##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 o
    
    TRANSITION REPORT PURSUANT TO 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
  incorporation or organization)
    
    (IRS Employer
Identification No.)
 2923 Smith Road, Fairlawn, Ohio 44333
 (Registrants telephone number, including area code)
 (Former name, former address and former fiscal year, if changed since last report)
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




---



##### 



PagePART I. Financial InformationItem 1. Financial Statements (Unaudited)Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007
    
    
    3Consolidated Statements of Operations for the three and six months ended
June 30, 2008 and 2007
    
    
    4Consolidated Statement of Changes in Shareholders Equity
for the six months ended June 30, 2008
    
    
    5Consolidated Statements of Comprehensive Income for the three and six
months ended June 30, 2008 and 2007
    
    
    6Condensed Consolidated Statements of Cash Flows for the six months ended
June 30, 2008 and 2007
    
    
    7Notes to Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 4T. Controls and Procedures
    
    
    25PART II. Other InformationItem 1. Legal Proceedings
    
    
    26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 4. Submission of Matters to a Vote of Security Holders
    
    
    26Item 6. Exhibits
    
    
    27Signatures
    
    
    28EX-11.1EX-31.1EX-31.2EX-32.1




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##### Table of Contents



June 30,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCash and cash equivalents
    
    $
    3,607
    
    
    $
    3,894Securities available for sale
    
    
    26,182
    
    
    
    28,398Loans held for sale
    
    
    1,805
    
    
    
    457Loans, net of allowance of $2,947 and $2,684
    
    
    230,823
    
    
    
    230,475Federal Home Loan Bank stock
    
    
    2,081
    
    
    
    1,963Loan servicing rights
    
    
    134
    
    
    
    157Foreclosed assets, net
    
    
    123
    
    
    
    86Premises and equipment, net
    
    
    5,404
    
    
    
    5,717Bank owned life insurance
    
    
    3,832
    
    
    
    3,769Deferred tax asset
    
    
    1,865
    
    
    
    1,995Accrued interest receivable and other assets
    
    
    2,766
    
    
    
    2,671$
    278,622
    
    
    
    279,582LIABILITIES AND SHAREHOLDERS EQUITYDepositsNoninterest bearing
    
    $
    13,458
    
    
    $
    12,151Interest bearing
    
    
    185,485
    
    
    
    182,157Total deposits
    
    
    198,943
    
    
    
    194,308Federal Home Loan Bank advances
    
    
    46,775
    
    
    
    49,450Advances by borrowers for taxes and insurance
    
    
    94
    
    
    
    154Accrued interest payable and other liabilities
    
    
    1,689
    
    
    
    3,136Subordinated debentures
    
    
    5,155
    
    
    
    5,155Total liabilities
    
    
    252,656
    
    
    
    252,203Shareholders equityPreferred stock, 1,000,000 shares authorized;
none issued
    
    
    
    
    
    
    Common stock, $.01 par value; 6,000,000 shares
authorized; 2008 - 4,661,195 shares issued,
2007 - 4,628,320 shares issued
    
    
    47
    
    
    
    46Additional paid-in capital
    
    
    27,388
    
    
    
    27,348Retained earnings
    
    
    1,326
    
    
    
    1,411Accumulated other comprehensive income
    
    
    111
    
    
    
    187Treasury stock, at cost; 2008 - 468,533 shares,
2007 - 193,533 shares
    
    
    (2,906
    )
    
    
    (1,613
    )Total shareholders equity
    
    
    25,966
    
    
    
    27,379$
    278,622
    
    
    $
    279,582
  3.




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##### Table of Contents



Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Interest and dividend incomeLoans, including fees
    
    $
    3,732
    
    
    $
    3,776
    
    
    $
    7,709
    
    
    $
    7,314Securities
    
    
    338
    
    
    
    400
    
    
    
    693
    
    
    
    776Federal Home Loan Bank stock dividends
    
    
    27
    
    
    
    32
    
    
    
    53
    
    
    
    72Federal funds sold and other
    
    
    3
    
    
    
    2
    
    
    
    4
    
    
    
    64,100
    
    
    
    4,210
    
    
    
    8,459
    
    
    
    8,168Interest expenseDeposits
    
    
    1,450
    
    
    
    1,718
    
    
    
    3,225
    
    
    
    3,387Federal Home Loan Bank advances and other debt
    
    
    358
    
    
    
    541
    
    
    
    798
    
    
    
    922Subordinated debentures
    
    
    73
    
    
    
    106
    
    
    
    173
    
    
    
    2121,881
    
    
    
    2,365
    
    
    
    4,196
    
    
    
    4,521Net interest income
    
    
    2,219
    
    
    
    1,845
    
    
    
    4,263
    
    
    
    3,647Provision for loan losses
    
    
    260
    
    
    
    107
    
    
    
    484
    
    
    
    142Net interest income after provision for loan losses
    
    
    1,959
    
    
    
    1,738
    
    
    
    3,779
    
    
    
    3,505Noninterest incomeService charges on deposit accounts
    
    
    87
    
    
    
    68
    
    
    
    169
    
    
    
    125Net gains on sales of loans
    
    
    61
    
    
    
    97
    
    
    
    97
    
    
    
    172Loan servicing fees, net
    
    
    7
    
    
    
    9
    
    
    
    18
    
    
    
    30Net gain on sales of securities
    
    
    21
    
    
    
    
    
    
    
    44
    
    
    
    Earnings on bank owned life insurance
    
    
    34
    
    
    
    32
    
    
    
    63
    
    
    
    64Other
    
    
    7
    
    
    
    4
    
    
    
    17
    
    
    
    19217
    
    
    
    210
    
    
    
    408
    
    
    
    410Noninterest expenseSalaries and employee benefits
    
    
    997
    
    
    
    951
    
    
    
    2,045
    
    
    
    2,014Occupancy and equipment
    
    
    112
    
    
    
    123
    
    
    
    218
    
    
    
    242Data processing
    
    
    145
    
    
    
    149
    
    
    
    290
    
    
    
    283Franchise taxes
    
    
    84
    
    
    
    69
    
    
    
    166
    
    
    
    138Professional fees
    
    
    95
    
    
    
    105
    
    
    
    165
    
    
    
    193Director fees
    
    
    34
    
    
    
    38
    
    
    
    68
    
    
    
    75Postage, printing and supplies
    
    
    44
    
    
    
    42
    
    
    
    95
    
    
    
    93Advertising and promotion
    
    
    15
    
    
    
    72
    
    
    
    27
    
    
    
    96Telephone
    
    
    22
    
    
    
    24
    
    
    
    44
    
    
    
    53Loan expenses
    
    
    1
    
    
    
    2
    
    
    
    8
    
    
    
    7Foreclosed assets, net
    
    
    9
    
    
    
    4
    
    
    
    8
    
    
    
    10Depreciation
    
    
    176
    
    
    
    154
    
    
    
    351
    
    
    
    297Other
    
    
    132
    
    
    
    98
    
    
    
    227
    
    
    
    1821,866
    
    
    
    1,831
    
    
    
    3,712
    
    
    
    3,683Income before income taxes
    
    
    310
    
    
    
    117
    
    
    
    475
    
    
    
    232Income tax expense
    
    
    86
    
    
    
    33
    
    
    
    127
    
    
    
    63Net income
    
    $
    224
    
    
    $
    84
    
    
    $
    348
    
    
    $
    169Earnings per share:Basic
    
    $
    0.05
    
    
    $
    0.02
    
    
    $
    0.08
    
    
    $
    0.04Diluted
    
    $
    0.05
    
    
    $
    0.02
    
    
    $
    0.08
    
    
    $
    0.04
  4.




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AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalPaid-In
    
    
    
    
    
    
    Comprehensive
    
    
    Treasury
    
    
    ShareholdersCommon Stock
    
    
    Capital
    
    
    Retained Earnings
    
    
    Income
    
    
    Stock
    
    
    EquityBalance at January 1, 2008
    
    $
    46
    
    
    $
    27,348
    
    
    $
    1,411
    
    
    $
    187
    
    
    $
    (1,613
    )
    
    $
    27,379Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    348
    
    
    
    
    
    
    
    
    
    
    
    348Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76
    )
    
    
    
    
    
    
    (76
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    272Issuance of 32,875 stock based incentive plan shares
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Release of 10,996 stock based incentive plan shares
    
    
    
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63Tax benefits from dividends on unvested stock based incentive plan shares
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Tax effect from vesting of stock based incentive plan shares
    
    
    
    
    
    
    (33
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33
    )Stock option expense
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9Purchase of 275,000 treasury shares at $4.70 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,293
    )
    
    
    (1,293
    )Cash dividends declared ($.10 per share)
    
    
    
    
    
    
    
    
    
    
    (433
    )
    
    
    
    
    
    
    
    
    
    
    (433
    )Balance at June 30, 2008
    
    $
    47
    
    
    $
    27,388
    
    
    $
    1,326
    
    
    $
    111
    
    
    $
    (2,906
    )
    
    $
    25,966
  5.




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##### Table of Contents



Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    224
    
    
    $
    84
    
    
    $
    348
    
    
    $
    169Change in net unrealized gain (loss) on
securities
available for sale
    
    
    (487
    )
    
    
    (371
    )
    
    
    (72
    )
    
    
    (282
    )Less: Reclassification adjustment for gains
later recognized in net income
    
    
    (21
    )
    
    
    
    
    
    
    (44
    )
    
    
    Net unrealized gain (loss)
    
    
    (508
    )
    
    
    (371
    )
    
    
    (116
    )
    
    
    (282
    )Tax effect
    
    
    174
    
    
    
    126
    
    
    
    40
    
    
    
    96Other comprehensive loss
    
    
    (334
    )
    
    
    (245
    )
    
    
    (76
    )
    
    
    (186
    )Comprehensive income (loss)
    
    $
    (110
    )
    
    $
    (161
    )
    
    $
    272
    
    
    $
    (17
    )
  6.




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##### Table of Contents



Six months endedJune 30,2008
    
    
    2007Cash flows from operating activities
    
    $
    (1,658
    )
    
    $
    1,984Cash flows from investing activitiesAvailable-for-sale securities:Sales
    
    
    1,053
    
    
    
    Maturities, prepayments and calls
    
    
    7,121
    
    
    
    3,209Purchases
    
    
    (5,963
    )
    
    
    (4,873
    )Loan originations and payments, net
    
    
    (916
    )
    
    
    (19,370
    )Loans purchased
    
    
    
    
    
    
    (5,145
    )Proceeds from redemption of FHLB stock
    
    
    
    
    
    
    850Purchase of FHLB stock
    
    
    (65
    )
    
    
    Additions to premises and equipment
    
    
    (38
    )
    
    
    (2,042
    )Proceeds from the sale of premises and equipment
    
    
    2
    
    
    
    9Proceeds from the sale of foreclosed assets
    
    
    86
    
    
    
    Net cash from investing activities
    
    
    1,280
    
    
    
    (27,362
    )Cash flows from financing activitiesNet change in deposits
    
    
    4,564
    
    
    
    9,506Net change in short-term borrowings from the FHLB and other debt
    
    
    (12,675
    )
    
    
    13,325Proceeds from FHLB advances and other debt
    
    
    11,000
    
    
    
    3,200Repayments on FHLB advances and other debt
    
    
    (1,000
    )
    
    
    (1,000
    )Net change in advances by borrowers for taxes and insurance
    
    
    (60
    )
    
    
    (37
    )Cash dividends paid
    
    
    (445
    )
    
    
    (819
    )Repurchase of common stock
    
    
    (1,293
    )
    
    
    (830
    )Net cash from financing activities
    
    
    91
    
    
    
    23,345Net change in cash and cash equivalents
    
    
    (287
    )
    
    
    (2,033
    )Beginning cash and cash equivalents
    
    
    3,894
    
    
    
    5,403Ending cash and cash equivalents
    
    $
    3,607
    
    
    
    3,370Supplemental cash flow information:Interest paid
    
    $
    4,181
    
    
    $
    4,352Income taxes paid
    
    
    30
    
    
    
    15Supplemental noncash disclosures:Transfers from loans to repossessed assets
    
    $
    123
    
    
    $
    262
  7.




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##### Table of Contents



NOTE 1
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
   Earnings Per Share
   Three months ended June 30,
    
    
    Six months ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007BasicNet income
    
    $
    224
    
    
    $
    84
    
    
    $
    348
    
    
    $
    169Weighted average common shares outstanding
    
    
    4,298,000
    
    
    
    4,501,889
    
    
    
    4,340,730
    
    
    
    4,517,158Basic earnings per common share
    
    $
    0.05
    
    
    $
    0.02
    
    
    $
    0.08
    
    
    $
    0.04DilutedNet income
    
    $
    224
    
    
    $
    84
    
    
    $
    348
    
    
    $
    169Weighted average common shares
outstanding for basic earnings per share
    
    
    4,298,000
    
    
    
    4,501,889
    
    
    
    4,340,730
    
    
    
    4,517,158Add: Dilutive effects of assumed
exercises of stock options and stock
based incentive plan shares
    
    
    4,154
    
    
    
    
    
    
    
    2,290
    
    
    
    21Average shares and dilutive potential
common shares
    
    
    4,302,154
    
    
    
    4,501,889
    
    
    
    4,343,020
    
    
    
    4,517,179Diluted earnings per common share
    
    $
    0.05
    
    
    $
    0.02
    
    
    $
    0.08
    
    
    $
    0.04
 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 30,2008
    
    2007
    
    2008
    
    2007Stock options
    
    
    296,400
    
    
    
    294,622
    
    
    
    295,511
    
    
    
    287,505Stock based incentive plan shares
    
    
    34,860
    
    
    
    20,663
    
    
    
    27,035
    
    
    
    20,163
 Operating Segments:
  Adoption of New Accounting Standards:
 Fair Value Option and Fair Value Measurements
 Fair Value Measurements Effective Date of FASB Statement
No. 157.
 The Fair Value Option for Financial Assets and
Financial Liabilities.
 9.




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##### Table of Contents



NOTE 1
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
           10.




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##### Table of Contents



NOTE 1
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
  Fair Value Measurements at June 30, 2008 UsingQuoted Prices inActive Markets
    
    
    
    
    
    
    Significantfor Identical
    
    
    Significant Other
    
    
    UnobservableAssets
    
    
    Observable Inputs
    
    
    InputsJune 30, 2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Available for sale securities
    
    $
    26,182
    
    
    $
    
    
    
    $
    26,182
    
    
    $
    
  Fair Value Measurements at June 30, 2008 UsingQuoted Prices inActive Markets
    
    
    
    
    
    
    Significantfor Identical
    
    
    Significant Other
    
    
    UnobservableAssets
    
    
    Observable Inputs
    
    
    InputsJune 30, 2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Loan servicing rights
    
    $
    134
    
    
    $
    
    
    
    $
    134
    
    
    $
    
  Accounting for
Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance
Arrangements
 Written Loan
Commitments Recorded at Fair Value through Earnings Application of Accounting Principles to Loan Commitments (SAB 105)
 11.




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##### Table of Contents



NOTE 1
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Share-Based
Payment
 Effect of Newly Issued But Not Yet Effective Accounting Standards:
 , Business
Combinations
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51
 Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities
 12.




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##### Table of Contents



NOTE 2
 LOANS
  June 30,
    
    
    December 31,2008
    
    
    2007Commercial
    
    $
    38,186
    
    
    $
    35,334Real estate:Single-family residential
    
    
    30,854
    
    
    
    31,082Multi-family residential
    
    
    42,608
    
    
    
    43,789Commercial
    
    
    96,229
    
    
    
    95,088Consumer
    
    
    26,314
    
    
    
    28,248Subtotal
    
    
    234,191
    
    
    
    233,541Less: Net deferred loan fees
    
    
    (421
    )
    
    
    (382
    )Allowance for loan losses
    
    
    (2,947
    )
    
    
    (2,684
    )Loans, net
    
    $
    230,823
    
    
    $
    230,475
   Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Beginning balance
    
    $
    2,729
    
    
    $
    2,150
    
    
    $
    2,684
    
    
    $
    2,109Provision for loan losses
    
    
    260
    
    
    
    107
    
    
    
    484
    
    
    
    142Loans charged-off
    
    
    (46
    )
    
    
    (1
    )
    
    
    (226
    )
    
    
    (9
    )Recoveries
    
    
    4
    
    
    
    16
    
    
    
    5
    
    
    
    30Ending balance
    
    $
    2,947
    
    
    $
    2,272
    
    
    $
    2,947
    
    
    $
    2,272
  June 30,
    
    
    December 31,2008
    
    
    2007Period-end loans with no allocated allowance for loan losses
    
    $
    1,910
    
    
    $
    Period-end loans with allocated allowance for loan losses
    
    
    
    
    
    
    Total
    
    $
    1,910
    
    
    $
    
 13.




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##### Table of Contents



NOTE 2
 LOANS (continued)
 Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Average of individually impaired loans
during the period
    
    $
    1,694
    
    
    $
    
    
    
    $
    1,269
    
    
    $
    Interest income recognized during impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash-basis interest income recognized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  June 30,
    
    December 31,2008
    
    2007Loans past due over 90 days still on accrual
    
    $
    
    
    
    $
    97Nonaccrual loans
    
    
    1,972
    
    
    
    391
  NOTE 3
 STOCK COMPENSATION PLANS
   Stock Options
  14.




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##### Table of Contents



NOTE 3
 STOCK COMPENSATION PLANS (continued)
   Three months ended
    
    Six months endedJune 30,
    
    June 30,2008
    
    2007
    
    2008
    
    2007Risk-free interest rate
    
    
    3.10
    %
    
    
    
    
    
    
    2.46
    %
    
    
    4.68
    %Expected term (years)
    
    
    6
    
    
    
    
    
    
    
    6
    
    
    
    6Expected stock price volatility
    
    
    22
    %
    
    
    
    
    
    
    23
    %
    
    
    23
    %Dividend yield
    
    
    4.30
    %
    
    
    
    
    
    
    4.87
    %
    
    
    4.90
    %
  Six months ended June 30, 2008WeightedAverageWeighted
    
    
    RemainingAverage
    
    
    ContractualExercise
    
    
    Term
    
    
    IntrinsicShares
    
    
    Price
    
    
    (Years)
    
    
    ValueOptions outstanding, beginning of period
    
    
    299,622
    
    
    $
    10.94
    
    
    
    6.0
    
    
    $
    Granted
    
    
    43,975
    
    
    
    4.11Exercised
    
    
    
    
    
    
    
    
    
    
    Forfeited or expired
    
    
    (6,167
    )
    
    
    9.57
    
    
    
    9.6
    
    
    
    Options outstanding, end of period
    
    
    337,430
    
    
    $
    10.16
    
    
    
    6.0
    
    
    $
    Options exercisable, end of period
    
    
    280,388
    
    
    $
    11.13
    
    
    
    5.0
    
    
    $
    
 15.




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NOTE 3
 STOCK COMPENSATION PLANS (continued)
  Three months ended June 30,
    
    Six months ended June 30,2008
    
    2007
    
    2008
    
    2007Intrinsic value of options exercised
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Cash received from option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Related tax benefit realized from option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average fair value of options granted
    
    $
    0.66
    
    
    
    
    
    
    $
    0.51
    
    
    $
    1.19
  Restricted Stock Awards
   Six months ended June 30, 2008WeightedAverage Grant-Shares
    
    
    Date Fair ValueNonvested shares outstanding at beginning of period
    
    
    32,525
    
    
    $
    8.79Granted
    
    
    32,875
    
    
    
    4.03Vested
    
    
    (14,692
    )
    
    
    8.86Forfeited
    
    
    
    
    
    
    Nonvested shares outstanding at end of period
    
    
    50,708
    
    
    $
    5.68
  16.




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##### Table of Contents



NOTE 4
 FEDERAL HOME LOAN BANK ADVANCES
  June 30, 2008
    
    
    December 31, 2007Maturity July 2008 at 2.10% floating rate
    
    $
    25,575
    
    
    $
    Maturity January 2008 at 4.00% floating rate
    
    
    
    
    
    
    38,250Maturities September 2008 thru April 2011,
fixed at rates from 2.48% to 5.60%,
averaging 3.96% at June 30, 2008, and
maturities March 2008 thru March 2010,
fixed at rates from 2.90% to 5.60%,
averaging 4.89% at December 31, 2007
    
    
    21,200
    
    
    
    11,200Total
    
    $
    46,775
    
    
    $
    49,450
   June 30, 2008
    
    
    December 31, 2007First mortgage loans under a blanket lien arrangement
    
    $
    28,026
    
    
    $
    26,649Second mortgage loans
    
    
    509
    
    
    
    577Multi-family mortgage loans
    
    
    20,593
    
    
    
    15,227Home equity lines of credit
    
    
    9,958
    
    
    
    9,918Commercial real estate loans
    
    
    62,018
    
    
    
    62,287Securities
    
    
    14,143
    
    
    
    15,401Total
    
    $
    135,247
    
    
    $
    130,059
  Payment information
 Required payments over the next five years are:June 30, 2009
    
    $
    33,775June 30, 2010
    
    
    10,000June 30, 2011
    
    
    3,000Total
    
    $
    46,775
 17.




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##### Table of Contents



Forward-Looking Statements
  Business Overview
   General
   18.




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##### Table of Contents



Financial Condition
 General.
 Securities.
 Loans.
 Deposits
 Federal Home Loan Bank advances.
 Shareholders equity.
 Comparison of the Results of Operations for the Three Months Ended June 30, 2008 and 2007
 General.
 Net interest income.
 Interest income.
 19.




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##### Table of Contents



Interest expense.
 Provision for loan losses
  Noninterest income.
 20.




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##### Table of Contents



Noninterest expense.
 Income taxes.
 Comparison of the Results of Operations for the Six Months Ended June 30, 2008 and 2007
 General.
 Net interest income.
 Interest income.
 21.




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##### Table of Contents



Interest expense.
 Provision for loan losses. Provision for loan losses.
 Noninterest income.
 Noninterest expense.
 Income taxes.
 22.




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##### Table of Contents



Critical Accounting Policies
  Provision for Loan Losses
  Liquidity and Capital Resources
    23.




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##### Table of Contents



24.




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##### Table of Contents



Evaluation of disclosure controls and procedures.
 Changes in internal control over financial reporting.
 25.




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##### Table of Contents



Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  MaximumTotal Number
    
    Number (orof Shares (or
    
    ApproximateUnits)
    
    Dollar Value) ofPurchased as
    
    Shares (orPart of
    
    Units) that MayPublicly
    
    Yet BeTotal Number of
    
    Average
    
    Announced
    
    PurchasedShares (or Units)
    
    Price Paid
    
    Plans or
    
    Under the PlansPeriod
    
    Purchased
    
    per Share (or Unit)
    
    Programs
    
    or ProgramsApril 1  30, 2008
    
    275,000 (1)
    
    $
    4.70
    
    
    
    275,000
    
    
    125,000 (2)May 1  31, 2008
    


    
    
    
    
    
    
    
    
    

June 1  30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)These shares were purchased in a privately negotiated transaction.(2)A 400,000 share repurchase program was announced on June 26, 2007 and expires July 30, 2008. Item 4. Submission of Matters to a Vote of Security Holders
   Nominee
    
    For
    
    Votes WithheldWilliam R. Downing
    
    
    3,728,991
    
    
    
    181,724Gerry W. Grace
    
    
    3,718,158
    
    
    
    192,557
  Continuing Director
    
    YearJeffrey W. Aldrich
    
    
    2009Mark S. Allio
    
    
    2009Thomas P. Ash
    
    
    2010David C. Vernon
    
    
    2010Jerry F. Whitmer
    
    
    2010
 26.




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders (continued)
  For
    
    
    3,744,868Against
    
    
    145,251Abstain
    
    
    20,596
  
 Item 6. Exhibits
  Number
    
    Exhibit3.1*
    
    Certificate of Incorporation3.2**
    
    Amendment to Certificate of Incorporation of the registrant3.2***
    
    Second Amended and Restated Bylaws of the registrant4.0*
    
    Form of Common Stock Certificate11.1
    
    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**
    
    Incorporated by reference to the Exhibits included with the registrants Registration
Statement on Form S-2 No. 333-129315 filed with the Commission on October 28, 2005***
    
    Incorporated by reference to Exhibit 3.3 to the registrants Form 10-K for the fiscal year
ended December 31, 2007 27.




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##### Table of Contents



CENTRAL FEDERAL CORPORATIONDated:  August 13, 2008
    By:
    /s/ Mark S. AllioMark S. AllioChairman of the Board, President and
Chief Executive OfficerDated:  August 13, 2008
    By:
    /s/ Therese Ann LiutkusTherese Ann Liutkus, CPATreasurer and Chief Financial Officer 28.