 

 1,156,790 

 

 

 1,171,869 

 

 

 1,320,380 

 

 

 1,113,070 

 

 

 973,968 

 

FHLB advances and other debt

 

 41,218 

 

 

 74,290 

 

 

 137,894 

 

 

 214,426 

 

 

 224,521 

 

Advances by borrowers for taxes and insurance

 

 1,756 

 

 

 1,412 

 

 

 921 

 

 

 1,029 

 

 

 537 

 

Operating lease liabilities

 

 1,578 

 

 

 1,709 

 

 

 1,672 

 

 

 1,532 

 

 

 1,642 

 

Other liabilities held for sale

 

 -

 

 

 107,229 

 

 

 -

 

 

 -

 

 

 -

 

Accrued interest payable and other liabilities

 

 15,571 

 

 

 16,549 

 

 

 12,265 

 

 

 21,884 

 

 

 18,567 

 

Subordinated debentures

 

 14,874 

 

 

 14,864 

 

 

 14,854 

 

 

 14,844 

 

 

 14,835 

 

         Total liabilities

 

 1,231,787 

 

 

 1,387,922 

 

 

 1,487,986 

 

 

 1,366,785 

 

 

 1,234,070 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 123,169 

 

 

 119,859 

 

 

 116,651 

 

 

 110,210 

 

 

 102,969 

 

Total liabilities and stockholders' equity

$

 1,354,956 

 

$

 1,507,781 

 

$

 1,604,637 

 

$

 1,476,995 

 

$

 1,337,039 

 







 

 

 











 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balance Sheet and Yield Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



For Three Months Ended



September 30, 2021

 

June 30, 2021

 

September 30, 2020



Average

 

Interest

 

Average

 

Average

 

Interest

 

Average

 

Average

 

Interest

 

Average



Outstanding

 

Earned/

 

Yield/

 

Outstanding

 

Earned/

 

Yield/

 

Outstanding

 

Earned/

 

Yield/



Balance

 

Paid

 

Rate

 

Balance

 

Paid

 

Rate

 

Balance

 

Paid

 

Rate



(Dollars in thousands)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities (1) (2)

$

 22,312 

 

$

 230 

 

 

 4.13% 

 

$

 18,310 

 

$

 166 

 

 

 3.64% 

 

$

 10,432 

 

$

 40 

 

 

 1.56% 

Loans held for sale

 

 174,298 

 

 

 1,008 

 

 

 2.31% 

 

 

 373,025 

 

 

 2,119 

 

 

 2.27% 

 

 

 210,457 

 

 

 1,467 

 

 

 2.79% 

Loans and leases (3)

 

 1,049,570 

 

 

 11,389 

 

 

 4.34% 

 

 

 1,006,079 

 

 

 11,295 

 

 

 4.49% 

 

 

 847,387 

 

 

 9,037 

 

 

 4.27% 

Other earning assets

 

 45,174 

 

 

 21 

 

 

 0.19% 

 

 

 92,589 

 

 

 24 

 

 

 0.10% 

 

 

 60,268 

 

 

 22 

 

 

 0.15% 

FHLB and FRB stock

 

 6,221 

 

 

 55 

 

 

 3.54% 

 

 

 6,164 

 

 

 57 

 

 

 3.70% 

 

 

 5,251 

 

 

 51 

 

 

 3.88% 

Total interest-earning assets

 

 1,297,575 

 

 

 12,703 

 

 

 3.92% 

 

 

 1,496,167 

 

 

 13,661 

 

 

 3.65% 

 

 

 1,133,795 

 

 

 10,617 

 

 

 3.75% 

Noninterest-earning assets

 

 81,674 

 

 

 

 

 

 

 

 

 80,786 

 

 

 

 

 

 

 

 

 66,864 

 

 

 

 

 

 

Total assets

$

 1,379,249 

 

 

 

 

 

 

 

$

 1,576,953 

 

 

 

 

 

 

 

$

 1,200,659 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

 912,533 

 

 

 1,777 

 

 

 0.78% 

 

$

 1,084,719 

 

 

 2,108 

 

 

 0.78% 

 

$

 741,945 

 

 

 2,803 

 

 

 1.51% 

FHLB advances and other borrowings

 

 67,853 

 

 

 513 

 

 

 3.02% 

 

 

 125,046 

 

 

 513 

 

 

 1.64% 

 

 

 192,457 

 

 

 673 

 

 

 1.40% 

Total interest-bearing liabilities

 

 980,386 

 

 

 2,290 

 

 

 0.93% 

 

 

 1,209,765 

 

 

 2,621 

 

 

 0.87% 

 

 

 934,402 

 

 

 3,476 

 

 

 1.49% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities

 

 277,469 

 

 

 

 

 

 

 

 

 251,071 

 

 

 

 

 

 

 

 

 169,400 

 

 

 

 

 

 

Total liabilities

 

 1,257,855 

 

 

 

 

 

 

 

 

 1,460,836 

 

 

 

 

 

 

 

 

 1,103,802 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 121,394 

 

 

 

 

 

 

 

 

 116,117 

 

 

 

 

 

 

 

 

 96,857 

 

 

 

 

 

 

Total liabilities and equity

$

 1,379,249 

 

 

 

 

 

 

 

$

 1,576,953 

 

 

 

 

 

 

 

$

 1,200,659 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest-earning assets

$

 317,189 

 

 

 

 

 

 

 

$

 286,402 

 

 

 

 

 

 

 

$

 199,393 

 

 

 

 

 

 

Net interest income/interest rate spread

 

 

 

$

 10,413 

 

 

 2.99% 

 

 

 

 

$

 11,040 

 

 

 2.78% 

 

 

 

 

$

 7,141 

 

 

 2.26% 

Net interest margin

 

 

 

 

 

 

 

 3.21% 

 

 

 

 

 

 

 

 

 2.95% 

 

 

 

 

 

 

 

 

 2.52% 

Average interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to average interest-bearing liabilities

 

 132.35% 

 

 

 

 

 

 

 

 

 123.67% 

 

 

 

 

 

 

 

 

 121.34% 

 

 

 

 

 

 







(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.





 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

At or for the three months ended

 

At or for the nine months ended

($ in thousands except per share data)

 

Sept 30,

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sept 30,

 

 

September 30,

(unaudited)

 

2021

 

2021

 

2021

 

2020

 

2020

 

 

2021

 

 

2020

Earnings and Dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

 10,413 

 

$

 11,040 

 

$

 9,617 

 

$

 8,261 

 

$

 7,141 

 

$

 31,070 

 

$

 19,547 

Provision for loan and lease losses

 

$

 -

 

$

 (1,600)

 

$

 -

 

$

 2,040 

 

$

 5,750 

 

$

 (1,600)

 

$

 8,875 

Noninterest income

 

$

 2,077 

 

$

 951 

 

$

 7,230 

 

$

 13,317 

 

$

 23,376 

 

$

 10,258 

 

$

 46,676 

Noninterest expense

 

$

 7,429 

 

$

 9,267 

 

$

 8,969 

 

$

 11,329 

 

$

 11,917 

 

$

 25,665 

 

$

 29,274 

Net Income

 

$

 4,076 

 

$

 3,489 

 

$

 6,421 

 

$

 7,348 

 

$

 10,186 

 

$

 13,986 

 

$

 22,260 

Basic earnings per common share

 

$

 0.63 

 

$

 0.53 

 

$

 0.98 

 

$

 1.13 

 

$

 1.56 

 

$

 2.14 

 

$

 3.41 

Diluted earnings per common share

 

$

 0.61 

 

$

 0.52 

 

$

 0.96 

 

$

 1.11 

 

$

 1.54 

 

$

 2.10 

 

$

 3.36 

Dividends declared per share

 

$

 0.03 

 

$

 0.03 

 

$

 0.03 

 

$

 0.03 

 

$

 -

 

$

 0.09 

 

$

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios (annualized)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

 1.18% 

 

 

 0.88% 

 

 

 1.70% 

 

 

 2.11% 

 

 

 3.39% 

 

 

 1.25% 

 

 

 2.80% 

Return on average equity

 

 

 13.43% 

 

 

 12.02% 

 

 

 22.73% 

 

 

 27.92% 

 

 

 42.07% 

 

 

 15.96% 

 

 

 33.69% 

Average yield on interest-earning assets

 

 

 3.92% 

 

 

 3.65% 

 

 

 3.60% 

 

 

 3.59% 

 

 

 3.75% 

 

 

 3.72% 

 

 

 4.02% 

Average rate paid on interest-bearing liabilities

 

 

 0.93% 

 

 

 0.87% 

 

 

 1.10% 

 

 

 1.35% 

 

 

 1.49% 

 

 

 0.97% 

 

 

 1.77% 

Average interest rate spread

 

 

 2.99% 

 

 

 2.78% 

 

 

 2.50% 

 

 

 2.24% 

 

 

 2.26% 

 

 

 2.75% 

 

 

 2.25% 

Net interest margin, fully taxable equivalent

 

 

 3.21% 

 

 

 2.95% 

 

 

 2.69% 

 

 

 2.48% 

 

 

 2.52% 

 

 

 2.94% 

 

 

 2.58% 

Efficiency ratio

 

 

 59.48% 

 

 

 77.28% 

 

 

 53.24% 

 

 

 52.50% 

 

 

 39.05% 

 

 

 62.10% 

 

 

 44.21% 

Noninterest expense to average assets

 

 

 2.15% 

 

 

 2.35% 

 

 

 2.38% 

 

 

 3.25% 

 

 

 3.97% 

 

 

 2.30% 

 

 

 3.68% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital leverage ratio (1)

 

 

 11.04% 

 

 

 9.72% 

 

 

 9.37% 

 

 

 9.74% 

 

 

 10.89% 

 

 

 11.04% 

 

 

 10.89% 

Total risk-based capital ratio (1)

 

 

 14.22% 

 

 

 14.10% 

 

 

 13.18% 

 

 

 14.31% 

 

 

 13.89% 

 

 

 14.22% 

 

 

 13.89% 

Tier 1 risk-based capital ratio (1)

 

 

 12.97% 

 

 

 12.85% 

 

 

 11.92% 

 

 

 13.05% 

 

 

 12.63% 

 

 

 12.97% 

 

 

 12.63% 

Common equity tier 1 capital to risk weighted assets (1)

 

 

 12.97% 

 

 

 12.85% 

 

 

 11.92% 

 

 

 13.05% 

 

 

 12.63% 

 

 

 12.97% 

 

 

 12.63% 

Equity to total assets at end of period

 

 

 9.09% 

 

 

 7.95% 

 

 

 7.27% 

 

 

 7.46% 

 

 

 7.70% 

 

 

 9.09% 

 

 

 7.70% 

Book value per common share

 

$

 18.69 

 

$

 18.07 

 

$

 17.55 

 

$

 16.79 

 

$

 15.68 

 

$

 18.69 

 

$

 15.68 

Tangible book value per common share

 

$

 18.69 

 

$

 18.07 

 

$

 17.55 

 

$

 16.79 

 

$

 15.68 

 

$

 18.69 

 

$

 15.68 

Period-end market value per common share

 

$

 20.45 

 

$

 19.48 

 

$

 19.96 

 

$

 17.69 

 

$

 12.08 

 

$

 20.45 

 

$

 12.08 

Period-end common shares outstanding

 

 

 6,588,343 

 

 

 6,631,589 

 

 

 6,645,956 

 

 

 6,564,304 

 

 

 6,566,256 

 

 

 6,588,343 

 

 

 6,566,256 

Average basic common shares outstanding

 

 

 6,510,504 

 

 

 6,536,422 

 

 

 6,537,751 

 

 

 6,517,248 

 

 

 6,515,389 

 

 

 6,528,126 

 

 

 5,865,193 

Average diluted common shares outstanding

 

 

 6,657,250 

 

 

 6,689,253 

 

 

 6,670,591 

 

 

 6,617,254 

 

 

 6,596,996 

 

 

 6,672,314 

 

 

 5,935,700 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans

 

$

 1,011 

 

$

 327 

 

$

 641 

 

$

 695 

 

$

 527 

 

$

 1,011 

 

$

 527 

Nonperforming loans to total loans

 

 

 0.09% 

 

 

 0.03% 

 

 

 0.07% 

 

 

 0.08% 

 

 

 0.06% 

 

 

 0.09% 

 

 

 0.06% 

Nonperforming assets to total assets

 

 

 0.07% 

 

 

 0.02% 

 

 

 0.04% 

 

 

 0.05% 

 

 

 0.04% 

 

 

 0.07% 

 

 

 0.04% 

Allowance for loan and lease losses to total loans

 

 

 1.36% 

 

 

 1.52% 

 

 

 1.74% 

 

 

 1.87% 

 

 

 1.75% 

 

 

 1.36% 

 

 

 1.75% 

Allowance for loan and lease losses to nonperforming loans

 

 

 1531.85% 

 

 

 4738.53% 

 

 

 2665.52% 

 

 

 2449.21% 

 

 

 2939.66% 

 

 

 1531.85% 

 

 

 2939.66% 

Net charge-offs (recoveries)

 

$

 8 

 

$

 (9)

 

$

 (64)

 

$

 510 

 

$

 365 

 

$

 (65)

 

$

 521 

Annualized net charge-offs (recoveries) to average loans

 

 

 0.00% 

 

 

 0.00% 

 

 

 (0.03%)

 

 

 0.23% 

 

 

 0.17% 

 

 

 (0.01%)

 

 

 0.09% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

 1,065,069 

 

$

 1,023,152 

 

$

 931,323 

 

$

 889,460 

 

$

 859,097 

 

$

 1,006,514 

 

$

 782,678 

Assets

 

$

 1,379,249 

 

$

 1,576,953 

 

$

 1,507,362 

 

$

 1,395,411 

 

$

 1,200,659 

 

$

 1,487,855 

 

$

 1,061,647 

Stockholders' equity

 

$

 121,394 

 

$

 116,117 

 

$

 112,978 

 

$

 105,283 

 

$

 96,857 

 

$

 116,830 

 

$

 88,109 



(1)  Regulatory capital ratios of CFBank



 

 

GAAP TO NON-GAAP RECONCILIATION



This press release contains certain non-GAAP disclosures for: (1) PPNR,  (2) PPNR return on average assets and (3) PPNR return on average equity.  The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operations performance and to enhance investors’ overall understanding of such financial performance.  In particular, the use of PPNR is prevalent among banking regulators, investors, and analysts.  Accordingly, we disclose the non-GAAP measures in addition to the related GAAP measures of: (1) net earnings (2) return on average assets and (3) return on average equity.  



The table below presents the reconciliation of these GAAP financial measures to the related non-GAAP financial measures:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-provision, pre-tax net revenue ("PPNR"),

 

 

 

 

 

 

 

 

 

 

 

PPNR Return on Average Assets and PPNR Return on Average Equity

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Nine Months Ended



September 30,

 

June 30,

 

September 30,

 

September 30,



2021

 

2021

 

2020

 

2021

 

2020

Net income

$

 4,076 

 

$

 3,489 

 

$

 10,186 

 

$

 13,986 

 

$

 22,260 

Add: Provision for credit losses

 

 -

 

 

 (1,600)

 

 

 5,750 

 

 

 (1,600)

 

 

 8,875 

Add: Income tax expense

 

 985 

 

 

 835 

 

 

 2,664 

 

 

 3,277 

 

 

 5,814 

Pre-provision, pre-tax net revenue

$

 5,061 

 

$

 2,724 

 

$

 18,600 

 

$

 15,663 

 

$

 36,949 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Assets

$

 1,379,249 

 

$

 1,576,953 

 

$

 1,200,659 

 

$

 1,487,855 

 

$

 1,061,647 

Average Stockholders' Equity

$

 121,394 

 

$

 116,117 

 

$

 96,857 

 

$

 116,830 

 

$

 88,109 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

 1.18% 

 

 

 0.88% 

 

 

 3.39% 

 

 

 1.25% 

 

 

 2.80% 

PPNR return on average assets (2)

 

 1.47% 

 

 

 0.69% 

 

 

 6.20% 

 

 

 1.40% 

 

 

 4.64% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (3)

 

 13.43% 

 

 

 12.02% 

 

 

 42.07% 

 

 

 15.96% 

 

 

 33.69% 

PPNR return on average equity (4)

 

 16.68% 

 

 

 9.38% 

 

 

 76.81% 

 

 

 17.88% 

 

 

 55.91% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized net income divided by average assets

 

 

 

 

 

 

 

 

(2) Annualized PPNR divided by average assets

 

 

 

 

 

 

 

 

(3) Annualized net income divided by average stockholders' equity

 

 

 

 

 

 

 

 

(4) Annualized PPNR divided by average stockholders' equity