C&F Financial Corporation Announces Net Income for 2023
- Consolidated net income of $23.7 million for 2023 compared to $29.4 million for 2022
- Adjusted net income of $23.7 million for 2023 compared to $27.0 million for 2022
- Earnings per share - basic and diluted were $6.92 for 2023 compared to $8.29 for 2022
- Return on average assets was 0.99% for 2023 compared to 1.27% for 2022
- Return on average equity was 11.68% for 2023 compared to 14.84% for 2022
- Return on average tangible common equity was 13.58% for 2023 compared to 17.31% for 2022
- None.
Insights
The reported financials from C&F Financial Corporation indicate a decrease in net income from $29.4 million in the previous year to $23.7 million. This decline is substantial and warrants an analysis of its causes and implications. The decrease in earnings per share (EPS) from $8.29 to $6.92 also signals a potential concern for shareholders, as EPS is a critical measure of a company's profitability on a per-share basis. Moreover, the reductions in return on average assets (ROAA) and return on average equity (ROAE) suggest less efficient use of resources and equity by the company in generating income.
Understanding the factors behind these decreases is essential. The reported figures include certain non-recurring items from the previous year, such as gains from real estate disposal and changes in accounting policy. When these are excluded, the adjusted net income still shows a decrease, albeit smaller, from $27.0 million to $23.7 million. This adjusted figure provides a clearer picture of the company's ongoing operational performance, excluding one-off events.
Investors and stakeholders should consider these figures in light of the broader economic context and the company's strategic decisions, such as branch consolidation. While the decline in net income may be a concern, the company's ability to maintain profitability amidst such changes could be seen as a positive sign of management's adaptability.
From a market perspective, the performance of C&F Financial Corporation needs to be contextualized within the banking sector and the overall economic environment. The banking industry is sensitive to interest rate changes, regulatory pressures and economic cycles. The decline in profitability metrics such as ROAA and ROAE could be reflective of broader market trends and should be compared against peer performance.
It’s also important to analyze customer and market reactions to the branch consolidation mentioned. While such measures can reduce costs and improve efficiency in the long run, they can also impact customer satisfaction and loyalty in the short term. The effects on the company's market position and competitive edge need to be monitored closely.
Additionally, the banking sector is undergoing significant transformations with the rise of digital banking solutions. C&F Financial Corporation's future strategies in embracing technological advancements and innovation will be crucial in determining its market standing and ability to attract new customers while retaining existing ones.
An economist would scrutinize the return on average tangible common equity (ROATCE), which has also seen a decrease from 17.31% to 13.58%. This metric is particularly telling as it excludes intangible assets from the calculation and thus provides insight into the returns generated from the physical or financial assets of the company. A decline in ROATCE could indicate that the company's asset base is not being utilized as effectively as in the previous year.
The overall economic conditions, including interest rate trends and economic growth rates, would also be examined to understand how they may have impacted the company's performance. For instance, a rising interest rate environment could increase the cost of borrowing and reduce demand for loans, potentially affecting the bank's net interest income and profitability.
Long-term implications for stakeholders include the necessity to track the company's strategic responses to these financial headwinds. How the company adjusts its operations, manages expenses and capitalizes on growth opportunities will be critical in evaluating its future financial health and stock performance.
TOANO, Va., Jan. 24, 2024 (GLOBE NEWSWIRE) -- C&F Financial Corporation (the Corporation) (NASDAQ: CFFI), the holding company for C&F Bank, today reported consolidated net income of
| Reported (GAAP) | Adjusted (non-GAAP)1 | |||||||||||||||
| For The Year Ended | For The Year Ended | |||||||||||||||
| Consolidated Financial Highlights (unaudited) | 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||
| Net income (000's) | $ | 23,746 | $ | 29,369 | $ | 23,746 | $ | 26,990 | ||||||||
| Earnings per share - basic and diluted | $ | 6.92 | $ | 8.29 | $ | 6.92 | $ | 7.61 | ||||||||
| Return on average assets | 0.99 | % | 1.27 | % | 0.99 | % | 1.16 | % | ||||||||
| Return on average equity | 11.68 | % | 14.84 | % | 11.68 | % | 13.64 | % | ||||||||
| Return on average tangible common equity1 | 13.58 | % | 17.31 | % | 13.58 | % | 15.92 | % | ||||||||
________________________
1 For more information about these non-GAAP financial measures, which are 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. The Corporation uses non-GAAP measures of financial performance to provide meaningful information about operating performance to investors by excluding the effects of certain items that management does not expect to have an ongoing impact on consolidated net income. Adjusted net income for the year ended December 31, 2022 and for the fourth quarter of 2022 exclude the effects of real estate disposal activity related to branch consolidation and a change in accounting policy election. No such effects impacted the Corporation’s financial results for the quarter and year ended December 31, 2023.
The Corporation reported quarterly consolidated net income of
| Reported (GAAP) | Adjusted (non-GAAP)1 | |||||||||||||||
| For The Quarter Ended | For The Quarter Ended | |||||||||||||||
| Consolidated Financial Highlights (unaudited) | 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||
| Net income (000's) | $ | 5,088 | $ | 10,306 | $ | 5,088 | $ | 7,990 | ||||||||
| Earnings per share - basic and diluted | $ | 1.50 | $ | 2.97 | $ | 1.50 | $ | 2.30 | ||||||||
| Annualized return on average assets | 0.85 | % | 1.77 | % | 0.85 | % | 1.37 | % | ||||||||
| Annualized return on average equity | 10.06 | % | 21.92 | % | 10.06 | % | 16.99 | % | ||||||||
| Annualized return on average tangible common equity | 11.74 | % | 25.84 | % | 11.74 | % | 20.07 | % | ||||||||
Tom Cherry, President and Chief Executive Officer of C&F Financial Corporation, commented, “2023 will be remembered as one of the more tumultuous years in U.S. banking history and yet still successful by many measures for C&F. Despite the difficulties within the industry, including liquidity pressures, persistent inflation, and a very challenging interest rate environment, all of our business segments remained profitable for the full year and we were able to grow both earning assets and deposits. We believe 2024 and beyond hold many opportunities for C&F, regardless of the uncertainties surrounding the future economic environment.”
Key highlights for the fourth quarter and the year ended December 31, 2023 are as follows.
- Community banking segment loans grew
$27.1 million , or 8.7 percent annualized, and$113.2 million , or 9.8 percent, compared to September 30, 2023 and December 31, 2022, respectively; - Consumer finance segment loans decreased
$2.7 million , or 2.3 percent annualized, and$6.0 million , or 1.3 percent, compared to September 30, 2023 and December 31, 2022, respectively; - Deposits increased
$37.7 million , or 7.4 percent annualized, and$62.3 million , or 3.1 percent, compared to September 30, 2023 and December 31, 2022, respectively; - The community banking segment recorded provision for credit losses of
$75,000 and$100,000 for the fourth quarters of 2023 and 2022, respectively, and recorded provision for credit losses of$1.6 million and net reversals of provision for credit losses of$600,000 for the years ended December 31, 2023 and 2022, respectively; - The consumer finance segment recorded provision for credit losses of
$2.4 million and$1.7 million for the fourth quarters of 2023 and 2022, respectively, and recorded provision for credit losses of$6.7 million and$3.7 million for the years ended December 31, 2023 and 2022, respectively; - Consolidated annualized net interest margin was 4.17 percent for the fourth quarter of 2023 compared to 4.65 percent for the fourth quarter of 2022 and 4.29 percent in the third quarter of 2023. Consolidated net interest margin was 4.31 percent for the year ended December 31, 2023 compared to 4.27 percent for the year ended December 31, 2022;
- The consumer finance segment experienced net charge-offs at an annualized rate of 2.72 percent of average total loans for the fourth quarter of 2023 compared to 1.66 percent for the fourth quarter of 2022 and 1.99 percent for the third quarter of 2023. Net charge-offs as a percentage of average total loans were 1.99 percent for the year ended December 31, 2023, compared to 0.59 percent for the year ended December 31, 2022;
- Mortgage banking segment loan originations decreased
$13.8 million , or 12.3 percent, to$98.2 million for the fourth quarter of 2023 compared to the fourth quarter of 2022 and decreased$198.5 million , or 28.5 percent, to$498.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022; and - On January 1, 2023, the Corporation adopted the Current Expected Credit Loss (CECL) methodology for estimating credit losses, which resulted in a decrease to opening retained earnings of
$1.1 million .
Community Banking Segment. The community banking segment reported net income of
- higher interest expense due primarily to higher rates on deposits and higher borrowing balances at higher rates;
- lower income related to investments in other equity interests for the fourth quarter and year ended December 31, 2023, as
$2.7 million of other income was recognized upon a change in accounting policy election for certain equity investments in the fourth quarter of 2022 that was not repeated in 2023; - provision for credit losses of
$75,000 and$1.6 million for the fourth quarter and year ended December 31, 2023, respectively, compared to$100,000 provision for credit losses and a net reversal of provision for credit losses of$600,000 for the fourth quarter and year ended December 31, 2022, respectively; - higher salaries and employee benefits expense, which have generally increased in line with employment market conditions;
- higher Federal Deposit Insurance Corporation (FDIC) assessment expenses, due primarily to statutory increases applicable to all insured depository institutions;
- higher costs related to the implementation of a new loan origination system;
- higher debit and credit card interchange processing expenses; and
- no gains recognized during the fourth quarter and year ended December 31, 2023 for real estate disposal activity related to branch consolidation as compared to
$165,000 and$228,000 recognized during the fourth quarter and year ended December 31, 2022, respectively;
partially offset by:
- 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 loans.
Adjusted net income for the community banking segment, which excludes the effects of real estate disposal activity related to branch consolidation and a change in accounting policy election related to the fair value of certain equity investments, was
Average loans increased
Average loan yields and average costs of interest-bearing deposits were higher for the fourth quarter and year ended December 31, 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 in 2023. While the community banking segment expects loan yields to continue to rise, management expects costs of deposits to increase faster as time deposits reprice, which management expects to drive net interest margin lower in the first part of 2024.
The community banking segment’s nonaccrual loans were
Mortgage Banking Segment. The mortgage banking segment reported a net loss of
- lower variable expenses tied to mortgage loan origination volume such as commissions and bonuses, reported in salaries and employee benefits, as well as mortgage banking loan processing expenses and data processing expenses;
- higher reversal of provision for indemnifications; and
- lower salaries and employee benefits, occupancy expense and other expenses due to an effort to reduce overhead costs as mortgage loan origination volume has decreased;
partially offset by:
- lower volume of mortgage loan originations.
The mortgage banking segment reported net income of
- lower volume of mortgage loan originations; and
- lower reversal of provision for indemnifications;
partially offset by:
- lower variable expenses tied to mortgage loan origination volume such as commissions and bonuses, reported in salaries and employee benefits, as well as mortgage banking loan processing expenses and data processing expenses;
- higher mortgage lender services income due to an increase in the number of institutional customers served and the types of services provided; and
- lower salaries and employee benefits, occupancy expense and other expenses due to an effort to reduce overhead costs as mortgage loan origination volume has decreased.
The rapid rise in mortgage interest rates during 2022 and 2023, combined with higher home prices and lower levels of inventory, has led to a substantial decline in mortgage loan originations for the mortgage industry during 2023 as compared to 2022. Mortgage loan originations for the mortgage banking segment were
During the fourth quarter and year ended December 31, 2023, the mortgage banking segment recorded a reversal of provision for indemnification losses of
Consumer Finance Segment. The consumer finance segment reported net income of
- higher interest expense on variable rate borrowings from the community banking segment as a result of increased market interest rates; 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 for the year ended December 31, 2023 compared to the year ended December 31, 2022, and from the effects of rising market interest rates for both the fourth quarter and year ended December 31, 2023, compared to the same periods in 2022.
Average loans decreased
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 an estimate of amounts above the FDIC insurance coverage limit of
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 Federal Home loan Bank of Atlanta (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
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 cash dividends during the year ended December 31, 2023 totaling
Total consolidated equity increased
As of December 31, 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 December 31, 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 December 31, 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
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
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 adjusted net income, adjusted earnings per share, adjusted return on average equity, adjusted return on average assets, return on average tangible common equity (ROTCE), adjusted ROTCE, tangible book value per share, price to tangible book value ratio, 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 interest rates and 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
- 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 conflicts between Russia and Ukraine and in the Middle East) 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 and 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 | 12/31/2023 | 12/31/2022 | |||||
| Interest-bearing deposits in other banks | $ | 58,777 | $ | 7,051 | |||
| Investment securities - available for sale, at fair value | 462,444 | 512,591 | |||||
| Loans held for sale, at fair value | 14,176 | 14,259 | |||||
| Loans, net: | |||||||
| Community Banking segment | 1,257,557 | 1,145,940 | |||||
| Mortgage Banking segment | - | 671 | |||||
| Consumer Finance segment | 444,931 | 448,589 | |||||
| Total assets | 2,438,498 | 2,332,317 | |||||
| Deposits | 2,066,130 | 2,003,860 | |||||
| Repurchase agreements | 30,705 | 34,481 | |||||
| Other borrowings | 78,834 | 57,603 | |||||
| Total equity | 217,516 | 196,233 | |||||
| For The | For The | ||||||||||||||||
| Quarter Ended | Year Ended | ||||||||||||||||
| Results of Operations | 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | |||||||||||||
| Interest income | $ | 32,408 | $ | 28,405 | $ | 124,137 | $ | 101,354 | |||||||||
| Interest expense | 8,466 | 2,428 | 26,430 | 7,890 | |||||||||||||
| Provision for credit losses: | |||||||||||||||||
| Community Banking segment | 75 | 100 | 1,625 | (600 | ) | ||||||||||||
| Mortgage Banking segment | - | - | - | 32 | |||||||||||||
| Consumer Finance segment | 2,400 | 1,670 | 6,650 | 3,740 | |||||||||||||
| Noninterest income: | |||||||||||||||||
| Gains on sales of loans | 850 | 735 | 5,780 | 7,498 | |||||||||||||
| Other | 6,953 | 9,226 | 23,835 | 20,984 | |||||||||||||
| Noninterest expenses: | |||||||||||||||||
| Salaries and employee benefits | 14,035 | 13,167 | 54,876 | 47,867 | |||||||||||||
| Other | 9,038 | 8,244 | 35,007 | 33,943 | |||||||||||||
| Income tax expense | 1,109 | 2,451 | 5,418 | 7,595 | |||||||||||||
| Net income | 5,088 | 10,306 | 23,746 | 29,369 | |||||||||||||
| Fully-taxable equivalent (FTE) amounts1 | |||||||||||||||||
| Interest income on loans-FTE | 29,147 | 25,311 | 111,146 | 90,987 | |||||||||||||
| Interest income on securities-FTE | 3,121 | 3,019 | 12,710 | 9,674 | |||||||||||||
| Total interest income-FTE | 32,677 | 28,587 | 125,101 | 101,939 | |||||||||||||
| Net interest income-FTE | 24,211 | 26,159 | 98,671 | 94,049 | |||||||||||||
________________________
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 Quarter Ended | ||||||||||||||||||||
| 12/31/2023 | 12/31/2022 | |||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||
| Yield Analysis | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||
| Assets | ||||||||||||||||||||
| Securities: | ||||||||||||||||||||
| Taxable | $ | 392,368 | $ | 2,093 | 2.13 | % | $ | 463,173 | $ | 2,354 | 2.03 | % | ||||||||
| Tax-exempt | 118,263 | 1,028 | 3.48 | 90,142 | 665 | 2.95 | ||||||||||||||
| Total securities | 510,631 | 3,121 | 2.44 | 553,315 | 3,019 | 2.18 | ||||||||||||||
| Loans: | ||||||||||||||||||||
| Community banking segment | 1,257,418 | 16,813 | 5.30 | 1,142,543 | 13,483 | 4.68 | ||||||||||||||
| Mortgage banking segment | 22,288 | 383 | 6.82 | 23,611 | 362 | 6.08 | ||||||||||||||
| Consumer finance segment | 471,355 | 11,951 | 10.06 | 472,614 | 11,466 | 9.63 | ||||||||||||||
| Total loans | 1,751,061 | 29,147 | 6.60 | 1,638,768 | 25,311 | 6.13 | ||||||||||||||
| Interest-bearing deposits in other banks | 42,114 | 409 | 3.85 | 40,522 | 257 | 2.52 | ||||||||||||||
| Total earning assets | 2,303,806 | 32,677 | 5.63 | 2,232,605 | 28,587 | 5.08 | ||||||||||||||
| Allowance for credit losses | (40,614 | ) | (41,450 | ) | ||||||||||||||||
| Total non-earning assets | 142,252 | 141,775 | ||||||||||||||||||
| Total assets | $ | 2,405,444 | $ | 2,332,930 | ||||||||||||||||
| Liabilities and Equity | ||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||
| Interest-bearing demand deposits | $ | 341,243 | 556 | 0.65 | $ | 356,943 | 468 | 0.52 | ||||||||||||
| Money market deposit accounts | 299,712 | 896 | 1.19 | 388,392 | 314 | 0.32 | ||||||||||||||
| Savings accounts | 194,476 | 33 | 0.07 | 235,191 | 31 | 0.05 | ||||||||||||||
| Certificates of deposit | 635,702 | 5,665 | 3.54 | 382,191 | 926 | 0.96 | ||||||||||||||
| Total interest-bearing deposits | 1,471,133 | 7,150 | 1.93 | 1,362,717 | 1,739 | 0.51 | ||||||||||||||
| Borrowings: | ||||||||||||||||||||
| Repurchase agreements | 33,418 | 126 | 1.51 | 35,963 | 59 | 0.66 | ||||||||||||||
| Other borrowings | 98,875 | 1,190 | 4.81 | 55,866 | 630 | 4.51 | ||||||||||||||
| Total borrowings | 132,293 | 1,316 | 3.98 | 91,829 | 689 | 3.00 | ||||||||||||||
| Total interest-bearing liabilities | 1,603,426 | 8,466 | 2.10 | 1,454,546 | 2,428 | 0.66 | ||||||||||||||
| Noninterest-bearing demand deposits | 554,321 | 649,951 | ||||||||||||||||||
| Other liabilities | 45,462 | 40,363 | ||||||||||||||||||
| Total liabilities | 2,203,209 | 2,144,860 | ||||||||||||||||||
| Equity | 202,235 | 188,070 | ||||||||||||||||||
| Total liabilities and equity | $ | 2,405,444 | $ | 2,332,930 | ||||||||||||||||
| Net interest income | $ | 24,211 | $ | 26,159 | ||||||||||||||||
| Interest rate spread | 3.53 | % | 4.42 | % | ||||||||||||||||
| Interest expense to average earning assets | 1.46 | % | 0.43 | % | ||||||||||||||||
| Net interest margin | 4.17 | % | 4.65 | % | ||||||||||||||||
| For the Year Ended | ||||||||||||||||||||
| 12/31/2023 | 12/31/2022 | |||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||
| Yield Analysis | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||
| Assets | ||||||||||||||||||||
| Securities: | ||||||||||||||||||||
| Taxable | $ | 428,895 | $ | 9,110 | 2.12 | % | $ | 415,669 | $ | 7,620 | 1.83 | % | ||||||||
| Tax-exempt | 108,006 | 3,600 | 3.33 | 77,052 | 2,054 | 2.67 | ||||||||||||||
| Total securities | 536,901 | 12,710 | 2.37 | 492,721 | 9,674 | 1.96 | ||||||||||||||
| Loans: | ||||||||||||||||||||
| Community banking segment | 1,214,143 | 62,188 | 5.12 | 1,076,948 | 46,510 | 4.32 | ||||||||||||||
| Mortgage banking segment | 25,598 | 1,695 | 6.62 | 46,185 | 2,036 | 4.41 | ||||||||||||||
| Consumer finance segment | 473,885 | 47,263 | 9.97 | 431,470 | 42,441 | 9.84 | ||||||||||||||
| Total loans | 1,713,626 | 111,146 | 6.49 | 1,554,603 | 90,987 | 5.85 | ||||||||||||||
| Interest-bearing deposits in other banks | 35,351 | 1,245 | 3.52 | 153,398 | 1,278 | 0.83 | ||||||||||||||
| Total earning assets | 2,285,878 | 125,101 | 5.47 | 2,200,722 | 101,939 | 4.63 | ||||||||||||||
| Allowance for loan losses | (41,047 | ) | (40,878 | ) | ||||||||||||||||
| Total non-earning assets | 148,666 | 159,839 | ||||||||||||||||||
| Total assets | $ | 2,393,497 | $ | 2,319,683 | ||||||||||||||||
| Liabilities and Equity | ||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||
| Interest-bearing demand deposits | $ | 354,643 | 2,134 | 0.60 | $ | 350,996 | 1,063 | 0.30 | ||||||||||||
| Money market deposit accounts | 317,601 | 3,017 | 0.95 | 390,235 | 1,043 | 0.27 | ||||||||||||||
| Savings accounts | 209,033 | 124 | 0.06 | 231,317 | 122 | 0.05 | ||||||||||||||
| Certificates of deposit | 541,252 | 15,112 | 2.79 | 392,579 | 2,996 | 0.76 | ||||||||||||||
| Total interest-bearing deposits | 1,422,529 | 20,387 | 1.43 | 1,365,127 | 5,224 | 0.38 | ||||||||||||||
| Borrowings: | ||||||||||||||||||||
| Repurchase agreements | 32,393 | 399 | 1.23 | 35,544 | 180 | 0.51 | ||||||||||||||
| Other borrowings | 116,908 | 5,644 | 4.83 | 55,701 | 2,486 | 4.46 | ||||||||||||||
| Total borrowings | 149,301 | 6,043 | 4.05 | 91,245 | 2,666 | 2.92 | ||||||||||||||
| Total interest-bearing liabilities | 1,571,830 | 26,430 | 1.68 | 1,456,372 | 7,890 | 0.54 | ||||||||||||||
| Noninterest-bearing demand deposits | 575,452 | 624,581 | ||||||||||||||||||
| Other liabilities | 42,954 | 40,854 | ||||||||||||||||||
| Total liabilities | 2,190,236 | 2,121,807 | ||||||||||||||||||
| Equity | 203,261 | 197,876 | ||||||||||||||||||
| Total liabilities and equity | $ | 2,393,497 | $ | 2,319,683 | ||||||||||||||||
| Net interest income | $ | 98,671 | $ | 94,049 | ||||||||||||||||
| Interest rate spread | 3.79 | % | 4.09 | % | ||||||||||||||||
| Interest expense to average earning assets | 1.16 | % | 0.36 | % | ||||||||||||||||
| Net interest margin | 4.31 | % | 4.27 | % | ||||||||||||||||
| 12/31/2023 | ||||||||||
| Funding Sources | Capacity | Outstanding | Available | |||||||
| Unsecured federal funds agreements | $ | 75,000 | $ | 18 | $ | 74,982 | ||||
| Borrowings from FHLB | 228,382 | 27,500 | 200,882 | |||||||
| Borrowings from Federal Reserve Bank | 219,244 | — | 219,244 | |||||||
| Total | $ | 522,626 | $ | 27,518 | $ | 495,108 | ||||
| Asset Quality1 | 12/31/2023 | 12/31/2022 | ||||||
| Community Banking | ||||||||
| Total loans | $ | 1,273,629 | $ | 1,160,454 | ||||
| Nonaccrual loans | $ | 406 | $ | 115 | ||||
| Impaired loans | n/a | $ | 823 | |||||
| Allowance for credit losses (ACL) | $ | 16,072 | $ | 14,513 | ||||
| Nonaccrual loans to total loans | 0.03 | % | 0.01 | % | ||||
| ACL to total loans | 1.26 | % | 1.25 | % | ||||
| ACL to nonaccrual loans | 3,958.62 | % | 12,620.00 | % | ||||
| Year-to-date net 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 | % | ||||
| Year-to-date net charge-offs to average loans | - | % | - | % | ||||
| Consumer Finance | ||||||||
| Total loans | $ | 468,510 | $ | 474,557 | ||||
| Nonaccrual loans | $ | 892 | $ | 925 | ||||
| Repossessed assets | $ | 646 | $ | 352 | ||||
| ACL | $ | 23,579 | $ | 25,969 | ||||
| Nonaccrual loans to total loans | 0.19 | % | 0.19 | % | ||||
| ACL to total loans | 5.03 | % | 5.47 | % | ||||
| ACL to nonaccrual loans | 2,643.39 | % | 2,807.46 | % | ||||
| Year-to-date net charge-offs to average loans | 1.99 | % | 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 | Year Ended | |||||||||||||||||||
| Other Performance Data | 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||||||
| Net Income (Loss): | ||||||||||||||||||||
| Community Banking | $ | 5,186 | $ | 10,620 | $ | 22,928 | $ | 24,374 | ||||||||||||
| Mortgage Banking | (103 | ) | (462 | ) | 465 | 1,210 | ||||||||||||||
| Consumer Finance | 618 | 795 | 2,879 | 6,831 | ||||||||||||||||
| Other1 | (613 | ) | (647 | ) | (2,526 | ) | (3,046 | ) | ||||||||||||
| Total | $ | 5,088 | $ | 10,306 | $ | 23,746 | $ | 29,369 | ||||||||||||
| Net income attributable to C&F Financial Corporation | $ | 5,068 | $ | 10,308 | $ | 23,604 | $ | 29,159 | ||||||||||||
| Earnings per share - basic and diluted | $ | 1.50 | $ | 2.97 | $ | 6.92 | $ | 8.29 | ||||||||||||
| Weighted average shares outstanding - basic and diluted | 3,367,931 | 3,475,716 | 3,411,995 | 3,517,114 | ||||||||||||||||
| Annualized return on average assets | 0.85 | % | 1.77 | % | 0.99 | % | 1.27 | % | ||||||||||||
| Annualized return on average equity | 10.06 | % | 21.92 | % | 11.68 | % | 14.84 | % | ||||||||||||
| Annualized return on average tangible common equity2 | 11.74 | % | 25.84 | % | 13.58 | % | 17.31 | % | ||||||||||||
| Dividends declared per share | $ | 0.44 | $ | 0.42 | $ | 1.76 | $ | 1.64 | ||||||||||||
| Mortgage loan originations - Mortgage Banking | $ | 98,238 | $ | 112,065 | $ | 498,797 | $ | 697,323 | ||||||||||||
| Mortgage loans sold - Mortgage Banking | 109,387 | 130,910 | 498,852 | 763,041 | ||||||||||||||||
________________________
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 | 12/31/2023 | 12/31/2022 | ||||||
| Market value per share | $ | 68.19 | $ | 58.27 | ||||
| Book value per share | $ | 64.16 | $ | 56.27 | ||||
| Price to book value ratio | 1.06 | 1.04 | ||||||
| Tangible book value per share1 | $ | 56.28 | $ | 48.54 | ||||
| Price to tangible book value ratio1 | 1.21 | 1.20 | ||||||
| Price to earnings ratio (ttm) | 9.87 | 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 | 12/31/2023 | 12/31/2022 | Requirements3 | |||||||
| C&F Financial Corporation1 | ||||||||||
| Total risk-based capital ratio | 14.8 | % | 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 | 10.1 | % | 9.9 | % | 4.0 | % | ||||
| C&F Bank2 | ||||||||||
| Total risk-based capital ratio | 14.1 | % | 14.2 | % | 8.0 | % | ||||
| Tier 1 risk-based capital ratio | 12.9 | % | 12.9 | % | 6.0 | % | ||||
| Common equity tier 1 capital ratio | 12.9 | % | 12.9 | % | 4.5 | % | ||||
| Tier 1 leverage ratio | 10.3 | % | 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 December 31, 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 Year Ended | ||||||||||||||||||
| 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||||||
| Reconciliation of Certain Non-GAAP Financial Measures | |||||||||||||||||||
| Adjusted Net Income and Adjusted Earnings Per Share | |||||||||||||||||||
| Net income, as reported | $ | 5,088 | $ | 10,306 | $ | 23,746 | $ | 29,369 | |||||||||||
| Branch consolidation - disposal of real estate1 | - | (165 | ) | - | (228 | ) | |||||||||||||
| Change in accounting policy election2 | - | (2,151 | ) | - | (2,151 | ) | |||||||||||||
| Adjusted net income | $ | 5,088 | $ | 7,990 | $ | 23,746 | $ | 26,990 | |||||||||||
| Weighted average shares - basic and diluted | 3,367,931 | 3,475,716 | 3,411,995 | 3,517,114 | |||||||||||||||
| Earnings per share - basic and diluted, as reported | $ | 1.50 | $ | 2.97 | $ | 6.92 | $ | 8.29 | |||||||||||
| Branch consolidation - disposal of real estate | - | (0.05 | ) | - | (0.07 | ) | |||||||||||||
| Change in accounting policy election | - | (0.62 | ) | - | (0.61 | ) | |||||||||||||
| Adjusted earnings per share - basic and diluted | $ | 1.50 | $ | 2.30 | $ | 6.92 | $ | 7.61 | |||||||||||
| Adjusted Return on Average Equity (ROE) | |||||||||||||||||||
| Average total equity, as reported | $ | 202,235 | $ | 188,070 | $ | 203,261 | $ | 197,876 | |||||||||||
| Annualized ROE, as reported | 10.06 | % | 21.92 | % | 11.68 | % | 14.84 | % | |||||||||||
| Adjusted annualized ROE | 10.06 | % | 16.99 | % | 11.68 | % | 13.64 | % | |||||||||||
| Adjusted Return on Average Assets (ROA) | |||||||||||||||||||
| Average total assets, as reported | $ | 2,405,444 | $ | 2,332,930 | $ | 2,393,497 | $ | 2,319,683 | |||||||||||
| Annualized ROA, as reported | 0.85 | % | 1.77 | % | 0.99 | % | 1.27 | % | |||||||||||
| Adjusted annualized ROA | 0.85 | % | 1.37 | % | 0.99 | % | 1.16 | % | |||||||||||
| Return on Average Tangible Common Equity & Adjusted Return on Average Tangible Common Equity | |||||||||||||||||||
| Average total equity, as reported | $ | 202,235 | $ | 188,070 | $ | 203,261 | $ | 197,876 | |||||||||||
| Average goodwill | (25,191 | ) | (25,191 | ) | (25,191 | ) | (25,191 | ) | |||||||||||
| Average other intangible assets | (1,439 | ) | (1,710 | ) | (1,538 | ) | (1,820 | ) | |||||||||||
| Average noncontrolling interest | (515 | ) | (434 | ) | (675 | ) | (737 | ) | |||||||||||
| Average tangible common equity | $ | 175,090 | $ | 160,735 | $ | 175,857 | $ | 170,128 | |||||||||||
| Net income | $ | 5,088 | $ | 10,306 | $ | 23,746 | $ | 29,369 | |||||||||||
| Amortization of intangibles | 69 | 74 | 273 | 298 | |||||||||||||||
| Net loss (income) attributable to noncontrolling interest | (20 | ) | 2 | (142 | ) | (210 | ) | ||||||||||||
| Net tangible income attributable to C&F Financial Corporation | $ | 5,137 | $ | 10,382 | $ | 23,877 | $ | 29,457 | |||||||||||
| Adjusted net income | $ | 5,088 | $ | 7,990 | $ | 23,746 | $ | 26,990 | |||||||||||
| Amortization of intangibles | 69 | 74 | 273 | 298 | |||||||||||||||
| Net loss (income) attributable to noncontrolling interest | (20 | ) | 2 | (142 | ) | (210 | ) | ||||||||||||
| Adjusted net tangible income attributable to C&F Financial Corporation | $ | 5,137 | $ | 8,066 | $ | 23,877 | $ | 27,078 | |||||||||||
| Annualized return on average tangible common equity | 11.74 | % | 25.84 | % | 13.58 | % | 17.31 | % | |||||||||||
| Adjusted annualized return on average tangible common equity | 11.74 | % | 20.07 | % | 13.58 | % | 15.92 | % | |||||||||||
| Adjusted Net Income, Community Banking Segment | |||||||||||||||||||
| Net income, community banking segment, as reported | $ | 5,186 | $ | 10,620 | $ | 22,928 | $ | 24,374 | |||||||||||
| Branch consolidation - disposal of real estate1 | - | (165 | ) | - | (228 | ) | |||||||||||||
| Change in accounting policy election2 | - | (2,151 | ) | - | (2,151 | ) | |||||||||||||
| Adjusted net income, community banking segment | $ | 5,186 | $ | 8,304 | $ | 22,928 | $ | 21,995 | |||||||||||
________________________
1 Branch consolidation – disposal of real estate gains are gains recognized on the sale of former branch locations subsequent to consolidation into nearby branches and are net of related income taxes of
2 A change in accounting policy election for certain equity investments, primarily consisting of equity interests in an independent insurance agency and a full service title and settlement agency, resulted in fair value adjustments in the fourth quarter of 2022, which resulted in the one-time recognition of additional other income of
| For The Quarter Ended | For The Year Ended | ||||||||||||||
| 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||
| Fully Taxable Equivalent Net Interest Income1 | |||||||||||||||
| Interest income on loans | $ | 29,093 | $ | 25,267 | $ | 110,938 | $ | 90,833 | |||||||
| FTE adjustment | 54 | 44 | 208 | 154 | |||||||||||
| FTE interest income on loans | $ | 29,147 | $ | 25,311 | $ | 111,146 | $ | 90,987 | |||||||
| Interest income on securities | $ | 2,906 | $ | 2,881 | $ | 11,954 | $ | 9,243 | |||||||
| FTE adjustment | 215 | 138 | 756 | 431 | |||||||||||
| FTE interest income on securities | $ | 3,121 | $ | 3,019 | $ | 12,710 | $ | 9,674 | |||||||
| Total interest income | $ | 32,408 | $ | 28,405 | $ | 124,137 | $ | 101,354 | |||||||
| FTE adjustment | 269 | 182 | 964 | 585 | |||||||||||
| FTE interest income | $ | 32,677 | $ | 28,587 | $ | 125,101 | $ | 101,939 | |||||||
| Net interest income | $ | 23,942 | $ | 25,977 | $ | 97,707 | $ | 93,464 | |||||||
| FTE adjustment | 269 | 182 | 964 | 585 | |||||||||||
| FTE net interest income | $ | 24,211 | $ | 26,159 | $ | 98,671 | $ | 94,049 | |||||||
____________________
1 Assuming a tax rate of
| 12/31/2023 | 12/31/2022 | |||||||
| Tangible Book Value Per Share | ||||||||
| Equity attributable to C&F Financial Corporation | $ | 216,475 | $ | 195,634 | ||||
| Goodwill | (25,191 | ) | (25,191 | ) | ||||
| Other intangible assets | (1,407 | ) | (1,679 | ) | ||||
| Tangible equity attributable to C&F Financial Corporation | $ | 189,877 | $ | 168,764 | ||||
| Shares outstanding | 3,374,098 | 3,476,614 | ||||||
| Book value per share | $ | 64.16 | $ | 56.27 | ||||
| Tangible book value per share | $ | 56.28 | $ | 48.54 | ||||
FAQ
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