Investment Thesis
CF Bankshares demonstrates strong revenue growth of 118% YoY and maintains conservative leverage (0.16x debt/equity) with adequate liquidity ($267.8M cash). However, the interest coverage ratio of 0.3x indicates the bank cannot cover debt service from operating income—a critical deficiency for a financial institution. Combined with extremely weak returns (ROA 0.2%, ROE 2.7%), this suggests operational stress that undermines growth gains.
Strengths
- Revenue growth of 118% YoY demonstrates strong business momentum
- Conservative capital structure with debt-to-equity of 0.16x
- Strong liquidity position with $267.8M in cash equivalents
- Positive free cash flow of $4.6M with 16.4% FCF margin
Risks
- Interest coverage of 0.3x indicates inability to service debt from operations (unsustainable)
- Critically low ROA (0.2%) and ROE (2.7%) signal weak capital efficiency for a bank
- Profitability growth (30.5% NI growth) lags revenue growth significantly, suggesting margin compression or rising costs
Key Metrics to Watch
- Interest coverage ratio—must improve to 1.0x or higher for sustainability
- Return on assets (ROA)—needs improvement toward 1.0%+ for industry competitiveness
- Net interest margin trends and asset quality metrics
- Operating leverage—monitor if revenue growth translates to proportional profit improvement
Financial Metrics
Revenue
28.1M
Net Income
5.0M
EPS (Diluted)
$0.77
Free Cash Flow
4.6M
Total Assets
2.1B
Cash
267.8M
Profitability Ratios
Gross Margin
N/A
Operating Margin
20.9%
Net Margin
17.9%
ROE
2.7%
ROA
0.2%
FCF Margin
16.4%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.16x
Debt/Assets
91.2%
Interest Coverage
0.33x
Long-term Debt
29.5M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-12T07:02:05.814484 |
Data as of: 2026-03-31 |
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