CF Bankshares Inc. (CFBK): Business Model Canvas [10-2024 Updated]

Understanding the business model of CF Bankshares Inc. (CFBK) reveals how this community-focused bank thrives in a competitive landscape. With a strong emphasis on personalized banking services for small businesses and a commitment to community engagement, CFBK leverages key partnerships and innovative solutions to cater to diverse customer segments. Dive into the details of their value propositions, customer relationships, and revenue streams to see how CFBK positions itself as a reliable financial partner in today’s dynamic market.

CF Bankshares Inc. (CFBK) - Business Model: Key Partnerships

Collaboration with local businesses

CF Bankshares Inc. actively collaborates with local small and medium-sized enterprises (SMEs) to enhance its community banking services. These partnerships are essential for fostering local economic growth and expanding the bank's customer base. In 2024, CF Bank reported an increase in commercial loans by $35 million during the third quarter, indicating a strong focus on SMEs.

Partnerships with financial institutions

CF Bank has established strategic partnerships with various financial institutions to diversify its funding sources and enhance service offerings. As of September 30, 2024, the bank's borrowings, including Federal Home Loan Bank (FHLB) advances, totaled $108.7 million, reflecting a 20.8% decrease from the previous quarter. This reduction is attributed to a $26 million short-term borrowing that was paid off.

Relationships with regulatory bodies

CF Bank maintains robust relationships with regulatory bodies to ensure compliance with banking regulations and to advocate for favorable banking policies. The bank's regulatory capital ratios are closely monitored to maintain adequate capital levels. As of September 30, 2024, stockholders’ equity stood at $164 million, a 2.8% increase from the previous quarter.

Engagement with community organizations

CF Bank engages with various community organizations to support local initiatives and enhance its community presence. During the third quarter of 2024, the bank reported a $53,000 increase in charitable contributions, reflecting its commitment to community engagement.

Partnership Type	Description	Impact (Q3 2024)
Local Businesses	Collaboration with SMEs for loan and deposit growth	Commercial loans increased by $35 million
Financial Institutions	Partnerships for diversified funding and service offerings	Borrowings totaled $108.7 million, decreased by 20.8%
Regulatory Bodies	Compliance and advocacy for banking policies	Stockholders’ equity at $164 million, up 2.8%
Community Organizations	Support for local initiatives and contributions	Charitable contributions increased by $53,000

CF Bankshares Inc. (CFBK) - Business Model: Key Activities

Providing commercial banking services

CF Bankshares Inc. (CFBK) operates as a full-service commercial bank, primarily focused on serving the needs of entrepreneurs and closely-held businesses. As of September 30, 2024, CFBK reported total deposits of $1.75 billion, reflecting a growth of $49.1 million, or 2.9%, compared to $1.70 billion at June 30, 2024. This growth is significant in enhancing the bank's liquidity and capacity to provide various banking services.

Managing loan portfolios

CFBK's loan portfolio management is critical to its operations. As of September 30, 2024, net loans and leases totaled $1.73 billion, an increase of $29.4 million, or 1.7%, from the previous quarter. The composition of the loan portfolio includes:

Loan Type	September 30, 2024 ($ in thousands)	June 30, 2024 ($ in thousands)
Multi-family	227,895	181,553
Commercial Real Estate	112,000	97,200
Construction - 1-4 family	23,046	22,877
Commercial and Industrial	110,000	100,000

The increase in loans is driven by a $48.2 million rise in multi-family loan balances.

Conducting risk assessments

CFBK places a strong emphasis on conducting thorough risk assessments to manage its loan portfolio effectively. As of September 30, 2024, the allowance for credit losses on loans and leases was $16.8 million, which represents 0.97% of total loans. The bank reported nonaccrual loans of $14.6 million, or 0.84% of total loans, indicating a careful monitoring of credit quality. The following table summarizes key risk assessment metrics:

Metric	Value
Nonaccrual Loans ($ in millions)	14.6
Allowance for Credit Losses ($ in millions)	16.8
Ratio of Allowance to Total Loans	0.97%

Offering treasury management solutions

CFBK provides comprehensive treasury management solutions to its commercial clients, which is integral to their banking strategy. The bank aims to enhance its service offerings by increasing its market share in major metro areas like Columbus, Cleveland, Cincinnati, and Indianapolis. As of September 30, 2024, service charge fee income increased significantly by $259,000, or 65%, compared to Q3 2023, reflecting the effectiveness of its treasury management services.

CF Bankshares Inc. (CFBK) - Business Model: Key Resources

Experienced banking staff

CF Bankshares Inc. invests significantly in its human resources, focusing on attracting and retaining skilled banking professionals. As of September 30, 2024, the company reported a total noninterest expense of $7.2 million, which includes salaries and employee benefits of approximately $3.5 million, reflecting a 3% increase compared to the previous quarter. The bank's strategic emphasis on hiring experienced staff enhances its service delivery and operational efficiency.

Robust digital banking platform

CF Bankshares operates a comprehensive digital banking platform aimed at improving customer experience and operational efficiency. This platform supports various services including online banking, mobile deposits, and digital loan applications, which are essential for engaging tech-savvy customers. The bank's investment in technology is reflected in the increased data processing expenses, totaling $623,000 for Q3 2024, marking a 17% rise from the previous quarter.

Diverse loan and deposit products

The bank offers a wide range of loan and deposit products tailored to meet the needs of both individual and commercial clients. As of September 30, 2024, total loans and leases amounted to $1.73 billion, with commercial loans increasing by $35 million during the third quarter. The deposit base stood at $1.75 billion, reflecting a growth of $49.1 million, or 2.9%, since the previous quarter. This diversity in products ensures a steady stream of revenue and mitigates risk by catering to different market segments.

Product Type	Balance ($ Million)	Growth (Quarterly Change)
Commercial Loans	1,733.9	+35
Total Deposits	1,750.0	+49.1
Noninterest-Bearing Deposits	260.1	+40.0

Strong capital base and liquidity

CF Bankshares maintains a robust capital base, with stockholders’ equity reaching $164 million as of September 30, 2024, an increase of $4.4 million from the previous quarter. The bank's liquidity position is supported by a net interest margin of 2.41%, which shows a slight improvement over the prior quarter. This strong capital position enables the bank to pursue growth opportunities while ensuring compliance with regulatory requirements.

CF Bankshares Inc. (CFBK) - Business Model: Value Propositions

Personalized banking services for small businesses

CF Bankshares Inc. provides tailored banking solutions specifically designed to meet the unique needs of small businesses. This includes dedicated relationship managers and customized financial products that cater to the operational and financial challenges faced by entrepreneurs. The bank focuses on building strong relationships with its clients, ensuring that each service is aligned with their specific business goals.

Competitive interest rates on deposits and loans

As of September 30, 2024, CF Bankshares reported a net interest margin of 2.41%, reflecting its commitment to offering competitive interest rates on both deposits and loans. The bank continues to promote attractive rates to its customers, which helps to differentiate its offerings in a competitive banking environment.

Quick decision-making processes

CF Bankshares prides itself on its efficient decision-making processes, particularly in commercial lending. The bank has streamlined its loan approval procedures, enabling faster responses to customer requests. This agility is crucial for small businesses that require timely access to funds to seize opportunities or manage cash flow.

Comprehensive financial solutions under one roof

CF Bankshares aims to be a one-stop-shop for its clients by providing a wide range of financial services, including:

• Commercial banking
• Residential mortgages
• Wealth management services
• Deposit accounts and treasury management

This comprehensive approach allows customers to manage all their financial needs through a single institution, enhancing convenience and fostering long-term relationships.

Financial Metric	Q3 2024	Q2 2024	Q3 2023
Net Income ($ Million)	4.2	1.7	4.0
Pre-Provision, Pre-Tax Net Revenue ($ Million)	5.8	5.5	6.2
Net Interest Margin (%)	2.41	2.39	2.50
Core Deposits Growth ($ Million)	57	NA	NA
Commercial Loans Growth ($ Million)	35	NA	NA

CF Bankshares Inc. (CFBK) - Business Model: Customer Relationships

Direct access to decision-makers

CF Bankshares Inc. (CFBK) emphasizes providing clients with direct access to decision-makers within the organization. This approach fosters trust and enhances relationship-building. Clients are able to engage with senior management for critical discussions on financial strategies and decision-making processes.

Dedicated relationship managers

CFBK assigns dedicated relationship managers to its clients, ensuring personalized service and attention. This strategy is particularly effective in commercial banking, where tailored solutions are vital. The dedicated managers facilitate a better understanding of client needs, leading to improved service delivery.

Tailored financial advice and support

CFBK focuses on delivering tailored financial advice to its clients. This includes customized loan products and treasury management services designed to meet specific business requirements. As of September 30, 2024, total loans and leases amounted to $1.73 billion, reflecting a strategic focus on providing value through bespoke financial solutions .

Regular communication and feedback channels

CFBK maintains regular communication with its clientele through various channels, including newsletters, surveys, and direct outreach initiatives. The bank's service charge fee income increased by 65% year-over-year, indicating the effectiveness of its engagement strategies and the responsiveness to customer feedback .

Customer Relationship Aspect	Details	Impact on Business
Direct Access to Decision-Makers	Clients can engage with senior management for critical discussions.	Builds trust and enhances relationship quality.
Dedicated Relationship Managers	Assigned to clients for personalized service.	Improves understanding of client needs and service delivery.
Tailored Financial Advice	Customized loan products and treasury management services.	Increases client satisfaction and loyalty.
Regular Communication	Newsletters, surveys, and outreach initiatives.	Enhances engagement and responsiveness to feedback.
Service Charge Fee Income	Increased by 65% year-over-year.	Indicates effective engagement strategies.

Overall, CF Bankshares Inc. employs a multifaceted approach to customer relationships, integrating direct access, dedicated managers, tailored advice, and consistent communication, which collectively support its business objectives and enhance client satisfaction.

CF Bankshares Inc. (CFBK) - Business Model: Channels

Branch locations in major metro areas

CF Bankshares Inc. operates branch locations in four key metropolitan areas: Columbus, Cleveland, Cincinnati, and Indianapolis. These branches serve as critical touchpoints for customer engagement and service delivery. As of September 30, 2024, the bank reported total deposits of $1.75 billion, reflecting an increase of $49.1 million, or 2.9%, from the previous quarter.

Online banking platform

The online banking platform of CF Bankshares Inc. provides customers with 24/7 access to their accounts. The platform includes features such as fund transfers, bill payments, and account management. As of Q3 2024, the bank has seen significant growth in non-interest-bearing deposits, which increased by $40 million (18%) during the quarter, indicating a strong reliance on digital banking solutions.

Mobile banking application

CF Bankshares Inc. offers a mobile banking application that enhances customer convenience. The app supports a range of functionalities, including mobile check deposits, transaction alerts, and secure messaging with customer service. The adoption of mobile banking continues to grow, contributing to an increase in overall customer engagement and satisfaction.

Customer service through phone and email

Customer service at CF Bankshares Inc. is available through multiple channels, including phone and email support. The bank emphasizes responsive customer service to address inquiries and resolve issues efficiently. In the third quarter of 2024, the bank reported noninterest expense of $7.2 million, which includes costs associated with maintaining customer service operations.

Channel	Key Features	Recent Performance
Branch Locations	Four major metro areas; direct customer engagement	Deposits: $1.75 billion as of Sept 30, 2024
Online Banking	24/7 access; fund transfers; bill payments	Non-interest-bearing deposits increased by $40 million (18%) in Q3 2024
Mobile Banking App	Mobile check deposits; transaction alerts; secure messaging	Increased customer engagement through app functionalities
Customer Service	Support via phone and email; responsive service	Noninterest expense: $7.2 million in Q3 2024

CF Bankshares Inc. (CFBK) - Business Model: Customer Segments

Closely held businesses and entrepreneurs

CF Bankshares Inc. primarily serves closely held businesses and entrepreneurs in its key markets. The bank has focused on building strong relationships with these segments to provide tailored financial services that meet their unique needs. As of September 30, 2024, CFBank reported a significant increase in commercial loans, which rose by $35 million during the third quarter.

Retail banking customers

CFBK offers a range of retail banking services, catering to individual consumers and families. The bank's retail banking segment has seen an uptick in non-interest bearing deposits, which grew by $40 million or 18% during the third quarter of 2024. This growth reflects a successful strategy to attract and retain retail customers through competitive offerings and personalized service.

Real estate investors

Real estate investors constitute another crucial customer segment for CF Bankshares. The bank has established a strong foothold in the commercial real estate lending market, with a recorded investment in multi-family loans increasing by $45.8 million since December 31, 2023. This segment is vital for CFBank’s portfolio, as it contributes significantly to the bank's overall loan growth.

Non-profit organizations

CFBK also serves non-profit organizations, providing them with specialized banking solutions that support their unique operational needs. The bank has tailored its offerings to include services such as treasury management and operational financing. This sector is increasingly important as CF Bankshares aims to diversify its customer base and enhance its community engagement.

Customer Segment	Key Statistics	Growth Initiatives
Closely held businesses and entrepreneurs	Commercial loans increased by $35 million in Q3 2024	Strengthening business banking teams in major metro markets
Retail banking customers	Non-interest bearing deposits grew by $40 million (18%) in Q3 2024	Competitive offerings and personalized services
Real estate investors	Multi-family loans increased by $45.8 million since December 31, 2023	Focus on commercial real estate lending
Non-profit organizations	Specialized banking solutions for operational needs	Community engagement and operational financing

CF Bankshares Inc. (CFBK) - Business Model: Cost Structure

Employee salaries and benefits

Employee salaries and benefits for the quarter ended September 30, 2024, totaled $3.539 million, reflecting a 3% increase from $3.420 million in the previous quarter. Year-to-date expenses for employee salaries and benefits were $10.617 million, down 5% from $11.184 million for the same period in 2023.

Operational costs for branches

Occupancy and equipment expenses for CF Bankshares amounted to $0.472 million for the quarter ended September 30, 2024, which is an 11% increase from $0.427 million in the previous quarter. For the year-to-date, these expenses reached $1.377 million, up 9% compared to $1.264 million in 2023.

Marketing and advertising expenses

Marketing and advertising expenses were recorded at $0.047 million for the quarter ended September 30, 2024, down 11% from $0.053 million in the previous quarter. Year-to-date, marketing expenses sharply declined to $0.099 million, a significant decrease of 68% from $0.307 million in the first nine months of 2023.

Technology and infrastructure investments

Data processing expenses, which are reflective of technology and infrastructure investments, totaled $0.623 million for the quarter ended September 30, 2024, marking a 17% increase from $0.532 million in the prior quarter. For the year-to-date, these expenses were $1.887 million, up 20% from $1.568 million in the same period of 2023.

Cost Category	Q3 2024 (in millions)	Q2 2024 (in millions)	Q3 2023 (in millions)	Year-to-Date 2024 (in millions)	Year-to-Date 2023 (in millions)
Employee Salaries and Benefits	3.539	3.420	3.667	10.617	11.184
Occupancy and Equipment	0.472	0.427	0.433	1.377	1.264
Marketing and Advertising	0.047	0.053	0.148	0.099	0.307
Data Processing	0.623	0.532	0.522	1.887	1.568
Total Noninterest Expense	7.226	7.092	6.760	21.505	21.624

CF Bankshares Inc. (CFBK) - Business Model: Revenue Streams

Interest Income from Loans

CF Bankshares Inc. generates significant revenue through interest income from loans. For the quarter ended September 30, 2024, the total interest income amounted to $29.996 million, reflecting a 6% increase compared to $28.166 million in the same quarter of 2023. The net interest income for this period was $11.460 million, which is a 2% decrease from $11.667 million in Q3 2023.

Fees from Banking Services

CFBK earns revenue from various banking service fees. In Q3 2024, service charges on deposit accounts generated $655,000, a 65% increase from $396,000 in Q3 2023. Year-to-date, service charge income reached $1.837 million, up 70% from $1.079 million in the previous year.

Service Charges on Deposit Accounts

Service charges from deposit accounts are a vital revenue stream for CFBK. The growth in noninterest income for the quarter ended September 30, 2024, totaled $1.606 million, up 23% from $1.301 million in Q3 2023. The increase is primarily attributed to a $259,000 rise in service charges on deposit accounts compared to the previous year.

Gains from Mortgage Loan Sales

CF Bankshares also realizes gains from the sale of mortgage loans. During Q3 2024, the net gain from sales of residential mortgage loans was $110,000, which represents a 129% increase from $48,000 in Q3 2023. For the year-to-date, these gains totaled $287,000, reflecting a 238% increase compared to $85,000 in the same period last year.

Revenue Stream	Q3 2024	Q3 2023	Change (%)
Total Interest Income	$29.996 million	$28.166 million	6%
Net Interest Income	$11.460 million	$11.667 million	-2%
Service Charges on Deposit Accounts	$655,000	$396,000	65%
Net Gains from Mortgage Loan Sales	$110,000	$48,000	129%

Article updated on 8 Nov 2024

Resources:

1. CF Bankshares Inc. (CFBK) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of CF Bankshares Inc. (CFBK)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View CF Bankshares Inc. (CFBK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.