CF BANKSHARES INC. (CFBK) stock intrinsic value fair value estimate & owner earnings analysis

CF Bankshares operates CFBank, a community bank based in the Columbus, Ohio area that combines commercial and consumer banking with a meaningful mortgage-banking and SBA lending operation, through which it originates loans and quickly resells most of them into the secondary market rather than holding them on its own books. Because of that mortgage business, the cash CFBK reports from operations swings wildly from year to year depending on whether its loan pipeline grew or shrank around year-end -- not because its underlying profitability changed. In 2020 and 2021, for example, reported operating cash flow swung from a $123 million outflow to a $253 million inflow almost entirely because of the timing of when loans were funded versus sold, not a change in the bank's earning power. We treated that loan pipeline the way a manufacturer's inventory would be treated: the swings from building or shrinking it were stripped out of the earnings figure we used, while the actual profit margin earned when those loans were sold stayed in. Other year-to-year working-capital movements typical of a bank were left as-is, since they reflect the ordinary mechanics of a lending business rather than one-off noise. On that basis, earnings per share ran $1.21, $0.49, $0.80, $1.50 and $5.26 from 2016 through 2020 (2020's figure inflated by a one-time nationwide mortgage-refinancing boom), then $1.88, $1.93, $2.72, $2.19 and $3.12 from 2021 through 2025. We used the median of the most recent five years, $2.19 per share, as our starting point, since that period captures a real cycle for this business -- the wind-down of the pandemic refinancing boom, a sharp lending-margin squeeze in 2022-2024 as deposit costs rose faster than loan yields, and a recovery that began in 2025. Earnings jumped more than 40% in 2025 as that margin squeeze started to reverse: the gap between what CFBK earns on loans and pays on deposits widened from 2.43% to 2.77% as higher-cost deposits began repricing lower. Results through the first half of 2026 show this improvement continuing, but at a more moderate roughly 15-17% pace, and that more moderate pace is what we used to start our forecast rather than extending the sharper 2025 jump. In our base case, we assume the margin recovery continues for a few more years before settling into modest, mid-single-digit growth, with the mortgage-banking business staying near its current subdued level rather than repeating the 2020-2021 boom. Beyond our ten-year forecast, we treat CFBK as an ongoing community bank whose loan and deposit book continually renews itself -- the branch and technology spending needed to sustain that franchise is already built into the earnings figure we use -- growing only modestly from there. On this basis we estimate the shares are worth roughly $62. A significant majority of that value comes from what the bank is expected to earn beyond the ten-year forecast, which is typical for a going-concern bank valued this way, but it does mean the estimate leans on CFBK remaining a durable, competitively viable franchise for a long time to come. In our bear case, a regional credit downturn -- for instance, stress in commercial real estate loans made during the low-rate era as they come up for refinancing at much higher rates -- drives a period of elevated loan losses, including a loss in the first year, followed by a slow, multi-year recovery to a lower and more conservative sustained earnings level. CFBK funds part of its balance sheet with wholesale borrowings and brokered deposits, which would amplify the damage a credit or funding shock could do to the value of the shares. Under this case we estimate the shares are worth about $19. In our bull case, the strength of the greater Columbus, Ohio economy -- which is seeing large employers and infrastructure investment move into the region -- fuels above-average loan demand, the lending-margin recovery goes further than in our base case, and mortgage-banking volumes rebound moderately from today's depressed level (without returning to the extremes of 2020-2021). Under this case we estimate the shares are worth about $94. Because the gap between our bear and base cases is wide -- reflecting real credit and funding-leverage risk in a small community bank with a genuinely cyclical mortgage-banking business -- the margin-of-safety price is set at a substantial discount to our base-case estimate, at about $32 per share. One technical note: CFBK completed a 1-for-5.5 reverse stock split in August 2018, so the per-share figures shown here for 2016 and 2017 have been adjusted to be comparable with more recent years; the 2016 adjustment is an estimate, since the company never re-published that year's share count on a post-split basis.