C&F Financial Corporation (the Corporation) (NASDAQ: CFFI), the
one-bank holding company for C&F Bank, today reported
consolidated net income of $6.4 million for the second quarter of
2023, which represents a decrease of $399,000, or 5.9 percent, as
compared to the second quarter of 2022. The Corporation reported
consolidated net income of $12.9 million for the first six months
of 2023, which represents an increase of $363,000, or 2.9 percent,
as compared to the first six months of 2022. The following table
presents selected financial performance highlights for the periods
indicated:
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For The Quarter Ended |
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For The Six Months Ended |
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Consolidated Financial Highlights (unaudited) |
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6/30/2023 |
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6/30/2022 |
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6/30/2023 |
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6/30/2022 |
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| Consolidated net income
(000's) |
|
$ |
6,384 |
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$ |
6,783 |
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$ |
12,881 |
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$ |
12,518 |
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| Earnings per share - basic and
diluted |
|
$ |
1.84 |
|
|
$ |
1.91 |
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$ |
3.70 |
|
|
$ |
3.49 |
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| |
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| Annualized return on average
equity |
|
|
12.51 |
% |
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13.80 |
% |
|
|
12.69 |
% |
|
|
12.36 |
% |
| Annualized return on average
tangible common equity1 |
|
|
14.43 |
% |
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|
16.15 |
% |
|
|
14.68 |
% |
|
|
14.33 |
% |
| Annualized return on average
assets |
|
|
1.06 |
% |
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|
1.16 |
% |
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|
1.08 |
% |
|
|
1.09 |
% |
________________________1 For more information about this
non-GAAP financial measure, which is not calculated in accordance
with generally accepted accounting principles (GAAP), please see
“Use of Certain Non-GAAP Financial Measures” and “Reconciliation of
Certain Non-GAAP Financial Measures,” below.
“We are very pleased with our second quarter
results,” commented Tom Cherry, President and Chief Executive
Officer of C&F Financial Corporation. “Similar to the first
quarter, each of our three business segments was profitable, but
the changing economy continues to affect them differently. Earnings
at our mortgage banking and consumer finance segments were down,
compared to the same period last year, due to the effect of higher
interest rates on mortgage loan originations and borrowing costs,
respectively. Earnings at our community banking segment continue to
grow as a result of higher net interest income, primarily due to
higher interest rates and an increase in loans outstanding.”
“Although we believe that the anxiety within the
banking industry resulting from bank failures in the first quarter
has calmed, there are still uncertainties with the economy as a
whole. Questions remain regarding potential future interest rate
increases and the impact on our net interest margin and mortgage
loan originations, and the impact of a potential recession on
demand for new loans and asset quality. However, we are confident
in our diversified business strategy and the strength of our
balance sheet, including our current asset quality, capital, core
deposits, and overall liquidity.”
Key highlights for the second quarter and first
six months of 2023 are as follows.
- Community banking segment loans
grew $51.5 million, or 8.9 percent annualized, and $139.1 million,
or 13.0%, compared to December 31, 2022 and June 30, 2022,
respectively;
- Consumer finance segment loans grew
$471,000, or less than 1 percent annualized, and $38.0 million, or
8.7%, compared to December 31, 2022 and June 30, 2022,
respectively;
- Deposits decreased $6.4 million, or
less than 1 percent annualized, and decreased $8.5 million, or less
than one percent, compared to December 31, 2022 and June 30, 2022,
respectively;
- The community banking segment
recorded provision for credit losses of $600,000 for the second
quarter of 2023 and recorded no provision for credit losses for the
second quarter of 2022. For the first six months of 2023, the
community banking segment recorded provision for credit losses of
$1.1 million and recorded net reversals of provision for credit
losses of $700,000 for the first six months of 2022;
- The consumer finance segment
recorded provision for credit losses of $1.1 million and $520,000
for the second quarters of 2023 and 2022, respectively and recorded
provision for credit losses of $2.7 million and $870,000 for the
first six months of 2023 and 2022, respectively;
- Consolidated annualized net
interest margin was 4.29 percent for the second quarter of 2023,
compared to 4.12 percent and 4.52 percent for the second quarter of
2022 and first quarter of 2023, respectively;
- The consumer finance segment
experienced net charge-offs at an annualized rate of 1.63 percent
of average total loans for the first six months of 2023, compared
to net recoveries at an annualized rate of 0.10 percent of average
total loans for the first six months of 2022; and
- Mortgage banking segment loan
originations increased 33.9 percent and decreased 26.5 percent for
the second quarter of 2023 compared to the first quarter of 2023
and second quarter of 2022, respectively.
Community Banking
Segment. The community banking segment reported net
income of $5.6 million and $12.1 million for the second quarter and
first six months of 2023, respectively, compared to $4.8 million
and $8.3 million, respectively for the same periods in 2022,
resulting in an increase of $823,000 and $3.7 million,
respectively, due primarily to:
- higher interest income resulting
from the effects of rising interest rates on asset yields,
including on variable rate loans to the consumer finance segment,
and higher average balances of interest-earning assets, including
loans and securities;
partially offset by:
- higher interest expense due
primarily to higher rates on deposits and higher borrowing
balances;
- provision for credit losses for the
second quarter and first six months of 2023, compared to no
provision for credit losses and a reversal of provision for credit
losses for the second quarter and first six months of 2022,
respectively;
- higher salaries and employee
benefits expense, which have generally increased in line with
employment market conditions;
- higher consulting expenses due
primarily to implementing projects designed to slow or reduce
future growth of non-interest expenses; and
- higher Federal Deposit Insurance
Corporation (FDIC) assessment expenses, due primarily to statutory
increases applicable to all insured depository institutions.
Average loans increased $143.6 million, or 13.6
percent, for the second quarter of 2023 and increased $146.2
million, or 14.0 percent, for the first six months of 2023,
compared to the same periods in 2022, primarily from growth in the
commercial real estate and residential mortgage segments of the
loan portfolio. Average deposits decreased $32.0 million, or 1.6
percent, for the second quarter of 2023 and increased $14.8
million, or 0.7 percent, for the first six months of 2023, compared
to the same periods in 2022. The decrease for the second quarter of
2023 compared to the same period in 2022 is due primarily to
deposit outflows resulting from increased competition as market
interest rates rose in 2022 and the first half of 2023. Average
deposits decreased $2.8 million, or 0.1 percent, for the second
quarter of 2023 compared to the first quarter of 2023.
Average loan yields were higher for the second
quarter and first six months of 2023 compared to the same periods
of 2022, due primarily to the effects of rising interest rates as
market interest rates rose in 2022 and the first half of 2023.
While the community banking segment expects loan yields to continue
to rise, the impact on net interest margin is expected to be
outpaced by the effect of rising deposit costs for the remainder of
2023.
The community banking segment’s nonaccrual loans
were $520,000 at June 30, 2023 compared to $115,000 at December 31,
2022. The community banking segment recorded provision
for credit losses of $600,000 and $1.1 million for the second
quarter and first six months of 2023, respectively, compared to no
provision for credit losses and a net reversal of provision for
credit losses of $700,000, respectively, for the same periods in
2022. The increases are due primarily to growth in the loan
portfolio and unfunded commitments, which began requiring a reserve
in 2023 with the adoption of CECL, and the resolution of certain
impaired loans in 2022, which resulted in the reversal of specific
reserves with no losses being realized. At June 30, 2023, the
allowance for credit losses increased to $15.3 million, compared to
$14.5 million at December 31, 2022, due primarily to growth in the
loan portfolio and the adoption of CECL, which resulted in an
implementation adjustment on January 1, 2023 of $85,000. Management
believes that the level of the allowance for credit losses is
adequate to reflect the net amount expected to be collected.
Mortgage Banking
Segment. The mortgage banking segment reported
net income of $346,000 and $573,000 for the second quarter and
first six months of 2023, respectively, compared to net income of
$782,000 and $1.6 million, respectively, for the same periods in
2022, resulting in a decrease of $436,000 and $1.1 million,
respectively, due primarily to:
- lower volume of mortgage loan
originations; and
- lower reversals of provision for
indemnifications;
partially offset by:
- lower expenses tied to mortgage
loan origination volume such as salaries and employee benefits,
loan processing, and data processing.
The rapid rise in mortgage interest rates during
2022 and 2023, combined with higher home prices, has led to a
substantial decline in mortgage loan originations for the mortgage
industry during 2023 as compared to 2022, although mortgage loan
origination volumes have recovered in part during the first six
months of 2023 compared to the end of 2022. Mortgage loan
originations for the mortgage banking segment were $155.1 million
and $270.9 million for the second quarter and first six months of
2023, respectively, compared to $211.1 million and $401.0 million,
respectively, for the same periods in 2022. Mortgage loan
originations during the second quarter of 2023 for refinancings and
home purchases were $14.4 million and $140.7 million, respectively,
compared to $25.4 million and $185.7 million, respectively, during
the second quarter of 2022. Mortgage loan originations during the
first six months of 2023 for refinancings and home purchases were
$28.3 million and $242.6 million, respectively, compared to $73.8
million and $327.2 million, respectively, during the first six
months of 2022. Mortgage loan originations in the second quarter of
2023 increased $39.3 million compared to the first quarter of
2023.
During the second quarter and first six months
of 2023, the mortgage banking segment recorded a reversal of
provision for indemnification losses of $235,000, respectively,
compared to a reversal of provision for indemnification losses of
$286,000 and $869,000, respectively, in the same periods of 2022.
The release of indemnification reserves in 2022 and 2023 was due
primarily to improvement in the mortgage banking segment’s
assessment of borrower payment performance and other factors
affecting expected losses on mortgage loans sold in the secondary
market. To date, the mortgage banking segment has not made any
payments for indemnification losses since the onset of the COVID-19
pandemic in the first quarter of 2020, and management believes that
the indemnification reserve is sufficient to absorb losses related
to loans that have been sold in the secondary market.
Consumer Finance
Segment. The consumer finance segment reported
net income of $1.1 million and $1.6 million for the second quarter
and first six months of 2023, respectively, compared to net income
of $2.2 million and $4.3 million, respectively, for the same
periods in 2022, resulting in a decrease of $1.1 million and $2.7
million, respectively, due primarily to:
- higher interest expense due
primarily to increased costs on variable rate borrowings from the
community banking segment as market interest rates have increased;
and
- higher provision for credit losses
as a result of increased net charge-offs;
partially offset by:
- higher interest income resulting
from higher average balances of interest-earning assets and the
effects of rising market interest rates.
Average loans outstanding increased $58.7
million, or 14.1 percent, for the second quarter of 2023 compared
to the same period in 2022 and increased $76.3 million, or 19.1
percent, for the first six months of 2023 compared to the same
period in 2022. The consumer finance segment experienced net
charge-offs at an annualized rate of 1.63 percent of average total
loans for the first six months of 2023, compared to annualized net
recoveries of 0.10 percent for the first six months of 2022, due
primarily to an increase in the number of delinquent loans
following a period of historically low delinquencies during the
COVID-19 pandemic, a steady decline in wholesale values of used
automobiles from a peak during the COVID-19 pandemic and continued
challenges in repossessing automobiles due to a decline in the
number of repossession agencies, which results in a fully
charged-off loan when an automobile cannot be repossessed. At June
30, 2023, total delinquent loans as a percentage of total loans was
2.88 percent, compared to 2.78 percent at December 31, 2022 and
2.07 percent at June 30, 2022. The allowance for credit losses was
$25.2 million at June 30, 2023, compared to $26.0 million at
December 31, 2022. The allowance for credit losses as a percentage
of total loans decreased to 5.30 percent at June 30, 2023 from 5.47
percent and 5.92 percent at December 31, 2022 and June 30, 2022,
respectively, primarily as a result of growth in loans with
stronger credit quality while balances of loans with lower credit
quality declined, partially offset by the adoption of CECL, which
resulted in an implementation adjustment on January 1, 2023 of
$406,000. Management believes that the level of the allowance for
credit losses is adequate to reflect the net amount expected to be
collected. If loan performance deteriorates resulting in elevated
delinquencies or net charge-offs, the provision for credit losses
may increase in future periods.
Liquidity. The objective of the
Corporation’s liquidity management is to ensure the continuous
availability of funds to satisfy the credit needs of our customers
and the demands of our depositors, creditors and investors.
Uninsured deposits represent amounts above the FDIC insurance
coverage limit. As of June 30, 2023, the Corporation’s uninsured
deposits, excluding intercompany cash holdings and municipal
deposits which are secured with pledged securities, were $382.7
million, or 19.2 percent of total deposits. The Corporation’s
borrowing availability as of June 30, 2023 was $530.9 million,
exceeding uninsured deposits, excluding intercompany cash holdings
and secured municipal deposits, by $148.2 million. The Corporation
had an additional $290.5 million of nonpledged securities that were
available to be pledged as collateral for future borrowings from
the Federal Home Loan Bank of Atlanta (FHLB) and Federal Reserve
Bank above the current lendable collateral value.
In addition to deposits, the Corporation
utilizes short-term and long-term borrowings as sources of funds.
Short-term borrowings from the Federal Reserve Bank and the FHLB
may be used to fund the Corporation’s day-to-day operations.
Short-term borrowings also include securities sold under agreements
to repurchase. Borrowings increased to $175.6 million at June 30,
2023 from $92.1 million at December 31, 2022 and $92.5 million at
June 30, 2022, due primarily to short-term borrowings from the
FHLB. Borrowings decreased $25.4 million from $201.0 million at
March 31, 2023.
Additional sources of liquidity available to the
Corporation include cash flows from operations, loan payments and
payoffs, deposit growth, maturities, calls and sales of securities
and the issuance of brokered certificates of deposit.
Capital and Dividends. The
Corporation declared a quarterly cash dividend of 44 cents per
share during the second quarter of 2023, which was paid on July 1,
2023. This dividend represents a payout ratio of 23.9 percent of
earnings per share for the second quarter of 2023. The Board of
Directors of the Corporation continually reviews the amount of cash
dividends per share and the resulting dividend payout ratio in
light of changes in economic conditions, current and future capital
requirements, and expected future earnings.
Total consolidated equity increased $6.3 million
at June 30, 2023 compared to December 31, 2022, due primarily to
net income and lower unrealized losses in the market value of
securities available for sale, which are recognized as a component
of other comprehensive loss, partially offset by share purchases,
dividends paid on the Corporation’s common stock, and the
Corporation’s adoption of the Current Expected Credit Loss (CECL)
methodology for estimating credit losses, which resulted in a
decrease to opening retained earnings of $1.1 million. The
Corporation’s securities available for sale are fixed income debt
securities, and their unrealized loss position is a result of
rising market interest rates since they were purchased. The
Corporation expects to recover its investments in debt securities
through scheduled payments of principal and interest, and
unrealized losses are not expected to affect the earnings or
regulatory capital of the Corporation or the Bank. The accumulated
other comprehensive loss related to the Corporation’s securities
available for sale decreased to $33.6 million at June 30, 2023,
compared to $35.2 million at December 31, 2022.
As of June 30, 2023, the most recent
notification from the FDIC categorized the C&F Bank as well
capitalized under the regulatory framework for prompt corrective
action. To be categorized as well capitalized under regulations
applicable at June 30, 2023, C&F Bank was required to maintain
minimum total risk-based, Tier 1 risk-based, CET1 risk-based and
Tier 1 leverage ratios. In addition to the regulatory risk-based
capital requirements, C&F Bank must maintain a capital
conservation buffer of additional capital of 2.5 percent of
risk-weighted assets as required by the Basel III capital rules.
The Corporation and C&F Bank exceeded these ratios at June 30,
2023. The Corporation repaid $4.0 million of subordinated notes
during the three months ended June 30, 2023. For additional
information, see “Capital Ratios” below. The above mentioned ratios
are not impacted by unrealized losses on securities available for
sale. In the event that all of these unrealized losses became
realized into earnings, the Corporation and C&F Bank would both
continue to exceed minimum capital requirements, including the
capital conservation buffer, and be considered well
capitalized.
In November 2022, the Board of Directors
authorized a program, effective December 1, 2022, to repurchase up
to $10.0 million of the Corporation’s common stock through December
31, 2023. During the second quarter of 2023, the Corporation
repurchased 47,024 shares, or $2.5 million, of its common stock
under this share repurchase program.
About C&F Financial
Corporation. The Corporation’s common stock is listed
for trading on The Nasdaq Stock Market under the symbol CFFI. The
common stock closed at a price of $57.52 per share on July 25,
2023. At June 30, 2023, the book value of the
Corporation was $59.31 per share and the tangible book value per
share was $51.46. For more information about the Corporation’s
tangible book value per share, which is not calculated in
accordance with GAAP, please see “Use of Certain Non-GAAP Financial
Measures” and “Reconciliation of Certain Non-GAAP Financial
Measures,” below.
C&F Bank operates 31 banking offices and
four commercial loan offices located throughout eastern and central
Virginia and offers full wealth management services through its
subsidiary C&F Wealth Management, Inc. C&F Mortgage
Corporation and its subsidiary C&F Select LLC provide mortgage
loan origination services through offices located in Virginia,
Maryland, North Carolina, South Carolina and West Virginia. C&F
Finance Company provides automobile, marine and recreational
vehicle loans through indirect lending programs offered in Alabama,
Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas,
Kentucky, Maryland, Minnesota, Missouri, New Jersey, North
Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas,
Virginia and West Virginia from its headquarters in Henrico,
Virginia.
Additional information regarding the
Corporation’s products and services, as well as access to its
filings with the Securities and Exchange Commission (SEC), are
available on the Corporation’s website at http://www.cffc.com.
Use of Certain Non-GAAP Financial
Measures. The accounting and reporting policies of the
Corporation conform to GAAP in the United States and prevailing
practices in the banking industry. However, certain non-GAAP
measures are used by management to supplement the evaluation of the
Corporation’s performance. These include return on average tangible
common equity (ROTCE), tangible book value per share, and the
following fully-taxable equivalent (FTE) measures: interest income
on loans-FTE, interest income on securities-FTE, total interest
income-FTE and net interest income-FTE.
Management believes that the use of these
non-GAAP measures provides meaningful information about operating
performance by enhancing comparability with other financial
periods, other financial institutions, and between different
sources of interest income. The non-GAAP measures used by
management enhance comparability by excluding the effects of
balances of intangible assets, including goodwill, that vary
significantly between institutions, and tax benefits that are not
consistent across different opportunities for investment. These
non-GAAP financial measures should not be considered an alternative
to GAAP-basis financial statements, and other bank holding
companies may define or calculate these or similar measures
differently. A reconciliation of the non-GAAP financial measures
used by the Corporation to evaluate and measure the Corporation’s
performance to the most directly comparable GAAP financial measures
is presented below.
Forward-Looking
Statements. This press release contains
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act, as amended. These forward-looking
statements are based on the beliefs of the Corporation’s
management, as well as assumptions made by, and information
currently available to, the Corporation’s management, and reflect
management’s current views with respect to certain events that
could have an impact on the Corporation’s future financial
performance. These statements, including without limitation
statements made in Mr. Cherry’s quote and statements regarding
future conditions in the Corporation’s industries and markets,
relate to expectations concerning matters that are not historical
fact, may express “belief,” “intention,” “expectation,” “potential”
and similar expressions, and may use the words “believe,” “expect,”
“anticipate,” “estimate,” “plan,” “may,” “might,” “will,” “intend,”
“target,” “should,” “could,” or similar expressions. These
statements are inherently uncertain, and there can be no assurance
that the underlying assumptions will prove to be accurate. Actual
results could differ materially from those anticipated or implied
by such statements. Forward-looking statements in this release may
include, without limitation, statements regarding expected future
operations and financial performance, expected future recovery of
investments in debt securities, future dividend payments, strategic
business initiatives and the anticipated effects thereof, changes
in interest rates and the effects thereof on net interest income,
mortgage loan originations, expectations regarding C&F Bank’s
regulatory risk-based capital requirement levels, technology
initiatives, our diversified business strategy, asset quality,
credit quality, adequacy of allowances for credit losses and the
level of future charge-offs, adequacy of the reserve for
indemnification losses related to loans sold in the secondary
market, the effect of future market and industry trends, the
effects of future interest rate fluctuations, cybersecurity risks,
and inflation. Factors that could have a material adverse effect on
the operations and future prospects of the Corporation include, but
are not limited to, changes in:
- interest rates, such as volatility
in short-term interest rates or yields on U.S. Treasury bonds,
increases in interest rates following actions by the Federal
Reserve and increases or volatility in mortgage interest rates
- general business conditions, as
well as conditions within the financial markets
- general economic conditions,
including unemployment levels, inflation rates, supply chain
disruptions and slowdowns in economic growth, and also including
the economic impacts of the COVID-19 pandemic
- market disruptions including
pandemics or significant health hazards, severe weather conditions,
natural disasters, terrorist activities, financial crises,
political crises, war and other military conflicts (including the
ongoing military conflict between Russia and Ukraine) or other
major events, or the prospect of these events
- developments impacting the
financial services industry, such as bank failures or concerns
involving liquidity
- attracting, hiring, training,
motivating and retaining qualified employees
- the legislative/regulatory climate,
regulatory initiatives with respect to financial institutions,
products and services, the Consumer Financial Protection Bureau
(the CFPB) and the regulatory and enforcement activities of the
CFPB
- monetary and fiscal policies of the
U.S. Government, including policies of the FDIC, U.S. Department of
the Treasury and the Board of Governors of the Federal Reserve
System (the Federal Reserve Board), and the effect of these
policies on interest rates and business in our markets
- demand for financial services in
the Corporation’s market area
- the value of securities held in the
Corporation’s investment portfolios
- the quality or composition of the
loan portfolios and the value of the collateral securing those
loans
- the inventory level, demand and
fluctuations in the pricing of used automobiles, including sales
prices of repossessed vehicles
- the level of automobile loan
delinquencies or defaults and our ability to repossess automobiles
securing delinquent automobile finance installment contracts
- the level of net charge-offs on
loans and the adequacy of our allowance for credit losses
- the level of indemnification losses
related to mortgage loans sold
- demand for loan products
- deposit flows
- the strength of the Corporation’s
counterparties
- the soundness of other financial
institutions and any indirect exposure related to the closing of
other financial institutions and their impact on the broader market
through other customers, suppliers and partners, or that the
conditions which resulted in the liquidity concerns experienced by
closed financial institutions may also adversely impact, directly
or indirectly, other financial institutions and market participants
with which the Corporation has commercial or deposit
relationships
- competition from both banks and
non-banks, including competition in the non-prime automobile
finance markets
- reliance on third parties for key
services
- the commercial and residential real
estate markets
- the demand for residential
mortgages and conditions in the secondary residential mortgage loan
markets
- the Corporation’s technology
initiatives and other strategic initiatives
- the Corporation’s branch expansions
and consolidations
- cyber threats, attacks or
events
- expansion of C&F Bank’s product
offerings
- accounting principles, policies and
guidelines, and elections by the Corporation thereunder, including,
for example, our adoption of the CECL methodology and the potential
volatility in the Corporation’s operating results due to the
application of the CECL methodology
These risks and uncertainties should be
considered in evaluating the forward-looking statements contained
herein, and readers are cautioned not to place undue reliance on
any forward-looking statements, which speak only as of the date of
this release. For additional information on risk factors that could
affect the forward-looking statements contained herein, see the
Corporation’s Annual Report on Form 10-K for the year ended
December 31, 2022, the Corporation’s Quarterly Report on Form 10-Q
for the quarter ended March 31, 2023, and other reports filed with
the SEC. The Corporation undertakes no obligation to update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
|
Contact: |
Jason Long, CFO and Secretary |
| |
(804)
843-2360 |
C&F Financial
Corporation
Selected Financial
Information(dollars in thousands, except for per
share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
| Financial
Condition |
|
6/30/2023 |
|
12/31/2022 |
|
6/30/2022 |
|
| Interest-bearing deposits in
other banks |
|
$ |
42,068 |
|
$ |
7,051 |
|
$ |
118,428 |
|
| Investment securities -
available for sale, at fair value |
|
|
490,884 |
|
|
512,591 |
|
|
501,984 |
|
| Loans held for sale, at fair
value |
|
|
36,317 |
|
|
14,259 |
|
|
43,362 |
|
| Loans, net: |
|
|
|
|
|
|
|
|
|
|
|
Community Banking segment |
|
|
1,196,621 |
|
|
1,145,940 |
|
|
1,058,786 |
|
|
Mortgage Banking segment |
|
|
- |
|
|
671 |
|
|
9,850 |
|
|
Consumer Finance segment |
|
|
449,841 |
|
|
448,589 |
|
|
411,196 |
|
| Total assets |
|
|
2,419,455 |
|
|
2,332,317 |
|
|
2,334,340 |
|
| Deposits |
|
|
1,997,471 |
|
|
2,003,860 |
|
|
2,006,017 |
|
| Repurchase agreements |
|
|
29,680 |
|
|
34,481 |
|
|
36,936 |
|
| Other borrowings |
|
|
145,904 |
|
|
57,603 |
|
|
55,611 |
|
| Total equity |
|
|
202,528 |
|
|
196,233 |
|
|
196,283 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For The |
|
|
For The |
|
| |
|
Quarter Ended |
|
|
Six Months Ended |
|
| Results of
Operations |
|
6/30/2023 |
|
|
6/30/2022 |
|
|
6/30/2023 |
|
|
6/30/2022 |
|
|
Interest income |
|
$ |
30,738 |
|
|
$ |
24,392 |
|
|
$ |
60,043 |
|
|
$ |
46,623 |
|
|
| Interest expense |
|
|
6,393 |
|
|
|
1,761 |
|
|
|
10,740 |
|
|
|
3,516 |
|
|
| Provision for credit
losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community Banking segment |
|
|
600 |
|
|
|
- |
|
|
|
1,050 |
|
|
|
(700 |
) |
|
|
Mortgage Banking segment |
|
|
- |
|
|
|
10 |
|
|
|
- |
|
|
|
32 |
|
|
|
Consumer Finance segment |
|
|
1,100 |
|
|
|
520 |
|
|
|
2,700 |
|
|
|
870 |
|
|
| Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on sales of loans |
|
|
1,916 |
|
|
|
2,198 |
|
|
|
3,710 |
|
|
|
4,893 |
|
|
|
Other |
|
|
5,847 |
|
|
|
3,465 |
|
|
|
11,496 |
|
|
|
7,499 |
|
|
| Noninterest expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
14,022 |
|
|
|
10,642 |
|
|
|
27,920 |
|
|
|
22,498 |
|
|
|
Other |
|
|
8,469 |
|
|
|
8,457 |
|
|
|
16,972 |
|
|
|
16,812 |
|
|
| Income tax expense |
|
|
1,533 |
|
|
|
1,882 |
|
|
|
2,986 |
|
|
|
3,469 |
|
|
| Net income |
|
|
6,384 |
|
|
|
6,783 |
|
|
|
12,881 |
|
|
|
12,518 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fully-taxable equivalent (FTE)
amounts1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income on loans-FTE |
|
|
27,469 |
|
|
|
21,966 |
|
|
|
53,576 |
|
|
|
42,476 |
|
|
|
Interest income on securities-FTE |
|
|
3,223 |
|
|
|
2,166 |
|
|
|
6,455 |
|
|
|
3,899 |
|
|
|
Total interest income-FTE |
|
|
30,973 |
|
|
|
24,526 |
|
|
|
60,488 |
|
|
|
46,875 |
|
|
|
Net interest income-FTE |
|
|
24,580 |
|
|
|
22,765 |
|
|
|
49,748 |
|
|
|
43,359 |
|
|
________________________1 For more information about these
non-GAAP financial measures, please see “Use of Certain Non-GAAP
Financial Measures” and “Reconciliation of Certain Non-GAAP
Financial Measures.”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For The |
|
|
For The |
|
| |
|
Quarter Ended |
|
|
Six Months Ended |
|
| Average
Balances |
|
6/30/2023 |
|
|
3/31/2023 |
|
|
6/30/2022 |
|
|
6/30/2023 |
|
6/30/2022 |
|
| Securities |
|
$ |
552,394 |
|
|
$ |
561,054 |
|
|
$ |
469,546 |
|
|
$ |
556,700 |
|
$ |
438,450 |
|
| Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community Banking segment |
|
|
1,201,145 |
|
|
|
1,172,164 |
|
|
|
1,057,527 |
|
|
|
1,186,734 |
|
|
1,040,557 |
|
|
Mortgage Banking segment |
|
|
30,734 |
|
|
|
19,076 |
|
|
|
57,393 |
|
|
|
24,936 |
|
|
58,660 |
|
|
Consumer Finance segment |
|
|
476,203 |
|
|
|
475,225 |
|
|
|
417,503 |
|
|
|
475,717 |
|
|
399,409 |
|
| Interest-bearing deposits in
other banks |
|
|
34,661 |
|
|
|
25,911 |
|
|
|
215,240 |
|
|
|
30,310 |
|
|
235,023 |
|
| Total earning assets |
|
|
2,295,137 |
|
|
|
2,253,430 |
|
|
|
2,217,209 |
|
|
|
2,274,397 |
|
|
2,172,099 |
|
| Total assets |
|
|
2,400,077 |
|
|
|
2,367,376 |
|
|
|
2,345,567 |
|
|
|
2,383,817 |
|
|
2,304,426 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Time, checking and savings
deposits |
|
|
1,403,356 |
|
|
|
1,393,229 |
|
|
|
1,383,983 |
|
|
|
1,398,320 |
|
|
1,360,618 |
|
| Repurchase agreements |
|
|
31,507 |
|
|
|
35,260 |
|
|
|
36,527 |
|
|
|
33,373 |
|
|
34,636 |
|
| Other borrowings |
|
|
141,098 |
|
|
|
105,421 |
|
|
|
55,645 |
|
|
|
123,358 |
|
|
55,676 |
|
| Total interest-bearing
liabilities |
|
|
1,575,961 |
|
|
|
1,533,910 |
|
|
|
1,476,155 |
|
|
|
1,555,051 |
|
|
1,450,930 |
|
| Noninterest-bearing demand
deposits |
|
|
578,784 |
|
|
|
591,709 |
|
|
|
630,154 |
|
|
|
585,211 |
|
|
608,160 |
|
| Total equity |
|
|
204,090 |
|
|
|
201,856 |
|
|
|
196,540 |
|
|
|
202,979 |
|
|
202,614 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annualized Average
Yields and Rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Securities |
|
|
2.33 |
% |
|
|
2.30 |
% |
|
|
1.85 |
% |
|
|
2.32 |
% |
|
1.78 |
% |
| Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community Banking segment |
|
|
5.07 |
|
|
|
4.95 |
|
|
|
4.21 |
|
|
|
5.01 |
|
|
4.18 |
|
|
Mortgage Banking segment |
|
|
6.51 |
|
|
|
6.29 |
|
|
|
4.40 |
|
|
|
6.43 |
|
|
3.84 |
|
|
Consumer Finance segment |
|
|
9.93 |
|
|
|
9.82 |
|
|
|
9.82 |
|
|
|
9.87 |
|
|
10.00 |
|
| Interest-bearing deposits in
other banks |
|
|
3.25 |
|
|
|
2.75 |
|
|
|
0.73 |
|
|
|
3.04 |
|
|
0.43 |
|
| Time, checking and savings
deposits |
|
|
1.31 |
|
|
|
0.88 |
|
|
|
0.32 |
|
|
|
1.10 |
|
|
0.33 |
|
| Repurchase agreements |
|
|
1.23 |
|
|
|
0.92 |
|
|
|
0.45 |
|
|
|
1.07 |
|
|
0.45 |
|
| Other borrowings |
|
|
4.88 |
|
|
|
4.69 |
|
|
|
4.45 |
|
|
|
4.79 |
|
|
4.43 |
|
| Net interest margin |
|
|
4.29 |
|
|
|
4.52 |
|
|
|
4.12 |
|
|
|
4.41 |
|
|
4.02 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
6/30/2023 |
|
Funding Sources |
|
Capacity |
|
Outstanding |
|
Available |
| Unsecured federal funds
agreements |
|
$ |
95,000 |
|
$ |
— |
|
$ |
95,000 |
| Repurchase lines of
credit |
|
|
35,000 |
|
|
— |
|
|
35,000 |
| Borrowings from FHLB |
|
|
260,512 |
|
|
94,500 |
|
|
166,012 |
| Borrowings from Federal
Reserve Bank |
|
|
234,854 |
|
|
— |
|
|
234,854 |
| Total |
|
$ |
625,366 |
|
$ |
94,500 |
|
$ |
530,866 |
| |
|
|
|
|
|
|
|
| Asset
Quality1 |
|
6/30/2023 |
|
12/31/2022 |
|
| Community
Banking |
|
|
|
|
|
|
|
|
Total loans |
|
$ |
1,211,962 |
|
|
$ |
1,160,454 |
|
|
Nonaccrual loans |
|
$ |
520 |
|
|
$ |
115 |
|
|
Impaired loans |
|
|
n/a |
|
|
$ |
823 |
|
| |
|
|
|
|
|
|
|
|
Allowance for credit losses (ACL) |
|
$ |
15,341 |
|
|
$ |
14,513 |
|
|
Nonaccrual loans to total loans |
|
|
0.04 |
% |
|
|
0.01 |
% |
|
ACL to total loans |
|
|
1.27 |
% |
|
|
1.25 |
% |
|
ACL to nonaccrual loans |
|
|
2,950.19 |
% |
|
|
12,620.00 |
% |
|
Annualized year-to-date net (recoveries) charge-offs to average
loans |
|
|
(0.01 |
)% |
|
|
0.02 |
% |
|
|
|
|
|
|
|
|
|
| Mortgage
Banking2 |
|
|
|
|
|
|
|
|
Total loans |
|
$ |
- |
|
|
$ |
707 |
|
|
Nonaccrual loans |
|
$ |
- |
|
|
$ |
149 |
|
|
ACL |
|
$ |
- |
|
|
$ |
36 |
|
|
Nonaccrual loans to total loans |
|
|
- |
% |
|
|
21.07 |
% |
|
ACL to total loans |
|
|
- |
% |
|
|
5.09 |
% |
|
ACL to nonaccrual loans |
|
|
- |
% |
|
|
24.16 |
% |
|
Annualized year-to-date net charge-offs to average loans |
|
|
- |
% |
|
|
- |
% |
|
|
|
|
|
|
|
|
|
| Consumer
Finance |
|
|
|
|
|
|
|
|
Total loans |
|
$ |
475,028 |
|
|
$ |
474,557 |
|
|
Nonaccrual loans |
|
$ |
649 |
|
|
$ |
925 |
|
|
Repossessed assets |
|
$ |
519 |
|
|
$ |
352 |
|
|
ACL |
|
$ |
25,187 |
|
|
$ |
25,969 |
|
|
Nonaccrual loans to total loans |
|
|
0.14 |
% |
|
|
0.19 |
% |
|
ACL to total loans |
|
|
5.30 |
% |
|
|
5.47 |
% |
|
ACL to nonaccrual loans |
|
|
3,880.89 |
% |
|
|
2,807.46 |
% |
|
Annualized year-to-date net charge-offs to average loans |
|
|
1.63 |
% |
|
|
0.59 |
% |
________________________
1 Current period balances and ratios presented based upon
current, post-CECL implementation GAAP whereas prior period
balances and ratios presented based upon the applicable GAAP at
that time.
2 All loans have been transferred to the community banking
segment. Total loans does not include loans held for sale.
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For The |
|
For The |
| |
|
Quarter Ended |
|
Six Months Ended |
| Other Performance
Data |
|
6/30/2023 |
|
6/30/2022 |
|
6/30/2023 |
|
6/30/2022 |
| Net Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Community Banking |
|
$ |
5,639 |
|
|
$ |
4,816 |
|
|
$ |
12,057 |
|
|
$ |
8,333 |
|
|
Mortgage Banking |
|
|
346 |
|
|
|
782 |
|
|
|
573 |
|
|
|
1,648 |
|
|
Consumer Finance |
|
|
1,070 |
|
|
|
2,195 |
|
|
|
1,579 |
|
|
|
4,257 |
|
|
Other1 |
|
|
(671 |
) |
|
|
(1,010 |
) |
|
|
(1,328 |
) |
|
|
(1,720 |
) |
|
Total |
|
$ |
6,384 |
|
|
$ |
6,783 |
|
|
$ |
12,881 |
|
|
$ |
12,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income attributable to
C&F Financial Corporation |
|
$ |
6,306 |
|
|
$ |
6,742 |
|
|
$ |
12,747 |
|
|
$ |
12,371 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per share - basic and
diluted |
|
$ |
1.84 |
|
|
$ |
1.91 |
|
|
$ |
3.70 |
|
|
$ |
3.49 |
|
| Weighted average shares
outstanding - basic and diluted |
|
|
3,424,820 |
|
|
|
3,534,489 |
|
|
|
3,444,746 |
|
|
|
3,541,098 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Annualized return on average
assets |
|
|
1.06 |
% |
|
|
1.16 |
% |
|
|
1.08 |
% |
|
|
1.09 |
% |
| Annualized return on average
equity |
|
|
12.51 |
% |
|
|
13.80 |
% |
|
|
12.69 |
% |
|
|
12.36 |
% |
| Annualized return on average
tangible common equity2 |
|
|
14.43 |
% |
|
|
16.15 |
% |
|
|
14.68 |
% |
|
|
14.33 |
% |
| Dividends declared per
share |
|
$ |
0.44 |
|
|
$ |
0.40 |
|
|
$ |
0.88 |
|
|
$ |
0.80 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Mortgage loan originations -
Mortgage Banking |
|
$ |
155,086 |
|
|
$ |
211,072 |
|
|
$ |
270,901 |
|
|
$ |
400,976 |
|
| Mortgage loans sold - Mortgage
Banking |
|
|
145,224 |
|
|
|
214,101 |
|
|
|
249,251 |
|
|
|
438,293 |
|
________________________
1 Includes results of the holding company that are not allocated
to the business segments and elimination of inter-segment
activity.
2 For more information about these non-GAAP financial measures,
please see “Use of Certain Non-GAAP Financial Measures” and
“Reconciliation of Certain Non-GAAP Financial Measures.”
|
|
|
|
|
|
|
|
|
| Market
Ratios |
|
6/30/2023 |
|
|
12/31/2022 |
| Market value per share |
|
$ |
53.70 |
|
|
$ |
58.27 |
| Book value per share |
|
$ |
59.31 |
|
|
$ |
56.27 |
| Price to book value ratio |
|
|
0.91 |
|
|
|
1.04 |
| Tangible book value per
share1 |
|
$ |
51.46 |
|
|
$ |
48.54 |
| Price to tangible book value
ratio1 |
|
|
1.04 |
|
|
|
1.20 |
| Price to earnings ratio
(ttm) |
|
|
6.30 |
|
|
|
7.00 |
________________________1 For more information about these
non-GAAP financial measures, please see “Use of Certain Non-GAAP
Financial Measures” and “Reconciliation of Certain Non-GAAP
Financial Measures.”
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Minimum Capital |
| Capital
Ratios |
|
6/30/2023 |
|
12/31/2022 |
|
Requirements3 |
| C&F Financial
Corporation1 |
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital ratio |
|
|
14.9 |
% |
|
15.4 |
% |
|
8.0 |
% |
|
Tier 1 risk-based capital ratio |
|
|
12.6 |
% |
|
12.8 |
% |
|
6.0 |
% |
|
Common equity tier 1 capital ratio |
|
|
11.3 |
% |
|
11.4 |
% |
|
4.5 |
% |
|
Tier 1 leverage ratio |
|
|
9.9 |
% |
|
9.9 |
% |
|
4.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
| C&F
Bank2 |
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital ratio |
|
|
14.1 |
% |
|
14.2 |
% |
|
8.0 |
% |
|
Tier 1 risk-based capital ratio |
|
|
12.8 |
% |
|
12.9 |
% |
|
6.0 |
% |
|
Common equity tier 1 capital ratio |
|
|
12.8 |
% |
|
12.9 |
% |
|
4.5 |
% |
|
Tier 1 leverage ratio |
|
|
10.0 |
% |
|
9.9 |
% |
|
4.0 |
% |
________________________1 The Corporation, a small bank
holding company under applicable regulations and guidance, is not
subject to the minimum regulatory capital regulations for bank
holding companies. The regulatory requirements that apply to bank
holding companies that are subject to regulatory capital
requirements are presented above, along with the Corporation’s
capital ratios as determined under those regulations.2 All
ratios at June 30, 2023 are estimates and subject to change pending
regulatory filings. All ratios at December 31, 2022 are presented
as filed.3 The ratios presented for minimum capital
requirements are those to be considered adequately capitalized.
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For The Quarter Ended |
|
For The Six Months Ended |
| |
|
6/30/2023 |
|
6/30/2022 |
|
6/30/2023 |
|
6/30/2022 |
| Reconciliation of
Certain Non-GAAP Financial Measures |
|
|
|
|
|
|
|
|
| Return on Average
Tangible Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total equity, as reported |
|
$ |
204,090 |
|
|
$ |
196,540 |
|
|
$ |
202,979 |
|
|
$ |
202,614 |
|
| Average goodwill |
|
|
(25,191 |
) |
|
|
(25,191 |
) |
|
|
(25,191 |
) |
|
|
(25,191 |
) |
| Average other intangible
assets |
|
|
(1,569 |
) |
|
|
(1,856 |
) |
|
|
(1,604 |
) |
|
|
(1,896 |
) |
| Average noncontrolling
interest |
|
|
(623 |
) |
|
|
(628 |
) |
|
|
(706 |
) |
|
|
(754 |
) |
| Average tangible common
equity |
|
$ |
176,707 |
|
|
$ |
168,865 |
|
|
$ |
175,478 |
|
|
$ |
174,773 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
6,384 |
|
|
$ |
6,783 |
|
|
$ |
12,881 |
|
|
$ |
12,518 |
|
| Amortization of
intangibles |
|
|
68 |
|
|
|
74 |
|
|
|
136 |
|
|
|
149 |
|
| Net income attributable to
noncontrolling interest |
|
|
(78 |
) |
|
|
(41 |
) |
|
|
(134 |
) |
|
|
(147 |
) |
| Net tangible income
attributable to C&F Financial Corporation |
|
$ |
6,374 |
|
|
$ |
6,816 |
|
|
$ |
12,883 |
|
|
$ |
12,520 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average tangible common equity |
|
|
14.43 |
% |
|
|
16.15 |
% |
|
|
14.68 |
% |
|
|
14.33 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fully Taxable
Equivalent Net Interest Income1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income on loans |
|
$ |
27,416 |
|
|
$ |
21,923 |
|
|
$ |
53,476 |
|
|
$ |
42,407 |
|
|
FTE adjustment |
|
|
53 |
|
|
|
43 |
|
|
|
100 |
|
|
|
69 |
|
|
FTE interest income on loans |
|
$ |
27,469 |
|
|
$ |
21,966 |
|
|
$ |
53,576 |
|
|
$ |
42,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income on securities |
|
$ |
3,041 |
|
|
$ |
2,075 |
|
|
$ |
6,110 |
|
|
$ |
3,716 |
|
|
FTE adjustment |
|
|
182 |
|
|
|
91 |
|
|
|
345 |
|
|
|
183 |
|
|
FTE interest income on securities |
|
$ |
3,223 |
|
|
$ |
2,166 |
|
|
$ |
6,455 |
|
|
$ |
3,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
$ |
30,738 |
|
|
$ |
24,392 |
|
|
$ |
60,043 |
|
|
$ |
46,623 |
|
|
FTE adjustment |
|
|
235 |
|
|
|
134 |
|
|
|
445 |
|
|
|
252 |
|
|
FTE interest income |
|
$ |
30,973 |
|
|
$ |
24,526 |
|
|
$ |
60,488 |
|
|
$ |
46,875 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
24,345 |
|
|
$ |
22,631 |
|
|
$ |
49,303 |
|
|
$ |
43,107 |
|
|
FTE adjustment |
|
|
235 |
|
|
|
134 |
|
|
|
445 |
|
|
|
252 |
|
|
FTE net interest income |
|
$ |
24,580 |
|
|
$ |
22,765 |
|
|
$ |
49,748 |
|
|
$ |
43,359 |
|
________________________
1 Assuming a tax rate of 21%.
| |
|
|
|
|
|
|
|
| |
|
June 30, |
|
|
December 31, |
| |
|
2023 |
|
|
2022 |
| Tangible Book Value
Per Share |
|
|
|
|
|
|
Equity attributable to C&F Financial Corporation |
|
$ |
201,898 |
|
|
|
$ |
195,634 |
|
| Goodwill |
|
|
(25,191 |
) |
|
|
|
(25,191 |
) |
| Other intangible assets |
|
|
(1,543 |
) |
|
|
|
(1,679 |
) |
| Tangible equity attributable
to C&F Financial Corporation |
|
$ |
175,164 |
|
|
|
$ |
168,764 |
|
| |
|
|
|
|
|
|
|
| Shares outstanding |
|
|
3,403,838 |
|
|
|
|
3,476,614 |
|
| |
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
59.31 |
|
|
|
$ |
56.27 |
|
|
Tangible book value per share |
|
$ |
51.46 |
|
|
|
$ |
48.54 |
|
C and F Financial (NASDAQ:CFFI)
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C and F Financial (NASDAQ:CFFI)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024
