C&F Financial Corporation Announces Net Income for 2022
C&F Financial Corporation (NASDAQ: CFFI) reported a consolidated net income of $29.4 million for the year ended December 31, 2022, showing a slight increase from $29.1 million in 2021. Adjusted net income decreased by 10.1% to $27.0 million, impacted by the mortgage banking segment's 62.3% drop in loan originations due to rising interest rates. The community banking segment thrived, contributing $10.6 million in net income for Q4 2022, a significant rise from $3.2 million in Q4 2021, fueled by higher interest income. Total net income for Q4 2022 was $10.3 million, reflecting a 70.6% jump year-over-year.
- Community banking segment's net income increased significantly by $7.4 million in Q4 2022 compared to Q4 2021.
- Total net income for Q4 2022 showed a 70.6% increase year-over-year, reaching $10.3 million.
- Community banking loans grew by $65.1 million or 23.8% annualized in Q4 2022.
- Consumer finance segment loans rose by $8.9 million or 7.6% annualized in Q4 2022.
- Adjusted net income decreased by $3 million or 10.1% for the year ended December 31, 2022.
- Mortgage banking segment's loan originations plummeted by 62.3% in Q4 2022 compared to Q4 2021.
- Consumer finance segment's net income dropped by $1.6 million in Q4 2022 compared to Q4 2021.
TOANO, Va., Jan. 24, 2023 (GLOBE NEWSWIRE) -- C&F Financial Corporation (the Corporation) (NASDAQ: CFFI), the one-bank 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) | 12/31/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | ||||||||||||
| Net income (000's) | $ | 29,369 | $ | 29,123 | $ | 26,990 | $ | 30,011 | ||||||||
| Earnings per share - basic and diluted | $ | 8.29 | $ | 7.95 | $ | 7.61 | $ | 8.20 | ||||||||
| Return on average assets | 1.27 | % | 1.34 | % | 1.16 | % | 1.38 | % | ||||||||
| Return on average equity | 14.84 | % | 14.77 | % | 13.64 | % | 15.22 | % | ||||||||
| Return on average tangible common equity1 | 17.31 | % | 17.15 | % | 15.92 | % | 17.68 | % | ||||||||
________________________
1The Corporation uses non-GAAP measures of financial performance, including adjusted net income, adjusted earnings per share, adjusted annualized return on average assets (ROA), adjusted annualized return on average equity (ROE), annualized return on average tangible common equity (ROTCE) and adjusted annualized ROTCE, 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 years ended December 31, 2022 and 2021 and for the fourth quarters of 2022 and 2021 exclude the effects of real estate disposal activity related to branch consolidation, a change in accounting policy election and pension settlement charges. For more information about these 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 reported quarterly consolidated net income of
| Reported (GAAP) | Adjusted (non-GAAP)1 | |||||||||||||||
| For The Quarter Ended | For The Quarter Ended | |||||||||||||||
| Consolidated Financial Highlights (unaudited) | 12/31/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | ||||||||||||
| Net income (000's) | $ | 10,306 | $ | 6,041 | $ | 7,990 | $ | 7,036 | ||||||||
| Earnings per share - basic and diluted | $ | 2.97 | $ | 1.67 | $ | 2.30 | $ | 1.95 | ||||||||
| Annualized return on average assets | 1.77 | % | 1.08 | % | 1.37 | % | 1.26 | % | ||||||||
| Annualized return on average equity | 21.92 | % | 11.89 | % | 16.99 | % | 13.84 | % | ||||||||
| Annualized return on average tangible common equity | 25.84 | % | 13.67 | % | 20.07 | % | 15.93 | % | ||||||||
“Our solid results for 2022 were a product of the diversified business strategy we have built, along with responsible growth,” commented Tom Cherry, President and Chief Executive Officer of C&F Financial Corporation. “While our mortgage banking segment’s earnings were lower due to a substantial decline in volume of loans sold, consistent with the industry as a whole, and our consumer finance segment’s earnings were negatively impacted by an increase in borrowing costs, our community banking segment’s earnings grew significantly. With the impact of rising short term interest rates, coupled with earning-asset growth, the community banking segment performed extremely well this year with strong momentum heading into 2023, especially with the recent opening of our new financial center in downtown Fredericksburg. The consumer finance segment saw record loan growth, and delinquencies and net charge-offs remain below pre-pandemic levels, however increased borrowing costs compressed margins which had an adverse effect on earnings. We’re excited about the position C&F is in and look forward to the opportunities this new year brings.”
Key highlights for the fourth quarter of 2022 and the year ended December 31, 2022 are as follows.
- Community banking segment loans as of December 31, 2022 grew
$65.1 million , or 23.8 percent annualized, compared to September 30, 2022, excluding the effect of Paycheck Protection Program (PPP) loans. Average community bank segment loans increased 13.4 percent and 9.9 percent for the fourth quarter and year ended December 31, 2022, respectively, compared to the same periods in 2021, excluding the effect of PPP loans; - Consumer finance segment loans as of December 31, 2022 grew
$8.9 million , or 7.6 percent annualized, compared to September 30, 2022. Average consumer finance segment loans increased 31.6 percent and 29.0 percent for the fourth quarter and year ended December 31, 2022, respectively, compared to the same periods in 2021; - Deposits as of December 31, 2022 decreased
$15.8 million , or 3.1 percent annualized, compared to September 30, 2022, which is consistent with industry trends of deposit outflows. Average deposits increased 6.8 percent and 8.4 percent for the fourth quarter and year ended December 31, 2022, respectively, compared to the same periods in 2021; - The community banking segment recorded provision for loan losses of
$100,000 for the fourth quarter of 2022 and recorded no provision for loan losses for the fourth quarter of 2021. For the years ended December 31, 2022 and 2021, the community banking segment recorded net reversals of provision for loan losses of$600,000 and$200,000 , respectively; - The consumer finance segment recorded provision for loan losses of
$1.7 million and$600,000 for the fourth quarters of 2022 and 2021, respectively. For the years ended December 31, 2022 and 2021, the consumer finance segment recorded provision for loan losses of$3.7 million and$820,000 , respectively; - Consolidated annualized net interest margin was 4.65 percent for the fourth quarter of 2022, compared to 4.09 percent and 4.37 percent for the fourth quarter of 2021 and third quarter of 2022, respectively. The increase in the fourth quarter of 2022 compared to the third quarter of 2022 and fourth quarter of 2021 was due primarily to growth in consumer finance and community banking loans, as well as higher average yields on earning assets, including the effects of rising market interest rates. Consolidated net interest margin was 4.27 percent for the year ended December 31, 2022, compared to 4.26 percent for the year ended December 31, 2021. Accretion of net PPP origination fees contributed approximately zero basis points and 3 basis points to net interest margin for the fourth quarter of 2022 and the year ended December 31, 2022, respectively, compared to 13 basis points and 20 basis points for the same periods in 2021;
- The community banking segment recognized no net PPP origination fees in the fourth quarter of 2022 and
$679,000 in the year ended December 31, 2022, compared to$692,000 and$4.1 million in the fourth quarter and year ended December 31, 2021, respectively. All net PPP origination fees received by C&F Bank had been recognized in income as of June 30, 2022; - The consumer finance segment experienced net charge-offs at an annualized rate of 1.66 percent of average total loans for the fourth quarter of 2022, compared to net recoveries of 0.29 for the fourth quarter of 2021. Net charge-offs as a percentage of average total loans were 0.59 percent for the year ended December 31, 2022, compared to net recoveries of 0.14 for the year ended December 31, 2021. Charge-offs and delinquencies remain lower than pre-pandemic levels;
- The consumer finance segment’s average loan yield declined as a result of pursuing growth in higher quality, lower yielding loans, partially offset by rising interest rates;
- The consumer finance segment’s cost on variable rate borrowings from the community banking segment increased due to rising interest rates, which had a corresponding benefit to the community banking segment, and is eliminated upon consolidation;
- Mortgage banking segment loan originations decreased 62.3 percent and 52.2 percent for the fourth quarter and year ended December 31, 2022 amid rising mortgage interest rates and declines in mortgage industry volume; and
- The community banking segment opened the newest C&F Financial Center in Fredericksburg in December 2022. This office provides a one-stop experience for retail and business banking services as well as mortgage and wealth management solutions.
Community Banking Segment. The community banking segment reported net income of
Community banking segment net income increased
- higher interest income resulting from higher average balances of interest-earning assets, including loans and securities, and the effects of rising interest rates on asset yields, including on variable rate loans to the consumer finance segment;
- the recognition of
$2.8 million in other income from positive fair value adjustments of other investments in the fourth quarter of 2022, of which$2.7 million was recognized upon 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; - higher revenue from overdraft fees and debit card interchange fees;
- the sale of two other real estate owned (OREO) properties in the first quarter of 2022 and fourth quarter of 2022, which resulted in gains of
$80,000 and$209,000 , respectively; - a reversal of provision for loan losses of
$600,000 for the year ended December 31, 2022, due primarily to the resolution of certain impaired loans and continued strong credit quality of the loan portfolio, compared to a reversal of provision for loan losses of$200,000 for the year ended December 31, 2021; and - a
$1.3 million pension settlement charge in the fourth quarter of 2021 in connection with certain lump sum benefit payments during the year ended December 31, 2021 that was not repeated during 2022;
partially offset by:
- lower recognition of net PPP origination fees and lower interest income on purchased credit impaired (PCI) loans;
- higher salaries and employee benefits expense, including adding new talent to the commercial lending team;
- the sale of an OREO property in the second quarter of 2021, which resulted in a gain of
$399,000 ; and - higher marketing and travel expense as typical programs and community and educational events return to normalized levels after reduced activity due to COVID-19 during 2021.
Adjusted net income for the community banking segment, which excludes the effects of real estate disposal activity related to branch consolidation, a change in accounting policy election and pension settlement charges, was
Average loans increased
Average loan yields were higher for the fourth quarter of 2022 compared to the fourth quarter of 2021, due primarily to the effects of rising interest rates. Average loan yields were lower for the year ended December 31, 2022 compared to the year ended December 31, 2021, due primarily to lower recognition of net origination fees on PPP loans and lower interest income on PCI loans, partially offset by the effects of rising interest rates during 2022. PPP loans earn interest at a note rate of one percent as well as net origination fees that were amortized over the contractual term of the related loan or accelerated into interest income upon repayment of the loan. There were no net PPP origination fees recognized in the fourth quarter of 2022 and
C&F Bank’s total nonperforming assets were
Mortgage Banking Segment. The mortgage banking segment reported a net loss of
The decrease in net income of the mortgage banking segment for the fourth quarter and year ended December 31, 2022 compared to the same periods in 2021 was due primarily to lower volume of mortgage loan originations and mortgage lender services, lower margins on sales of mortgage loans, and lower average balances of loans held for sale, partially offset by lower expenses tied to mortgage loan origination volume such as salaries and employee benefits, loan processing, and data processing and lower provision for indemnification reserves.
Following the elevated volume levels in the mortgage industry during 2020 and 2021 that accompanied historically low mortgage interest rates and a highly active residential real estate market, the rapid rise in mortgage interest rates during 2022, combined with higher home prices, has led to a substantial decline in mortgage loan originations. Mortgage loan originations for the mortgage banking segment were
During the fourth quarter and year ended December 31, 2022, the mortgage banking segment recorded no provision for indemnification losses and a reversal of provision for indemnification losses of
Consumer Finance Segment. The consumer finance segment reported net income of
Net income for the consumer finance segment decreased
Average loans outstanding increased
Capital and Dividends. The Corporation declared cash dividends during the year ended December 31, 2022 totaling
Total consolidated equity decreased
In November 2021, the Board of Directors authorized a program, effective December 1, 2021, to repurchase up to
About C&F Financial Corporation. C&F Financial 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 RV 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 ROE, adjusted ROA, ROTCE, adjusted 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 items that do not reflect ongoing operating performance, 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, technology initiatives, our diversified business strategy, asset quality, credit quality, adequacy of allowances for loan losses and the level of future charge-offs, adequacy of the reserve for indemnification losses related to loans sold in the secondary market, capital levels, 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: (1) interest rates, such as volatility in short-term interest rates or yields on U.S. Treasury bonds and increases or volatility in mortgage interest rates, (2) general business conditions, as well as conditions within the financial markets, (3) 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 and the heightened impact it has on many of the risks described herein and in other periodic reports the Corporation files with the SEC, (4) 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, (5) attracting, hiring, training, motivating and retaining qualified employees, (6) the legislative/regulatory climate, regulatory initiatives with respect to financial institutions, products and services, the Consumer Financial Protection Bureau (CFPB) and the regulatory and enforcement activities of the CFPB, (7) monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, and the effect of these policies on interest rates and business in our markets, (8) the value of securities held in the Corporation’s investment portfolios, (9) the quality or composition of the loan portfolios and the value of the collateral securing those loans, (10) the inventory level, demand and fluctuations in the pricing of used automobiles, including sales prices of repossessed vehicles, (11) the level of net charge-offs on loans and the adequacy of our allowance for loan losses, (12) the level of indemnification losses related to mortgage loans sold, (13) demand for loan products, (14) deposit flows, (15) the strength of the Corporation’s counterparties, (16) competition from both banks and non-banks, including competition in the non-prime automobile finance markets, (17) demand for financial services in the Corporation’s market area, (18) reliance on third parties for key services, (19) the commercial and residential real estate markets, (20) demand for residential mortgages and conditions in the secondary residential mortgage loan markets, (21) the Corporation’s technology initiatives and other strategic initiatives, (22) the Corporation’s branch expansions and consolidations, (23) cyber threats, attacks or events, (24) expansion of C&F Bank’s product offerings, and (25) accounting principles, policies and guidelines, and elections by the Corporation thereunder. 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, 2021 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.
C&F Financial Corporation
Selected Financial Information
(dollars in thousands, except for per share data)
(unaudited)
| Financial Condition | 12/31/2022 | 12/31/2021 | |||||
| Interest-bearing deposits in other banks | $ | 7,051 | $ | 248,053 | |||
| Investment securities - available for sale, at fair value | 512,591 | 373,073 | |||||
| Loans held for sale, at fair value | 14,259 | 82,295 | |||||
| Loans, net: | |||||||
| Community Banking segment, excluding PPP loans | 1,145,477 | 999,912 | |||||
| PPP loans | 463 | 17,762 | |||||
| Mortgage Banking segment | 671 | 8,826 | |||||
| Consumer Finance segment | 448,589 | 343,403 | |||||
| Total assets | 2,332,317 | 2,264,521 | |||||
| Deposits | 2,003,860 | 1,914,614 | |||||
| Repurchase agreements | 34,481 | 34,735 | |||||
| Other borrowings | 57,603 | 55,726 | |||||
| Total equity | 196,233 | 211,024 | |||||
| For The | For The | |||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||
| Results of Operations | 12/31/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | ||||||||||||||
| Interest income | $ | 28,405 | $ | 23,182 | $ | 101,354 | $ | 93,728 | ||||||||||
| Interest expense | 2,428 | 1,835 | 7,890 | 8,359 | ||||||||||||||
| Provision for loan losses: | ||||||||||||||||||
| Community Banking segment | 100 | - | (600 | ) | (200 | ) | ||||||||||||
| Mortgage Banking segment | - | (135 | ) | 32 | (45 | ) | ||||||||||||
| Consumer Finance segment | 1,670 | 600 | 3,740 | 820 | ||||||||||||||
| Noninterest income: | ||||||||||||||||||
| Gains on sales of loans | 735 | 3,614 | 7,498 | 22,279 | ||||||||||||||
| Other | 9,226 | 6,051 | 20,984 | 26,884 | ||||||||||||||
| Noninterest expenses: | ||||||||||||||||||
| Salaries and employee benefits | 13,167 | 13,339 | 47,867 | 58,581 | ||||||||||||||
| Other | 8,244 | 9,158 | 33,943 | 37,294 | ||||||||||||||
| Income tax expense | 2,451 | 2,009 | 7,595 | 8,959 | ||||||||||||||
| Net income | 10,306 | 6,041 | 29,369 | 29,123 | ||||||||||||||
| Fully-taxable equivalent (FTE) amounts1 | ||||||||||||||||||
| Interest income on loans-FTE | 25,311 | 21,746 | 90,987 | 88,215 | ||||||||||||||
| Interest income on securities-FTE | 3,019 | 1,479 | 9,674 | 5,801 | ||||||||||||||
| Total interest income-FTE | 28,587 | 23,308 | 101,939 | 94,270 | ||||||||||||||
| Net interest income-FTE | 26,159 | 21,473 | 94,049 | 85,911 | ||||||||||||||
________________________
1For 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 | Year Ended | ||||||||||||||||||
| Average Balances | 12/31/2022 | 9/30/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | ||||||||||||||
| Securities | $ | 553,315 | $ | 538,901 | $ | 367,481 | $ | 492,721 | $ | 338,656 | |||||||||
| Loans held for sale | 17,103 | 32,908 | 98,279 | 36,836 | 123,163 | ||||||||||||||
| Loans: | |||||||||||||||||||
| Community Banking segment, excluding PPP loans | 1,142,074 | 1,082,236 | 1,007,382 | 1,073,242 | 976,799 | ||||||||||||||
| PPP loans | 469 | 711 | 24,094 | 3,706 | 60,486 | ||||||||||||||
| Mortgage Banking segment | 6,508 | 11,308 | 10,298 | 9,349 | 10,290 | ||||||||||||||
| Consumer Finance segment | 472,614 | 453,401 | 358,994 | 431,470 | 334,565 | ||||||||||||||
| Interest-bearing deposits in other banks | 40,522 | 105,683 | 215,826 | 153,398 | 173,050 | ||||||||||||||
| Total earning assets | 2,232,605 | 2,225,148 | 2,082,354 | 2,200,722 | 2,017,009 | ||||||||||||||
| Total assets | 2,332,930 | 2,336,456 | 2,229,345 | 2,319,683 | 2,167,419 | ||||||||||||||
| Time, checking and savings deposits | 1,362,717 | 1,376,407 | 1,299,189 | 1,365,127 | 1,279,333 | ||||||||||||||
| Repurchase agreements | 35,963 | 36,913 | 36,065 | 35,544 | 27,359 | ||||||||||||||
| Other borrowings | 55,866 | 55,585 | 55,764 | 55,701 | 55,793 | ||||||||||||||
| Total interest-bearing liabilities | 1,454,546 | 1,468,905 | 1,391,018 | 1,456,372 | 1,362,485 | ||||||||||||||
| Noninterest-bearing demand deposits | 649,951 | 631,519 | 585,534 | 624,581 | 556,801 | ||||||||||||||
| Total equity | 188,070 | 198,363 | 203,283 | 197,876 | 197,204 | ||||||||||||||
| Annualized Average Yields and Rates | |||||||||||||||||||
| Loans: | |||||||||||||||||||
| Community Banking segment | 4.68 | % | 4.20 | % | 4.30 | % | 4.32 | % | 4.49 | % | |||||||||
| Mortgage Banking segment | 6.08 | 4.99 | 3.04 | 4.41 | 2.88 | ||||||||||||||
| Consumer Finance segment | 9.63 | 9.78 | 10.77 | 9.84 | 11.30 | ||||||||||||||
| Time, checking and savings deposits | 0.51 | 0.37 | 0.35 | 0.38 | 0.42 | ||||||||||||||
| Net interest margin | 4.65 | 4.37 | 4.09 | 4.27 | 4.26 | ||||||||||||||
| Asset Quality | 12/31/2022 | 12/31/2021 | ||||||
| Community Banking | ||||||||
| Loans, excluding purchased loans and PPP loans | $ | 1,121,123 | $ | 954,262 | ||||
| Purchased performing loans1 | 37,412 | 56,798 | ||||||
| Purchased credit impaired loans1 | 1,455 | 3,655 | ||||||
| PPP loans2 | 463 | 17,762 | ||||||
| Total loans | $ | 1,160,453 | $ | 1,032,477 | ||||
| Nonaccrual loans | $ | 115 | $ | 2,359 | ||||
| Other real estate owned (OREO) | $ | - | $ | 835 | ||||
| Impaired loans3 | $ | 823 | $ | 5,058 | ||||
| Allowance for loan losses (ALL) | $ | 14,513 | $ | 14,803 | ||||
| Nonaccrual loans to total loans | 0.01 | % | 0.23 | % | ||||
| ALL to total loans | 1.25 | % | 1.43 | % | ||||
| ALL to nonaccrual loans | 12,620.00 | % | 627.51 | % | ||||
| ALL to total loans, excluding purchased credit impaired loans4 | 1.25 | % | 1.44 | % | ||||
| ALL to total loans, excluding purchased loans and PPP loans | 1.29 | % | 1.55 | % | ||||
| Year-to-date net charge-offs to average loans | 0.02 | % | 0.01 | % | ||||
| Mortgage Banking | ||||||||
| Total loans | $ | 707 | $ | 9,389 | ||||
| Nonaccrual loans | $ | 149 | $ | 185 | ||||
| Impaired loans | $ | - | $ | 150 | ||||
| ALL | $ | 36 | $ | 563 | ||||
| Nonaccrual loans to total loans | 21.07 | % | 1.97 | % | ||||
| ALL to total loans | 5.09 | % | 6.00 | % | ||||
| ALL to nonaccrual loans | 24.16 | % | 304.32 | % | ||||
| Year-to-date net charge-offs to average loans | - | % | - | % | ||||
| Consumer Finance | ||||||||
| Total loans | $ | 474,558 | $ | 368,194 | ||||
| Nonaccrual loans | $ | 925 | $ | 380 | ||||
| Repossessed assets | $ | 352 | $ | 190 | ||||
| ALL | $ | 25,969 | $ | 24,791 | ||||
| Nonaccrual loans to total loans | 0.19 | % | 0.10 | % | ||||
| ALL to total loans | 5.47 | % | 6.73 | % | ||||
| ALL to nonaccrual loans | 2,807.46 | % | 6,523.95 | % | ||||
| Year-to-date net charge-offs (recoveries) to average loans | 0.59 | % | (0.14 | )% | ||||
________________________
1 Acquired loans are tracked in two separate categories: “purchased performing” and “purchased credit impaired.” The remaining discount for purchased performing loans was
2 The principal amount of outstanding PPP loans was
3 Impaired loans includes no loans on nonaccrual at 12/31/22 and
4 The ratio of ALL to total loans, excluding purchased credit impaired loans, includes purchased performing loans and loans originated under the PPP for which no allowance for loan losses is required.
| For The | For The | ||||||||||||||||||
| Quarter Ended | Year Ended | ||||||||||||||||||
| Other Performance Data | 12/31/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | |||||||||||||||
| Net Income (Loss): | |||||||||||||||||||
| Community Banking | $ | 10,620 | $ | 3,201 | $ | 24,374 | $ | 14,085 | |||||||||||
| Mortgage Banking | (462 | ) | 1,062 | 1,210 | 7,683 | ||||||||||||||
| Consumer Finance | 795 | 2,364 | 6,831 | 9,960 | |||||||||||||||
| Other1 | (647 | ) | (586 | ) | (3,046 | ) | (2,605 | ) | |||||||||||
| Total | $ | 10,306 | $ | 6,041 | $ | 29,369 | $ | 29,123 | |||||||||||
| Net income attributable to C&F Financial Corporation | $ | 10,308 | $ | 5,924 | $ | 29,159 | $ | 28,667 | |||||||||||
| Earnings per share - basic and diluted | $ | 2.97 | $ | 1.67 | $ | 8.29 | $ | 7.95 | |||||||||||
| Weighted average shares outstanding - basic and diluted | 3,475,716 | 3,539,006 | 3,517,114 | 3,604,119 | |||||||||||||||
| Annualized return on average assets | 1.77 | % | 1.08 | % | 1.27 | % | 1.34 | % | |||||||||||
| Annualized return on average equity | 21.92 | % | 11.89 | % | 14.84 | % | 14.77 | % | |||||||||||
| Annualized return on average tangible common equity2 | 25.84 | % | 13.67 | % | 17.31 | % | 17.15 | % | |||||||||||
| Dividends declared per share | $ | 0.42 | $ | 0.40 | $ | 1.64 | $ | 1.58 | |||||||||||
| Mortgage loan originations - Mortgage Banking | $ | 112,065 | $ | 296,909 | $ | 697,323 | $ | 1,458,971 | |||||||||||
| Mortgage loans sold - Mortgage Banking | 130,910 | 329,922 | 763,041 | 1,585,829 | |||||||||||||||
________________________
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 | 12/31/2022 | 12/31/2021 | |||||
| Market value per share | $ | 58.27 | $ | 51.19 | |||
| Book value per share | $ | 56.27 | $ | 59.32 | |||
| Price to book value ratio | 1.04 | 0.86 | |||||
| Tangible book value per share1 | $ | 48.54 | $ | 51.66 | |||
| Price to tangible book value ratio1 | 1.20 | 0.99 | |||||
| Price to earnings ratio (ttm) | 7.00 | 6.44 | |||||
________________________
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 | 12/31/2022 | 12/31/2021 | Requirements3 | |||||||
| C&F Financial Corporation1 | ||||||||||
| Total risk-based capital ratio | 15.4 | % | 15.8 | % | 8.0 | % | ||||
| Tier 1 risk-based capital ratio | 12.8 | % | 13.0 | % | 6.0 | % | ||||
| Common equity tier 1 capital ratio | 11.4 | % | 11.5 | % | 4.5 | % | ||||
| Tier 1 leverage ratio | 9.9 | % | 9.7 | % | 4.0 | % | ||||
| C&F Bank2 | ||||||||||
| Total risk-based capital ratio | 14.2 | % | 14.5 | % | 8.0 | % | ||||
| Tier 1 risk-based capital ratio | 12.9 | % | 13.3 | % | 6.0 | % | ||||
| Common equity tier 1 capital ratio | 12.9 | % | 13.3 | % | 4.5 | % | ||||
| Tier 1 leverage ratio | 9.9 | % | 9.8 | % | 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, 2022 are estimates and subject to change pending regulatory filings. All ratios at December 31, 2021 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 | |||||||||||||||||
| 12/31/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | |||||||||||||||
| Reconciliation of Certain Non-GAAP Financial Measures | ||||||||||||||||||
| Adjusted Net Income and Adjusted Earnings Per Share | ||||||||||||||||||
| Net income, as reported | $ | 10,306 | $ | 6,041 | $ | 29,369 | $ | 29,123 | ||||||||||
| Pension settlement charge1 | - | 995 | - | 995 | ||||||||||||||
| Branch consolidation - disposal of real estate2 | (165 | ) | - | (228 | ) | (107 | ) | |||||||||||
| Change in accounting policy election3 | (2,151 | ) | - | (2,151 | ) | - | ||||||||||||
| Adjusted net income | $ | 7,990 | $ | 7,036 | $ | 26,990 | $ | 30,011 | ||||||||||
| Weighted average shares - basic and diluted | 3,475,716 | 3,539,006 | 3,517,114 | 3,604,119 | ||||||||||||||
| Earnings per share - basic and diluted, as reported | $ | 2.97 | $ | 1.67 | $ | 8.29 | $ | 7.95 | ||||||||||
| Pension settlement charge | - | 0.28 | - | 0.28 | ||||||||||||||
| Branch consolidation - disposal of real estate | (0.05 | ) | - | (0.07 | ) | (0.03 | ) | |||||||||||
| Change in accounting policy election | (0.62 | ) | - | (0.61 | ) | - | ||||||||||||
| Adjusted earnings per share - basic and diluted | $ | 2.30 | $ | 1.95 | $ | 7.61 | $ | 8.20 | ||||||||||
| Adjusted Return on Average Equity (ROE) | ||||||||||||||||||
| Average total equity, as reported | $ | 188,070 | $ | 203,283 | $ | 197,876 | $ | 197,204 | ||||||||||
| Annualized ROE, as reported | 21.92 | % | 11.89 | % | 14.84 | % | 14.77 | % | ||||||||||
| Adjusted annualized ROE | 16.99 | % | 13.84 | % | 13.64 | % | 15.22 | % | ||||||||||
| Adjusted Return on Average Assets (ROA) | ||||||||||||||||||
| Average total assets, as reported | $ | 2,332,930 | $ | 2,229,345 | $ | 2,319,683 | $ | 2,167,419 | ||||||||||
| Annualized ROA, as reported | 1.77 | % | 1.08 | % | 1.27 | % | 1.34 | % | ||||||||||
| Adjusted annualized ROA | 1.37 | % | 1.26 | % | 1.16 | % | 1.38 | % | ||||||||||
| Return on Average Tangible Common Equity & Adjusted Return on Average Tangible Common Equity | ||||||||||||||||||
| Average total equity, as reported | $ | 188,070 | $ | 203,283 | $ | 197,876 | $ | 197,204 | ||||||||||
| Average goodwill | (25,191 | ) | (25,191 | ) | (25,191 | ) | (25,191 | ) | ||||||||||
| Average other intangible assets | (1,710 | ) | (2,013 | ) | (1,820 | ) | (2,127 | ) | ||||||||||
| Average noncontrolling interest | (434 | ) | (420 | ) | (737 | ) | (907 | ) | ||||||||||
| Average tangible common equity | $ | 160,735 | $ | 175,659 | $ | 170,128 | $ | 168,979 | ||||||||||
| Net income | $ | 10,306 | $ | 6,041 | $ | 29,369 | $ | 29,123 | ||||||||||
| Amortization of intangibles | 74 | 78 | 298 | 314 | ||||||||||||||
| Net loss (income) attributable to noncontrolling interest | 2 | (117 | ) | (210 | ) | (456 | ) | |||||||||||
| Net tangible income attributable to C&F Financial Corporation | $ | 10,382 | $ | 6,002 | $ | 29,457 | $ | 28,981 | ||||||||||
| Adjusted net income | $ | 7,990 | $ | 7,036 | $ | 26,990 | $ | 30,011 | ||||||||||
| Amortization of intangibles | 74 | 78 | 298 | 314 | ||||||||||||||
| Net loss (income) attributable to noncontrolling interest | 2 | (117 | ) | (210 | ) | (456 | ) | |||||||||||
| Adjusted net tangible income attributable to C&F Financial Corporation | $ | 8,066 | $ | 6,997 | $ | 27,078 | $ | 29,869 | ||||||||||
| Annualized return on average tangible common equity | 25.84 | % | 13.67 | % | 17.31 | % | 17.15 | % | ||||||||||
| Adjusted annualized return on average tangible common equity | 20.07 | % | 15.93 | % | 15.92 | % | 17.68 | % | ||||||||||
| Adjusted Net Income, Community Banking Segment | ||||||||||||||||||
| Net income, community banking segment, as reported | $ | 10,620 | $ | 3,201 | $ | 24,374 | $ | 14,085 | ||||||||||
| Pension settlement charge1 | - | 995 | - | 995 | ||||||||||||||
| Branch consolidation - disposal of real estate2 | (165 | ) | - | (228 | ) | (107 | ) | |||||||||||
| Change in accounting policy election3 | (2,151 | ) | - | (2,151 | ) | - | ||||||||||||
| Adjusted net income, community banking segment | $ | 8,304 | $ | 4,196 | $ | 21,995 | $ | 14,973 | ||||||||||
| Fully Taxable Equivalent Net Interest Income4 | ||||||||||||||||||
| Interest income on loans | $ | 25,267 | $ | 21,719 | $ | 90,833 | $ | 88,118 | ||||||||||
| FTE adjustment | 44 | 27 | 154 | 97 | ||||||||||||||
| FTE interest income on loans | $ | 25,311 | $ | 21,746 | $ | 90,987 | $ | 88,215 | ||||||||||
| Interest income on securities | $ | 2,881 | $ | 1,380 | $ | 9,243 | $ | 5,356 | ||||||||||
| FTE adjustment | 138 | 99 | 431 | 445 | ||||||||||||||
| FTE interest income on securities | $ | 3,019 | $ | 1,479 | $ | 9,674 | $ | 5,801 | ||||||||||
| Total interest income | $ | 28,405 | $ | 23,182 | $ | 101,354 | $ | 93,728 | ||||||||||
| FTE adjustment | 182 | 126 | 585 | 542 | ||||||||||||||
| FTE interest income | $ | 28,587 | $ | 23,308 | $ | 101,939 | $ | 94,270 | ||||||||||
| Net interest income | $ | 25,977 | $ | 21,347 | $ | 93,464 | $ | 85,369 | ||||||||||
| FTE adjustment | 182 | 126 | 585 | 542 | ||||||||||||||
| FTE net interest income | $ | 26,159 | $ | 21,473 | $ | 94,049 | $ | 85,911 | ||||||||||
________________________
1 Pension settlement expense is net of related income tax benefits of
2 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
3 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
4 Assuming a tax rate of
| December 31, | December 31, | ||||||||
| 2022 | 2021 | ||||||||
| Tangible Book Value Per Share | |||||||||
| Equity attributable to C&F Financial Corporation | $ | 195,634 | $ | 210,318 | |||||
| Goodwill | (25,191 | ) | (25,191 | ) | |||||
| Other intangible assets | (1,679 | ) | (1,977 | ) | |||||
| Tangible equity attributable to C&F Financial Corporation | $ | 168,764 | $ | 183,150 | |||||
| Shares outstanding | 3,476,614 | 3,545,554 | |||||||
| Book value per share | $ | 56.27 | $ | 59.32 | |||||
| Tangible book value per share | $ | 48.54 | $ | 51.66 | |||||
| Contact: | Jason Long, CFO and Secretary |
| (804) 843-2360 |
FAQ
What is CFFI's net income for the year ended December 31, 2022?
How did CFFI's adjusted net income change in 2022?
What significant change occurred in CFFI's mortgage banking segment for Q4 2022?
What were the fourth quarter earnings for CFFI?
