CF Bankshares Inc. (CFBK): 5 FORCES Analysis [Nov-2025 Updated]

You're looking for the real story behind CF Bankshares Inc.'s competitive footing as we hit late 2025, past the noise of quarterly reports. Honestly, the landscape is a tug-of-war: while the bank is managing costs well, showing an efficiency ratio of 49.8% in Q3 2025, it faces serious pressure from its funding side, where 31.1% of deposits exceeded FDIC limits as of Q1 2025, giving those large depositors real leverage. The rivalry in metro Ohio and Indianapolis is fierce, but the bank's strong capital position, boasting a Tier 1 Leverage ratio of 11.19% in Q3 2025, acts as a solid shield against brand-new bank charters. To see exactly where CF Bankshares Inc. is winning and where it needs to watch its back against substitutes and demanding commercial borrowers, dive into this force-by-force breakdown below.

CF Bankshares Inc. (CFBK) - Porter's Five Forces: Bargaining power of suppliers

When looking at CF Bankshares Inc. (CFBK), the suppliers are primarily the providers of funding, which, for a bank, means depositors and the wholesale funding markets. The power these suppliers wield directly impacts CF Bankshares Inc.'s cost of funds and, consequently, its net interest margin (NIM).

The most significant supplier pressure comes from the large, uninsured depositors. You need to watch this segment closely because these funds are the most flight-prone if confidence wavers or better rates appear elsewhere. As of the first quarter of 2025, a substantial 31.1% of CF Bankshares Inc.'s total deposits exceeded the FDIC insurance limit of $250,000. That concentration means these large depositors have considerable leverage to demand better pricing or move their money.

Deposit competition is a constant factor, not just from other community banks but increasingly from non-bank financial technology firms offering high-yield alternatives. This competition inherently drives up the cost of funding for CF Bankshares Inc. However, there are some mitigating factors in the funding mix you should note:

• Core deposits increased by $20 million in the third quarter of 2025 when compared to June 30, 2025, which slightly helps temper the overall pricing pressure by adding stickier, relationship-based funding.
• The overall cost of funds declined by 58 basis points (bps) when compared to the third quarter of 2024. This is definitely an operational win, directly improving the net interest margin.

To manage the sensitivity of uninsured deposits, CF Bankshares Inc. relies on wholesale funding, specifically Federal Home Loan Bank (FHLB) advances. This provides a stable, albeit rate-sensitive, alternative source of liquidity when deposit competition heats up. As of September 30, 2025, FHLB advances and other debt totaled $101.0 million. This level is slightly higher than the $100.9 million reported at June 30, 2025, showing a minor uptick in reliance on this channel, likely to support loan production or manage deposit outflows.

Here is a quick look at the funding cost and stability metrics as of late 2025:

The 58bps drop in the cost of funds is the key takeaway here; it shows management is successfully navigating the supplier landscape, perhaps by letting some higher-cost funding roll off or by attracting lower-cost core deposits. Still, the high percentage of uninsured deposits means the bargaining power of that supplier segment remains elevated. Finance: review the Q4 2025 deposit beta projections by next Tuesday.

CF Bankshares Inc. (CFBK) - Porter's Five Forces: Bargaining power of customers

You're looking at the customer power dynamic for CF Bankshares Inc. (CFBK) as of late 2025. Honestly, for their core commercial clients, the power is definitely elevated because the bank operates in highly competitive metro areas. CF Bankshares Inc. serves five major metro markets: Columbus, Cleveland, Cincinnati, and Akron in Ohio, plus Indianapolis, Indiana.

Commercial borrowers have high power due to strong competition in these markets, primarily from regional banks. Customers can easily shop around for better commercial loan rates or treasury management services, which means CF Bankshares Inc. can't take that business for granted. Still, the bank counters this by emphasizing its boutique delivery model. They promise individualized service and direct access to decision-makers, which is a clear differentiator against larger, more bureaucratic regional competitors.

Here's a look at the commercial loan activity, which shows demand is present even with client turnover:

The focus on relationship banking is key here. When you look at the commercial pipeline remaining strong, it suggests the personalized approach is working to retain and attract new business, despite the competitive rate environment. The bank reported that core deposits increased by $20 million between June 30, 2025, and September 30, 2025.

For the retail side, the bargaining power shifts. Retail customers face low switching costs for basic checking and savings products. If CF Bankshares Inc. isn't competitive on deposit rates, those balances can move quickly. For instance, as of October 9, 2025, their promotional rates required significant minimums to capture the best yields:

• 12 Month CD: 4.00% APY with a $10,000 new money minimum deposit.
• Platinum Money Market: 3.39% APY with a $25,000 new money minimum balance.
• Boutique Savings: Earns interest with balances of $500 or more.

The bank's geographic footprint dictates where this customer power is most acutely felt:

• Markets Served: Columbus, Cleveland, Cincinnati, Akron (Ohio), and Indianapolis (Indiana).
• Customer Focus: Closely held businesses and entrepreneurs.
• Competitive Set: Primarily regional banks.

If onboarding takes 14+ days, churn risk rises for retail deposits. Finance: draft 13-week cash view by Friday.

CF Bankshares Inc. (CFBK) - Porter's Five Forces: Competitive rivalry

You're looking at the competitive rivalry for CF Bankshares Inc. (CFBK), and honestly, it's a classic David versus Goliath scenario in their operating areas. CF Bankshares Inc. competes head-to-head in five major metro markets: Columbus, Cleveland, Cincinnati, and Akron in Ohio, plus Indianapolis, Indiana. In these dense markets, CF Bankshares Inc. is up against much larger regional banks, which definitely raises the competitive heat.

To manage this, CF Bankshares Inc. leans hard into its niche. It focuses on serving the financial needs of closely held businesses and entrepreneurs. This boutique approach lets them offer individualized service and direct access to decision-makers, matching the sophistication of bigger players without the bureaucracy.

The rivalry is intensifying because of CF Bankshares Inc.'s deliberate shift in its loan book. They are actively contracting Residential loans while aggressively expanding Commercial Bank relationships. For example, in Q1 2025 alone, the company sold off $18.1 million in residential mortgage loan portfolios, redeploying that capital into Commercial lending. This focus means they are pushing harder into the commercial segment, where competition is fierce. Still, the strategy seems to be working, as new Commercial Loan production totaled $155 million year-to-date as of Q3 2025.

This strategic push requires top talent, and competition dictates that CF Bankshares Inc. must continuously hire experienced bankers away from rivals to expand its market presence. You saw this in action in April 2025 when Matt Tuohey joined as Market President for Northeast Ohio, bringing over 30 years of commercial banking and executive leadership experience. They are definitely investing in people to win market share.

Despite the competitive pressures, CF Bankshares Inc. is showing strong internal discipline, which is a direct countermeasure to external rivalry. The bank's efficiency ratio improved to 49.8% in Q3 2025, a significant drop from 55.3% in Q3 2024, signaling strong cost management. Here's a quick look at how that efficiency and strategic focus are playing out:

The ability to improve efficiency while simultaneously executing a loan portfolio pivot under competitive duress is key. It shows management is focused on making the boutique model work against larger institutions. If onboarding takes 14+ days, churn risk rises, so the speed of integrating new commercial bankers is defintely important.

CF Bankshares Inc. (CFBK) - Porter's Five Forces: Threat of substitutes

You're looking at how external options chip away at CF Bankshares Inc.'s core business, and honestly, the landscape in late 2025 is shifting fast. The threat of substitutes is real, especially as technology makes alternatives more accessible and competitive.

Non-bank FinTech lenders offer faster, specialized commercial financing alternatives. By mid-2025, fintech-originated loans surpassed $500 billion in outstanding balances globally. In developed regions, more than half of Small and Medium-sized Enterprise (SME) loans are now sourced via fintech platforms, a clear indication of clients prioritizing speed over traditional bank processes.

Mortgage banking is largely substituted by loan sales, reducing portfolio risk, a strategy CF Bankshares Inc. is actively employing. During the first quarter of 2025, CF Bankshares Inc. completed the sale of two residential mortgage loan portfolios totaling $18.1 million. Furthermore, the gain on sales of residential mortgage loans increased by $99,000 in the third quarter of 2025 compared to the prior quarter.

Money market funds (MMFs) and brokerages substitute bank deposits for high-rate savings, especially for corporate cash management. Total U.S. MMF assets reached $7.57 trillion as of November 25, 2025. Historically, from 1995 to 2025, the data suggests a significant substitution dynamic: a 1% increase in bank deposits was associated with a 0.2% decline in MMF assets on average.

Commercial Real Estate (CRE) loan payoffs are high as projects refinance into permanent, non-bank loans. This is a direct pressure point on bank loan portfolios. Nationally, 20% of the $4.8 trillion in outstanding commercial mortgages were due in 2025, equating to $957 billion needing refinancing. For CF Bankshares Inc. specifically, new Commercial Loan production year-to-date (as of Q3 2025) totaled $155 million, which was necessary to offset considerable loan payoffs driven by CRE projects moving to permanent financing. In the broader non-agency market during Q1 2025, alternative lenders held a 19% share of loan closings.

Treasury management services are a key defense against non-bank substitutes for commercial clients. CF Bankshares Inc. saw its Noninterest income, which includes service charges on deposit accounts, increase by $108,000 in Q1 2025 compared to Q1 2024. This service line helps lock in commercial operating cash that might otherwise flow to MMFs.

Here's a quick look at the competitive pressure points from substitutes:

The pressure from MMFs is evident in the historical relationship: a 1% rise in bank deposits correlates with a 0.2% drop in MMF assets over the 1995-2025 period.

CF Bankshares Inc. (CFBK) - Porter's Five Forces: Threat of new entrants

You're assessing the competitive landscape for CF Bankshares Inc. as of late 2025, and the barrier to entry for a new, full-service commercial bank charter is significant, though not absolute.

The threat of new entrants is generally moderate. This is largely because the regulatory hurdles for obtaining a new bank charter remain high, demanding substantial upfront capital and operational readiness. For instance, a recently conditionally approved de novo national bank charter applicant in October 2025 was required to maintain a minimum 12% Tier 1 leverage ratio during its initial three years of enhanced scrutiny. This level of capitalization immediately filters out less-funded operations.

CF Bankshares Inc.'s own financial strength acts as a direct barrier to a new competitor trying to match its footing. As of the third quarter of 2025, CF Bankshares Inc. reported a strong capital position, holding a Tier 1 Leverage ratio of 11.19%. This solid ratio suggests CF Bankshares Inc. is well-capitalized relative to regulatory expectations, making it harder for a startup to compete on stability or regulatory compliance from day one.

Still, the landscape is shifting because of technology. FinTech companies present a nuanced threat. They can enter specific product lines, such as payments processing or specialized lending segments, without needing the full, costly bank charter. This allows them to target profitable niches where CF Bankshares Inc. operates, often with lower overhead.

Brand recognition and longevity also form a soft barrier. CF Bankshares Inc., through its primary bank, CFBank, traces its roots back to 1892. That 133-year history in the market provides a level of trust and established relationships that a brand-new entity simply cannot replicate quickly.

Furthermore, new entrants must compete for the same specialized human capital that drives a boutique commercial bank. CF Bankshares Inc. itself noted in Q1 2025 that it was highly enthused by the interest level of experienced Commercial Bankers looking to join, indicating an active recruitment environment where new players must also fight to staff up with quality talent.

Here's a quick look at the structural elements influencing this force:

If onboarding new commercial bankers takes longer than expected, market share capture by new entrants could accelerate.