Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - CF BANKSHARES INC. | d194218dex991.htm |
| 8-K - FORM 8-K - CF BANKSHARES INC. | d194218d8k.htm |
Exhibit 99.2
CF Bankshares Inc.
Pro Forma Consolidated Balance Sheet
At March 31, 2021
($ in thousands)
(unaudited)
| As Reported |
Pro Forma Adjustments |
Pro Forma | ||||||||||
| ASSETS |
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| Cash and cash equivalents |
$ | 125,814 | $ | (76,473 | )(a) | $ | 49,341 | |||||
| Interest-bearing deposits in other financial institutions |
100 | — | 100 | |||||||||
| Securities available for sale |
9,738 | — | 9,738 | |||||||||
| Equity securities |
5,000 | — | 5,000 | |||||||||
| Loans held for sale, at fair value |
430,453 | — | 430,453 | |||||||||
| Loans and leases, net of allowance of $17,086 |
966,802 | (30,826 | )(b) | 935,976 | ||||||||
| FHLB and FRB stock |
6,164 | — | 6,164 | |||||||||
| Premises and equipment, net |
3,769 | (361 | )(c) | 3,408 | ||||||||
| Operating lease right-of-use assets |
1,537 | — | 1,537 | |||||||||
| Bank owned life insurance |
25,302 | — | 25,302 | |||||||||
| Accrued interest receivable and other assets |
29,958 | (207 | )(d) | 29,751 | ||||||||
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| Total assets |
$ | 1,604,637 | $ | (107,867 | ) | $ | 1,496,770 | |||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Deposits |
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| Noninterest bearing |
$ | 216,935 | $ | (11,497 | )(e) | $ | 205,438 | |||||
| Interest bearing |
1,103,445 | (96,377 | )(e) | 1,007,068 | ||||||||
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| Total deposits |
1,320,380 | (107,874 | ) | 1,212,506 | ||||||||
| FHLB advances and other debt |
137,894 | — | 137,894 | |||||||||
| Advances by borrowers for taxes and insurance |
921 | 19 | (f) | 940 | ||||||||
| Operating lease liabilities |
1,672 | — | 1,672 | |||||||||
| Accrued interest payable and other liabilities |
12,265 | (12 | )(g) | 12,253 | ||||||||
| Subordinated debentures |
14,854 | — | 14,854 | |||||||||
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| Total liabilities |
1,487,986 | (107,867 | ) | 1,380,119 | ||||||||
| Stockholders’ equity |
116,651 | — | 116,651 | |||||||||
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| Total liabilities and stockholders’ equity |
$ | 1,604,637 | $ | (107,867 | ) | $ | 1,496,770 | |||||
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CF Bankshares Inc.
Pro Forma Consolidated Income Statement
Three Months Ended March 31, 2021
($ in thousands except per share data)
(unaudited)
| As Reported |
Pro Forma Adjustments |
Pro Forma | ||||||||||
| Interest and dividend income |
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| Loans and leases, including fees |
$ | 12,641 | $ | (296 | )(h) | $ | 12,345 | |||||
| Securities |
133 | — | 133 | |||||||||
| FHLB and FRB stock dividends |
55 | — | 55 | |||||||||
| Federal funds sold and other |
28 | — | 28 | |||||||||
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| 12,857 | (296 | ) | 12,561 | |||||||||
| Interest expense |
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| Deposits |
2,497 | (200 | )(h) | 2,297 | ||||||||
| FHLB advances and other debt |
519 | — | 519 | |||||||||
| Subordinated debentures |
224 | — | 224 | |||||||||
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| 3,240 | (200 | ) | 3,040 | |||||||||
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| Net interest income |
9,617 | (96 | ) | 9,521 | ||||||||
| Provision for loan and lease losses |
— | — | ||||||||||
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| Net interest income after provision for loan and lease losses |
9,617 | (96 | ) | 9,521 | ||||||||
| Noninterest income |
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| Service charges on deposit accounts |
193 | (32 | )(h) | 161 | ||||||||
| Net gains on sales of loans |
6,360 | — | 6,360 | |||||||||
| Swap fee income |
182 | — | 182 | |||||||||
| Gain on redemption of life insurance policies |
380 | — | 380 | |||||||||
| Earnings on bank owned life insurance |
90 | — | 90 | |||||||||
| Other |
25 | (1 | )(h) | 24 | ||||||||
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| 7,230 | (33 | ) | 7,197 | |||||||||
| Noninterest expense |
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| Salaries and employee benefits |
4,609 | (78 | )(h) | 4,531 | ||||||||
| Occupancy and equipment |
322 | (37 | )(h) | 285 | ||||||||
| Data processing |
536 | (8 | )(h) | 528 | ||||||||
| Franchise and other taxes |
239 | — | 239 | |||||||||
| Professional fees |
1,215 | (2 | )(h) | 1,213 | ||||||||
| Director fees |
152 | — | 152 | |||||||||
| Postage, printing and supplies |
39 | (7 | )(h) | 32 | ||||||||
| Advertising and marketing |
1,244 | — | 1,244 | |||||||||
| Telephone |
59 | (9 | )(h) | 50 | ||||||||
| Loan expenses |
57 | (6 | )(h) | 51 | ||||||||
| Depreciation |
97 | (14 | )(h) | 83 | ||||||||
| FDIC premiums |
239 | — | 239 | |||||||||
| Regulatory assessment |
65 | — | 65 | |||||||||
| Other insurance |
28 | — | 28 | |||||||||
| Other |
68 | (2 | )(h) | 66 | ||||||||
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| 8,969 | (163 | ) | 8,806 | |||||||||
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| Income before incomes taxes |
7,878 | 34 | 7,912 | |||||||||
| Income tax expense |
1,457 | 7 | (h) | 1,464 | ||||||||
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| Net income |
6,421 | 27 | 6,448 | |||||||||
| Earnings allocated to participating securities (Series C preferred stock) |
— | — | — | |||||||||
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| Net income attributable to common stockholders |
$ | 6,421 | $ | 27 | $ | 6,448 | ||||||
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| Earnings per common share: |
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| Basic |
$ | 0.98 | $ | 0.01 | $ | 0.99 | ||||||
| Diluted |
$ | 0.96 | $ | 0.01 | $ | 0.97 | ||||||
CF Bankshares Inc.
Pro Forma Consolidated Income Statement
Year Ended December 31, 2020
($ in thousands except per share data)
(unaudited)
| As Reported |
Pro Forma Adjustments |
Pro Forma | ||||||||||
| Interest and dividend income |
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| Loans and leases, including fees |
$ | 41,851 | $ | (931 | )(h) | $ | 40,920 | |||||
| Securities |
161 | — | 161 | |||||||||
| FHLB and FRB stock dividends |
199 | — | 199 | |||||||||
| Federal funds sold and other |
175 | — | 175 | |||||||||
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| 42,386 | (931 | ) | 41,455 | |||||||||
| Interest expense |
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| Deposits |
11,911 | (1,246 | )(h) | 10,665 | ||||||||
| FHLB advances and other debt |
1,729 | — | 1,729 | |||||||||
| Subordinated debentures |
938 | — | 938 | |||||||||
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| 14,578 | (1,246 | ) | 13,332 | |||||||||
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| Net interest income |
27,808 | 315 | 28,123 | |||||||||
| Provision for loan and lease losses |
10,915 | — | 10,915 | |||||||||
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| Net interest income after provision for loan and lease losses |
16,893 | 315 | 17,208 | |||||||||
| Noninterest income |
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| Service charges on deposit accounts |
633 | (105 | )(h) | 528 | ||||||||
| Net gains on sales of loans |
58,366 | — | 58,366 | |||||||||
| Earnings on bank owned life insurance |
145 | — | 145 | |||||||||
| Swap fee Income |
651 | — | 651 | |||||||||
| Other |
198 | (5 | )(h) | 193 | ||||||||
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| 59,993 | (110 | ) | 59,883 | |||||||||
| Noninterest expense |
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| Salaries and employee benefits |
21,987 | (269 | )(h) | 21,718 | ||||||||
| Occupancy and equipment |
1,077 | (119 | )(h) | 958 | ||||||||
| Data processing |
1,812 | (26 | )(h) | 1,786 | ||||||||
| Franchise and other taxes |
740 | — | 740 | |||||||||
| Professional fees |
5,070 | (2 | )(h) | 5,068 | ||||||||
| Director fees |
648 | — | 648 | |||||||||
| Postage, printing and supplies |
172 | (42 | )(h) | 130 | ||||||||
| Advertising and marketing |
5,624 | (4 | )(h) | 5,620 | ||||||||
| Telephone |
219 | (56 | )(h) | 163 | ||||||||
| Loan expenses |
304 | (21 | )(h) | 283 | ||||||||
| Depreciation |
381 | (55 | )(h) | 326 | ||||||||
| FDIC premiums |
588 | — | 588 | |||||||||
| Regulatory assessment |
181 | — | 181 | |||||||||
| Other insurance |
106 | — | 106 | |||||||||
| Other |
1,694 | (274 | )(h) | 1,420 | ||||||||
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| 40,603 | (868 | ) | 39,735 | |||||||||
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| Income before incomes taxes |
36,283 | 1,073 | 37,356 | |||||||||
| Income tax expense |
6,675 | 225 | (h) | 6,900 | ||||||||
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| Net income |
29,608 | 848 | 30,456 | |||||||||
| Earnings allocated to participating securities (Series C preferred stock) |
(2,280 | ) | (65 | ) | (2,345 | ) | ||||||
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| Net income attributable to common stockholders |
$ | 27,328 | $ | 783 | $ | 28,111 | ||||||
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| Earnings per common share: |
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| Basic |
$ | 4.53 | $ | 0.13 | $ | 4.66 | ||||||
| Diluted |
$ | 4.47 | $ | 0.13 | $ | 4.60 | ||||||
CF Bankshares Inc.
Notes to Unaudited Pro Forma Consolidated Financial Statements
Note 1 – Basis of Presentation
The accompanying unaudited pro forma consolidated financial statements which include CF Bankshares Inc. (the “Company”) and its wholly-owned subsidiary, CFBank, National Association (“CFBank”), were derived from the Company’s historical consolidated financial statements. The unaudited pro forma balance sheet as of March 31, 2021 and the unaudited pro forma income statements for the three month period ended March 31, 2021 and the year ended December 31, 2020 have been adjusted to reflect the completion of the sale of CFBank’s two Columbiana County, Ohio branches (the “Branches”) to Consumers National Bank (“Consumers”). This transaction closed on July 16, 2021 and is anticipated to result in a pre-tax deposit premium of approximately $1.9 million. The estimated gain is not included in the pro forma consolidated financial statements. During the three months ended June 30, 2021, CFBank purchased $15.2 million in additional subordinated debt securities to replace the securities that were sold to Consumers as part of this transaction. The additional purchases and any related income from those additional securities are not reflected in the pro forma consolidated financial statements.
Pursuant to the terms of the Branch Purchase and Assumption Agreement dated as of December 29, 2020 (the “P&A Agreement”) between CFBank and Consumers, upon the closing of the Branch Sale on July 16, 2021, CFBank sold and transferred to Consumers the land, buildings, fixtures, equipment and other associated assets of the Branches; $104.3 million in deposits attributable to the Branches; $15.0 million in aggregate principal amount of subordinated debt securities issued by unrelated financial institutions and held in CFBank’s portfolio; $2.5 million in aggregate principal amount of loans attributable to the Branches; and $10.7 million in aggregate principal amount of single family residential mortgage loans and home equity lines of credit from CFBank’s Northeast Ohio loan portfolio. In exchange, Consumers paid to CFBank the net book value of the land, building, fixtures, equipment and other associated assets of the Branches, a deposit premium in the amount of approximately $1.9 million (equal to 1.75% of the average daily deposits of the Branches calculated over a 30 day period prior to the closing), and the par value of the subordinated debt securities and loans acquired by Consumers.
The unaudited pro forma consolidated financial statements are furnished for informational purposes only and do not purport to reflect the Company’s financial position and results of operations had the dispositions occurred on the dates as indicated above. Further, these financial statements are not necessarily indicative of the Company’s future financial position or future results of operations and should be read in conjunction with the historical financial statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2020.
Note 2 – Pro Forma Adjustments
The proforma adjustments are based on preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma consolidated financial information:
| (a) | Represents the net cash that would have been transferred to Consumers if the sale would have closed on March 31, 2021. |
| (b) | Represents the March 31, 2021 aggregate principal balance of: (i) loans attributable to the Branches; (ii) single family residential mortgage loans and home equity lines of credit from CFBank’s Northeast Ohio loan portfolio selected to be transferred to Consumers as part of the P&A Agreement; and (iii) $15 million in aggregate principal amount of subordinated debt securities issued by unrelated financial institutions and held in CFBank’s portfolio. |
| (c) | Represents the March 31, 2021 net book value of the land, building, fixtures, equipment and other associated assets of the Branches. |
| (d) | Represents the accrued interest receivable at March 31, 2021 on the loans to be sold and transferred to Consumers. |
| (e) | Represents the March 31, 2021 balances of deposits attributable to the Branches. |
| (f) | Represents the March 31, 2021 balances of escrow deposits on loans to be sold and transferred to Consumers. |
| (g) | Represents the accrued interest payable at March 31, 2021 on the deposits attributable to the Branches. |
| (h) | Represents the income and expenses associated with the deposits and loans attributable to the branches, single family residential mortgage loans and home equity lines of credit from CFBank’s Northeast Ohio loan portfolio selected to be transferred to Consumers as part of the P&A Agreement, and $15 million in aggregate principal amount of subordinated debt securities issued by unrelated financial institutions and held in CFBank’s portfolio. |