##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 (Mark
one)
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission
File Number 0-25045
 CENTRAL FEDERAL CORPORATION
  Delaware
    
    34-1877137(State or other jurisdiction of
    
    (IRS Employerincorporation or organization)
    
    Identification No.)
 2923 Smith Road, Fairlawn, Ohio 44333
 (330) 666-7979
 (Former name, former address and former fiscal year, if changed since last report)
 þ o
 o þ
  Class:
    
    Outstanding at July 31, 2007Common stock, $0.01 par value
    
    4,434,787 shares
 o þ




---



##### 



PagePART I. Financial InformationItem 1. Financial Statements (Unaudited)Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006
    
    
    3Consolidated Statements of Operations for the three and six months ended June 30, 2007 and 2006
    
    
    4Consolidated Statement of Changes in Shareholders Equity for the six months ended June 30, 2007
    
    
    5Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2007 and 2006
    
    
    6Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2007 and 2006
    
    
    7Notes to Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis
    
    
    18Item 3. Controls and Procedures
    
    
    26PART II. Other InformationItem 1. Legal Proceedings
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    27Item 6. Exhibits
    
    
    28Signatures
    
    
    29EX-10.1EX-11.1EX-31.1EX-31.2EX-32.1




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June 30,
    
    
    December 31,2007
    
    
    2006(unaudited)ASSETSCash and cash equivalents
    
    $
    3,370
    
    
    $
    5,403Securities available for sale
    
    
    30,770
    
    
    
    29,326Loans held for sale
    
    
    795
    
    
    
    2,000Loans, net of allowance of $2,272 and $2,109
    
    
    208,834
    
    
    
    184,695Federal Home Loan Bank stock
    
    
    1,963
    
    
    
    2,813Loan servicing rights
    
    
    183
    
    
    
    201Foreclosed assets, net
    
    
    262
    
    
    
    Premises and equipment, net
    
    
    5,835
    
    
    
    4,105Bank owned life insurance
    
    
    3,710
    
    
    
    3,646Deferred tax asset
    
    
    2,036
    
    
    
    2,044Accrued interest receivable and other assets
    
    
    2,162
    
    
    
    1,795$
    259,920
    
    
    $
    236,028LIABILITIES AND SHAREHOLDERS EQUITYDepositsNon-interest bearing
    
    $
    11,505
    
    
    $
    11,114Interest bearing
    
    
    165,612
    
    
    
    156,477Total deposits
    
    
    177,117
    
    
    
    167,591Federal Home Loan Bank advances
    
    
    48,045
    
    
    
    32,520Advances by borrowers for taxes and insurance
    
    
    100
    
    
    
    137Accrued interest payable and other liabilities
    
    
    2,007
    
    
    
    1,540Subordinated debentures
    
    
    5,155
    
    
    
    5,155Total liabilities
    
    
    232,424
    
    
    
    206,943Shareholders equityPreferred stock, 1,000,000 shares authorized;
none issued
    
    
    
    
    
    
    Common stock, $.01 par value; 6,000,000 shares
authorized; 2007 - 4,628,320 shares issued,
2006 - 4,612,195 shares issued
    
    
    46
    
    
    
    46Additional paid-in capital
    
    
    27,272
    
    
    
    27,204Retained earnings
    
    
    2,002
    
    
    
    2,643Accumulated other comprehensive loss
    
    
    (211
    )
    
    
    (25
    )Treasury stock, at cost (2007 - 193,533 shares,
2006 - 68,533 shares)
    
    
    (1,613
    )
    
    
    (783
    )Total shareholders equity
    
    
    27,496
    
    
    
    29,085$
    259,920
    
    
    $
    236,028
  3.




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##### Table of Contents



Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest and dividend incomeLoans, including fees
    
    $
    3,776
    
    
    $
    2,867
    
    
    $
    7,314
    
    
    $
    5,168Securities
    
    
    400
    
    
    
    438
    
    
    
    776
    
    
    
    845Federal Home Loan Bank stock dividends
    
    
    32
    
    
    
    38
    
    
    
    72
    
    
    
    76Federal funds sold and other
    
    
    2
    
    
    
    2
    
    
    
    6
    
    
    
    254,210
    
    
    
    3,345
    
    
    
    8,168
    
    
    
    6,114Interest expenseDeposits
    
    
    1,718
    
    
    
    1,176
    
    
    
    3,387
    
    
    
    2,184Federal Home Loan Bank advances and other debt
    
    
    541
    
    
    
    348
    
    
    
    922
    
    
    
    485Subordinated debentures
    
    
    106
    
    
    
    104
    
    
    
    212
    
    
    
    1992,365
    
    
    
    1,628
    
    
    
    4,521
    
    
    
    2,868Net interest income
    
    
    1,845
    
    
    
    1,717
    
    
    
    3,647
    
    
    
    3,246Provision for loan losses
    
    
    107
    
    
    
    292
    
    
    
    142
    
    
    
    582Net interest income after provision for loan losses
    
    
    1,738
    
    
    
    1,425
    
    
    
    3,505
    
    
    
    2,664Noninterest incomeService charges on deposit accounts
    
    
    68
    
    
    
    54
    
    
    
    125
    
    
    
    105Net gains on sales of loans
    
    
    97
    
    
    
    95
    
    
    
    172
    
    
    
    127Loan servicing fees, net
    
    
    9
    
    
    
    31
    
    
    
    30
    
    
    
    45Net gains (losses) on sales of securities
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )Earnings on bank owned life insurance
    
    
    32
    
    
    
    31
    
    
    
    64
    
    
    
    63Other
    
    
    4
    
    
    
    11
    
    
    
    19
    
    
    
    62210
    
    
    
    217
    
    
    
    410
    
    
    
    397Noninterest expenseSalaries and employee benefits
    
    
    951
    
    
    
    906
    
    
    
    2,014
    
    
    
    1,835Occupancy and equipment
    
    
    123
    
    
    
    115
    
    
    
    242
    
    
    
    229Data processing
    
    
    149
    
    
    
    116
    
    
    
    283
    
    
    
    234Franchise taxes
    
    
    69
    
    
    
    45
    
    
    
    138
    
    
    
    92Professional fees
    
    
    105
    
    
    
    75
    
    
    
    193
    
    
    
    241Director fees
    
    
    38
    
    
    
    39
    
    
    
    75
    
    
    
    81Postage, printing and supplies
    
    
    42
    
    
    
    45
    
    
    
    93
    
    
    
    95Advertising and promotion
    
    
    72
    
    
    
    29
    
    
    
    96
    
    
    
    49Telephone
    
    
    24
    
    
    
    27
    
    
    
    53
    
    
    
    53Loan expenses
    
    
    2
    
    
    
    16
    
    
    
    7
    
    
    
    61Foreclosed assets, net
    
    
    4
    
    
    
    (7
    )
    
    
    10
    
    
    
    3Depreciation
    
    
    154
    
    
    
    119
    
    
    
    297
    
    
    
    224Other
    
    
    98
    
    
    
    95
    
    
    
    182
    
    
    
    1921,831
    
    
    
    1,620
    
    
    
    3,683
    
    
    
    3,389Income (loss) before income taxes
    
    
    117
    
    
    
    22
    
    
    
    232
    
    
    
    (328
    )Income tax expense (benefit)
    
    
    33
    
    
    
    16
    
    
    
    63
    
    
    
    (110
    )Net income (loss)
    
    $
    84
    
    
    $
    6
    
    
    $
    169
    
    
    $
    (218
    )Earnings (loss) per share:Basic
    
    $
    0.02
    
    
    $
    0.00
    
    
    $
    0.04
    
    
    $
    (0.05
    )Diluted
    
    $
    0.02
    
    
    $
    0.00
    
    
    $
    0.04
    
    
    $
    (0.05
    )
  4.




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AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    ShareholdersStock
    
    
    Capital
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance at January 1, 2007
    
    $
    46
    
    
    $
    27,204
    
    
    $
    2,643
    
    
    $
    (25
    )
    
    $
    (783
    )
    
    $
    29,085Comprehensive loss:Net income
    
    
    
    
    
    
    
    
    
    
    169
    
    
    
    
    
    
    
    
    
    
    
    169Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (186
    )
    
    
    
    
    
    
    (186
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )Release of 9,234 stock based incentive plan shares
    
    
    
    
    
    
    83
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83Tax benefits from dividends on unvested stock based
incentive plan shares
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Tax effect from vesting of stock based incentive plan shares
    
    
    
    
    
    
    (24
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24
    )Stock option expense
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Purchase of 125,000 treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (830
    )
    
    
    (830
    )Cash dividends declared ($.18 per share)
    
    
    
    
    
    
    
    
    
    
    (810
    )
    
    
    
    
    
    
    
    
    
    
    (810
    )Balance at June 30, 2007
    
    $
    46
    
    
    $
    27,272
    
    
    $
    2,002
    
    
    $
    (211
    )
    
    $
    (1,613
    )
    
    $
    27,496
  5.




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Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income (loss)
    
    $
    84
    
    
    $
    6
    
    
    $
    169
    
    
    $
    (218
    )Change in net unrealized gain (loss) on securities
available for sale
    
    
    (371
    )
    
    
    (346
    )
    
    
    (282
    )
    
    
    (550
    )Less: Reclassification adjustment for gains and
(losses) later recognized in net income
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )Net unrealized loss
    
    
    (371
    )
    
    
    (341
    )
    
    
    (282
    )
    
    
    (545
    )Tax effect
    
    
    126
    
    
    
    116
    
    
    
    96
    
    
    
    185Other comprehensive loss
    
    
    (245
    )
    
    
    (225
    )
    
    
    (186
    )
    
    
    (360
    )Comprehensive loss
    
    $
    (161
    )
    
    $
    (219
    )
    
    $
    (17
    )
    
    $
    (578
    )
  6.




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Six months endedJune 30,2007
    
    
    2006Cash flows from operating activities
    
    $
    1,984
    
    
    $
    (470
    )Cash flows from investing activitiesAvailable-for-sale securities:Sales
    
    
    
    
    
    
    4,395Maturities, prepayments and calls
    
    
    3,209
    
    
    
    3,257Purchases
    
    
    (4,873
    )
    
    
    (7,383
    )Loan originations and payments, net
    
    
    (19,370
    )
    
    
    (32,929
    )Loans purchased
    
    
    (5,145
    )
    
    
    (11,616
    )Proceeds from redemption of FHLB stock
    
    
    850
    
    
    
    Additions to premises and equipment
    
    
    (2,042
    )
    
    
    (165
    )Proceeds from the sale of premises and equipment
    
    
    9
    
    
    
    43Proceeds from the sale of foreclosed assets
    
    
    
    
    
    
    158Net cash from investing activities
    
    
    (27,362
    )
    
    
    (44,240
    )Cash flows from financing activitiesNet change in deposits
    
    
    9,506
    
    
    
    19,072Net change in short-term borrowings from the
Federal Home Loan Bank and other debt
    
    
    13,325
    
    
    
    11,454Proceeds from Federal Home Loan Bank
advances and other debt
    
    
    3,200
    
    
    
    5,000Repayments on Federal Home Loan Bank
advances and other debt
    
    
    (1,000
    )
    
    
    (3,000
    )Net change in advances by borrowers for
taxes and insurance
    
    
    (37
    )
    
    
    (1
    )Cash dividends paid
    
    
    (819
    )
    
    
    (611
    )Proceeds from issuance of common stock in public offering
    
    
    
    
    
    
    14,558Repurchase of common stock
    
    
    (830
    )
    
    
    Net cash from financing activities
    
    
    23,345
    
    
    
    46,472Net change in cash and cash equivalents
    
    
    (2,033
    )
    
    
    1,762Beginning cash and cash equivalents
    
    
    5,403
    
    
    
    2,972Ending cash and cash equivalents
    
    $
    3,370
    
    
    $
    4,734Supplemental cash flow information:Interest paid
    
    $
    4,352
    
    
    $
    2,863Income taxes paid
    
    
    15
    
    
    
    Supplemental noncash disclosures:Transfers from loans to repossessed assets
    
    $
    262
    
    
    $
    218
  7.




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NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
   Earnings Per Share
  8.




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##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
  Three months ended June 30,
    
    
    Six months ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006BasicNet income (loss)
    
    $
    84
    
    
    $
    6
    
    
    $
    169
    
    
    $
    (218
    )Weighted average common shares outstanding
    
    
    4,501,889
    
    
    
    4,524,051
    
    
    
    4,517,158
    
    
    
    4,374,493Basic earnings (loss) per common share
    
    $
    0.02
    
    
    $
    0.00
    
    
    $
    0.04
    
    
    $
    (0.05
    )DilutedNet income (loss)
    
    $
    84
    
    
    $
    6
    
    
    $
    169
    
    
    $
    (218
    )Weighted average common shares outstanding for
basic earnings (loss) per share
    
    
    4,501,889
    
    
    
    4,524,051
    
    
    
    4,517,158
    
    
    
    4,374,493Add: Dilutive effects of assumed exercises of
stock options and stock based incentive plan
shares
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    Average shares and dilutive potential common shares
    
    
    4,501,889
    
    
    
    4,524,051
    
    
    
    4,517,179
    
    
    
    4,374,493Diluted earnings (loss) per common share
    
    $
    0.02
    
    
    $
    0.00
    
    
    $
    0.04
    
    
    $
    (0.05
    )
  Three months ended June 30,
    
    
    Six months ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Stock options
    
    
    294,622
    
    
    
    278,272
    
    
    
    287,505
    
    
    
    280,372Stock based incentive plan shares
    
    
    20,663
    
    
    
    16,304
    
    
    
    20,163
    
    
    
    18,566
 Reclassifications:
  9.




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NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Adoption of New Accounting Standards:
 Accounting for Certain Hybrid Financial Instruments-an amendment to FASB Statements No. 133 and
140
 Accounting for Servicing of Financial Assets.
 Accounting for Uncertainty in Income
Taxes  an interpretation of FASB Statement No. 109
 Accounting for
Purchases of Life Insurance  Determining the Amount That Could Be Realized in Accordance with FASB
Technical Bulletin No. 85-4 (Accounting for Purchases of Life Insurance).
 Effect of Newly Issued But Not Yet Effective Accounting Standards:
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilites, including an amendment of FASB Statement No. 115
 10.




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NOTE 2  LOANS
  June 30,
    
    
    December 31,2007
    
    
    2006Commercial
    
    $
    28,489
    
    
    $
    31,913Real estate:Single-family residential
    
    
    29,652
    
    
    
    30,209Multi-family residential
    
    
    41,330
    
    
    
    47,247Commercial
    
    
    81,159
    
    
    
    47,474Consumer
    
    
    30,827
    
    
    
    30,246Subtotal
    
    
    211,457
    
    
    
    187,089Less: Net deferred loan fees
    
    
    (351
    )
    
    
    (285
    )Allowance for loan losses
    
    
    (2,272
    )
    
    
    (2,109
    )Loans, net
    
    $
    208,834
    
    
    $
    184,695
   Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Beginning balance
    
    $
    2,150
    
    
    $
    1,730
    
    
    $
    2,109
    
    
    $
    1,495Provision for loan losses
    
    
    107
    
    
    
    292
    
    
    
    142
    
    
    
    582Loans charged-off
    
    
    (1
    )
    
    
    (80
    )
    
    
    (9
    )
    
    
    (150
    )Recoveries
    
    
    16
    
    
    
    46
    
    
    
    30
    
    
    
    61Ending balance
    
    $
    2,272
    
    
    $
    1,988
    
    
    $
    2,272
    
    
    $
    1,988
  June 30,
    
    
    December 31,2007
    
    
    2006Loans past due over 90 days still on accrual
    
    $
    
    
    
    $
    Nonaccrual loans
    
    
    168
    
    
    
    297
  11.




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NOTE 3  STOCK COMPENSATION PLANS
   Stock Options
    Six months endedJune 30, 2007Risk-free interest rate
    
    
    4.68
    %Expected option life (years)
    
    
    6Expected stock price volatility
    
    
    23
    %Dividend yield
    
    
    4.90
    %
 12.




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##### Table of Contents



NOTE 3  STOCK COMPENSATION PLANS (continued)
  Six months ended June 30, 2007WeightedWeighted
    
    
    AverageAverage
    
    
    RemainingExercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Term (Years)
    
    
    ValueOptions outstanding, beginning of period
    
    
    273,272
    
    
    $
    11.23
    
    
    
    6.7Granted
    
    
    21,350
    
    
    
    7.35
    
    
    
    9.6Exercised
    
    
    
    
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    
    
    
    
    Options outstanding, end of period
    
    
    294,622
    
    
    $
    10.95
    
    
    
    6.4
    
    
    $
    Options exercisable, end of period
    
    
    273,272
    
    
    $
    11.23
    
    
    
    6.2
    
    
    $
    
  Three months ended June 30,
    
    
    Six months ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Intrinsic value of options exercised
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Cash received from option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Related tax benefit realized from
option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average fair value of
options granted
    
    
    
    
    
    
    
    
    
    
    1.19
    
    
    
    
  13.




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##### Table of Contents



NOTE 3  STOCK COMPENSATION PLANS (continued)
 Restricted Stock Awards
   Six months ended June 30, 2007WeightedAverage Grant-Shares
    
    
    Date Fair ValueNonvested shares outstanding at beginning of period
    
    
    29,552
    
    
    $
    11.36Granted
    
    
    18,250
    
    
    
    7.35Vested
    
    
    (15,277
    )
    
    
    12.05Forfeited
    
    
    
    
    
    
    Nonvested shares outstanding at end of period
    
    
    32,525
    
    
    $
    8.79
  14.




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NOTE 4  FEDERAL HOME LOAN BANK ADVANCES
  June 30, 2007
    
    
    December 31, 2006Maturity July 2007 at 5.31% floating rate
    
    $
    34,575
    
    
    $
    Maturity January 2007 at 5.18% floating rate
    
    
    
    
    
    
    21,250Maturities July 2007 thru March 2010, fixed
at rates from 2.69% to 5.60%, averaging
4.51% at June 30, 2007, and maturities
March 2007 thru June 2009, fixed at rates
from 2.44% to 5.60%, averaging 4.16% at
December 31, 2006
    
    
    13,470
    
    
    
    11,270Total
    
    $
    48,045
    
    
    $
    32,520
   June 30, 2007
    
    
    December 31, 2006First mortgage loans under a blanket lien arrangement
    
    $
    26,282
    
    
    $
    30,422Second mortgage loans
    
    
    586
    
    
    
    679Multi-family mortgage loans
    
    
    16,663
    
    
    
    12,580Home equity lines of credit
    
    
    9,429
    
    
    
    10,495Commercial real estate loans
    
    
    52,294
    
    
    
    35,028Securities
    
    
    20,655
    
    
    
    10,748Total
    
    $
    125,909
    
    
    $
    99,952
  Payment information
 Required payments over the next five years are:June 30, 2008
    
    $
    38,845June 30, 2009
    
    
    8,200June 30, 2010
    
    
    1,000Total
    
    $
    48,045
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NOTE 5  INCOME TAXES
 Accounting for Uncertainty in Income Taxes,
 NOTE 6  SEGMENT INFORMATION
   Mortgage
    
    
    
    
    
    
    ConsolidatedBanking
    
    
    Banking
    
    
    Parent and Other
    
    
    TotalFor the three months ended June 30, 2007:Net interest income (expense)
    
    $
    1,933
    
    
    $
    18
    
    
    $
    (106
    )
    
    $
    1,845Provision for loan losses
    
    
    (107
    )
    
    
    
    
    
    
    
    
    
    
    (107
    )Net gain (loss) on sales of loans
    
    
    (18
    )
    
    
    115
    
    
    
    
    
    
    
    97Other revenue
    
    
    113
    
    
    
    (7
    )
    
    
    7
    
    
    
    113Depreciation and amortization
    
    
    (153
    )
    
    
    (1
    )
    
    
    
    
    
    
    (154
    )Other expense
    
    
    (1,510
    )
    
    
    (78
    )
    
    
    (89
    )
    
    
    (1,677
    )Income (loss) before income tax
    
    
    258
    
    
    
    47
    
    
    
    (188
    )
    
    
    117Income tax expense (benefit)
    
    
    80
    
    
    
    17
    
    
    
    (64
    )
    
    
    33Net income (loss)
    
    $
    178
    
    
    $
    30
    
    
    $
    (124
    )
    
    $
    84For the three months ended June 30, 2006:Net interest income (expense)
    
    $
    1,792
    
    
    $
    29
    
    
    $
    (104
    )
    
    $
    1,717Provision for loan losses
    
    
    (292
    )
    
    
    
    
    
    
    
    
    
    
    (292
    )Net gain (loss) on sales of loans
    
    
    (53
    )
    
    
    148
    
    
    
    
    
    
    
    95Other revenue
    
    
    116
    
    
    
    
    
    
    
    6
    
    
    
    122Depreciation and amortization
    
    
    (100
    )
    
    
    (19
    )
    
    
    
    
    
    
    (119
    )Other expense
    
    
    (1,279
    )
    
    
    (138
    )
    
    
    (84
    )
    
    
    (1,501
    )Income (loss) before income tax
    
    
    184
    
    
    
    20
    
    
    
    (182
    )
    
    
    22Income tax expense (benefit)
    
    
    70
    
    
    
    7
    
    
    
    (61
    )
    
    
    16Net income (loss)
    
    $
    114
    
    
    $
    13
    
    
    $
    (121
    )
    
    $
    6
 16.




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NOTE 6  SEGMENT INFORMATION (continued)
 Banking
    
    
    Mortgage Banking
    
    
    Parent and Other
    
    
    Consolidated TotalFor the six months ended June 30, 2007:Net interest income (expense)
    
    $
    3,818
    
    
    $
    41
    
    
    $
    (212
    )
    
    $
    3,647Provision for loan losses
    
    
    (142
    )
    
    
    
    
    
    
    
    
    
    
    (142
    )Net gain (loss) on sales of loans
    
    
    (48
    )
    
    
    220
    
    
    
    
    
    
    
    172Other revenue
    
    
    230
    
    
    
    (7
    )
    
    
    15
    
    
    
    238Depreciation and amortization
    
    
    (289
    )
    
    
    (8
    )
    
    
    
    
    
    
    (297
    )Other expense
    
    
    (2,996
    )
    
    
    (207
    )
    
    
    (183
    )
    
    
    (3,386
    )Income (loss) before income tax
    
    
    573
    
    
    
    39
    
    
    
    (380
    )
    
    
    232Income tax expense (benefit)
    
    
    178
    
    
    
    14
    
    
    
    (129
    )
    
    
    63Net income (loss)
    
    $
    395
    
    
    $
    25
    
    
    $
    (251
    )
    
    $
    169June 30, 2007Segment assets
    
    $
    257,318
    
    
    $
    857
    
    
    $
    1,745
    
    
    $
    259,920For the six months ended June 30, 2006:Net interest income (expense)
    
    $
    3,397
    
    
    $
    48
    
    
    $
    (199
    )
    
    $
    3,246Provision for loan losses
    
    
    (582
    )
    
    
    
    
    
    
    
    
    
    
    (582
    )Net gain (loss) on sales of loans
    
    
    (54
    )
    
    
    181
    
    
    
    
    
    
    
    127Other revenue
    
    
    259
    
    
    
    (3
    )
    
    
    14
    
    
    
    270Depreciation and amortization
    
    
    (198
    )
    
    
    (26
    )
    
    
    
    
    
    
    (224
    )Other expense
    
    
    (2,692
    )
    
    
    (295
    )
    
    
    (178
    )
    
    
    (3,165
    )Income (loss) before income tax
    
    
    130
    
    
    
    (95
    )
    
    
    (363
    )
    
    
    (328
    )Income tax expense (benefit)
    
    
    45
    
    
    
    (32
    )
    
    
    (123
    )
    
    
    (110
    )Net income (loss)
    
    $
    85
    
    
    $
    (63
    )
    
    $
    (240
    )
    
    $
    (218
    )June 30, 2006Segment assets
    
    $
    214,909
    
    
    $
    2,963
    
    
    $
    1,148
    
    
    $
    219,020
 NOTE 7  ARBITRATION
  17.




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Forward-Looking Statements
   Business Overview
   General
  Management Strategy
 st
 18.




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nd nd
 nd nd
  Financial Condition
 General.
 Securities.
 Loans.
 Deposits.
 FHLB advances.
 19.




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##### Table of Contents



Shareholders equity.
  Comparison
of the Results of Operations for the Three Months Ended June 30,
2007 and 2006
 General.
 Net interest income.
   20.




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##### Table of Contents



Provision for loan losses.
 nd nd
  Noninterest income.
 21.




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##### Table of Contents



Noninterest expense.
  Income taxes.
 Comparison
of the Results of Operations for the Six Months Ended June 30,
2007 and 2006
 General.
 Net interest income.
  22.




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Provision for loan losses.
 Noninterest income.
 Noninterest expense.
 23.




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Income taxes.
 Critical Accounting Policies
    Liquidity and Capital Resources
   24.




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25.




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##### Table of Contents



Evaluation of disclosure controls and procedures.
 Changes in internal control over financial reporting
 26.




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Maximum Number(or ApproximateTotal Number of
    
    
    Dollar Value) ofShares (or Units)
    
    
    Shares (or Units)Average
    
    
    Purchased as Part
    
    
    that May Yet BeTotal Number of
    
    
    Price Paid
    
    
    of Publicly
    
    
    Purchased UnderShares (or Units)
    
    
    per Share
    
    
    Announced Plans
    
    
    the Plans orPeriod
    
    Purchased
    
    
    (or Unit)
    
    
    or Programs
    
    
    ProgramsApril 1 - 30, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    May 1 - 31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    June 1 - 30, 2007
    
    
    125,000
    (1)
    
    $
    6.64
    
    
    
    
    
    
    
    400,000
    (2)
 
 (1)
    
    These shares were purchased in an open market transaction and were not part of the publicly announced program.(2)
    
    On June 22, 2007, the Company announced a 400,000 share repurchase program to begin on June 26, 2007. 
   Election of Directors:
 Nominee
    
    For
    
    
    Vote WithheldThomas P. Ash
    
    
    3,913,226
    
    
    
    112,543David C. Vernon
    
    
    3,783,459
    
    
    
    242,310Jerry F. Whitmer
    
    
    3,901,595
    
    
    
    124,174
 In addition to the foregoing, the following directors continued in office after the meeting, each
until the annual meeting in the year indicated:
 Continuing Director
    
    YearJeffrey W. Aldrich
    
    
    2009Mark S. Allio
    
    
    2009William R. Downing
    
    
    2008Gerry W. Grace
    
    
    2008
 27.




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Approval of the Third Amended and Restated 2003 Equity Compensation Plan:
 For
    
    Against
    
    Abstain
    
    Broker Non-Vote1,834,971
    
    804,431
    
    25,390
    
    1,308,577
 Ratification of the appointment of Crowe Chizek and Company LLC as independent auditors of the
Company for the year ending December 31, 2007:
 For
    
    
    3,988,290Against
    
    
    33,579Abstain
    
    
    3,900
  
  (a) ExhibitNumber
    
    Exhibit3.1*
    
    Certificate of Incorporation3.2*
    
    Bylaws4.0*
    
    Form of Common Stock Certificate10.1
    
    Third Amended and Restated Central Federal Corporation 2003 Equity
Compensation Plan11.1
    
    Statement Re: Computation of Per Share Earnings31.1
    
    Rule 13a-14(a) Certifications of the Chief Executive Officer31.2
    
    Rule 13a-14(a) Certifications of the Chief Financial Officer32.1
    
    Section 1350 Certifications of the Chief Executive Officer and
Chief Financial Officer
 
 *
    
    Incorporated by reference to the Exhibits included with the registrants
Registration Statement on Form
SB-2 No. 333-64089, filed with the Commission on September 23, 1998 28.




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CENTRAL FEDERAL CORPORATIONDated:  August 13, 2007
    By:
    /s/ Mark S. AllioMark S. AllioChairman of the Board,
President and
Chief Executive Officer Dated:  August 13, 2007
    By:
    /s/ Therese Ann LiutkusTherese Ann Liutkus, CPATreasurer and Chief Financial Officer 29.