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C&F Financial Corporation Announces Net Income for First Quarter

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C&F Financial (CFFI) announced a decrease in net income for the first quarter of 2024 compared to the same period in 2023. The company reported consolidated net income of $3.4 million, down from $6.5 million in the first quarter of 2023. Earnings per share also decreased from $1.86 to $1.01. The annualized return on average equity, tangible common equity, and assets also saw a decline.
C&F Financial (CFFI) ha annunciato una diminuzione del reddito netto per il primo trimestre del 2024 rispetto allo stesso periodo del 2023. La società ha riportato un reddito netto consolidato di 3,4 milioni di dollari, in calo dai 6,5 milioni di dollari del primo trimestre del 2023. Anche l'utile per azione è diminuito, passando da 1,86 a 1,01 dollari. Anche il rendimento annualizzato sul patrimonio medio, sul patrimonio tangibile comune e sugli asset ha registrato un calo.
C&F Financial (CFFI) anunció una disminución en el ingreso neto para el primer trimestre de 2024 en comparación con el mismo periodo de 2023. La compañía reportó un ingreso neto consolidado de $3.4 millones, una baja desde los $6.5 millones en el primer trimestre de 2023. Las ganancias por acción también disminuyeron de $1.86 a $1.01. El retorno anualizado sobre el patrimonio medio, el patrimonio común tangible y los activos también mostraron una disminución.
C&F 파이낸셜(CFFI)은 2024년 첫 분기에 2023년 동기 대비 순이익 감소를 발표했습니다. 이 회사는 340만 달러의 연결 순이익을 보고했으며, 이는 2023년 첫 분기의 650만 달러에서 감소한 수치입니다. 주당 수익 또한 1.86달러에서 1.01달러로 하락했습니다. 평균 주주자본, 유형 자본, 자산에 대한 연간 수익률도 감소했습니다.
C&F Financial (CFFI) a annoncé une baisse du revenu net pour le premier trimestre de 2024 par rapport à la même période en 2023. L'entreprise a rapporté un revenu net consolidé de 3,4 millions de dollars, en baisse par rapport aux 6,5 millions de dollars du premier trimestre de 2023. Le bénéfice par action a également diminué, passant de 1,86 $ à 1,01 $. Le rendement annualisé sur les fonds propres moyens, sur les fonds propres tangibles communs et sur les actifs a également connu une baisse.
C&F Financial (CFFI) kündigte einen Rückgang des Nettoeinkommens für das erste Quartal 2024 im Vergleich zum gleichen Zeitraum 2023 an. Das Unternehmen verzeichnete einen konsolidierten Nettoertrag von 3,4 Millionen Dollar, ein Rückgang von den 6,5 Millionen Dollar im ersten Quartal 2023. Auch der Gewinn pro Aktie sank von 1,86 auf 1,01 Dollar. Die jährliche Rendite auf durchschnittliches Eigenkapital, fassbares Gemeineigenkapital und Vermögenswerte nahm ebenfalls ab.
Positive
  • C&F Financial reported a decrease in net income for Q1 2024 compared to Q1 2023.
  • Consolidated net income dropped to $3.4 million from $6.5 million in the first quarter of 2023.
  • Earnings per share decreased from $1.86 to $1.01.
  • Annualized return on average equity declined from 12.87% to 6.33%.
  • Annualized return on average tangible common equity decreased from 14.93% to 7.30%.
  • Annualized return on average assets declined from 1.10% to 0.57%.
Negative
  • None.

Insights

Upon reviewing the recent financial performance of C&F Financial Corporation, it is evident that there has been a significant decrease in both net income and earnings per share (EPS) in the first quarter of 2024 compared to the same period last year. A decline from $6.5 million to $3.4 million in net income reflects a stark 47.3% reduction. Concurrently, EPS has almost halved from $1.86 to $1.01.

The reported annualized return on average equity (ROAE) and return on average tangible common equity (ROATCE) also indicate a contraction, from 12.87% and 14.93% in the previous year to 6.33% and 7.30% respectively. Similarly, the annualized return on average assets (ROAA) has diminished from 1.10% to 0.57%. These metrics are essential as they provide insight into how effectively the company is utilizing its equity and assets to generate profits.

Investors should consider the potential reasons behind such a downturn, which may include increased competition, rises in operating costs, or possibly decreased revenue streams. Additionally, these results might suggest a need to reevaluate the company's operational efficiency and cost-management strategies. While such a trend could be a cause for concern, it is important to analyze multiple quarters to discern whether this is part of a larger pattern or an anomaly specific to this quarter.

Analyzing the financial results in the context of the market, one must consider the broader economic environment during this period. If the industry or the overall economy is facing headwinds, such as increased interest rates or inflationary pressures, this could explain the performance dip. In a challenging economic climate, banks and financial institutions often face thinner margins and higher credit costs.

Furthermore, it's important to cross-reference these financial indicators with peer performance. If competitors are not experiencing similar declines, this might suggest that the issues are specific to C&F Financial Corporation's strategy or operations, rather than industry-wide phenomena. On the flip side, if the entire sector is trending downwards, it could be indicative of systemic issues affecting all market players.

Investors should note that singular quarterly results do not always signify a long-term trend. However, the results can impact investor sentiment and the company's stock price in the short term. It's also important to consider any forward-looking statements or strategic plans the company might have disclosed that could address the downturn and potentially restore investor confidence.

TOANO, Va., April 19, 2024 (GLOBE NEWSWIRE) -- C&F Financial Corporation (the Corporation) (NASDAQ: CFFI), the holding company for C&F Bank, today reported consolidated net income of $3.4 million for the first quarter of 2024, compared to $6.5 million for the first quarter of 2023. The following table presents selected financial performance highlights for the periods indicated:

  For The Quarter Ended 
Consolidated Financial Highlights (unaudited) 3/31/2024  3/31/2023 
Consolidated net income (000's) $3,435  $6,497 
         
Earnings per share - basic and diluted $1.01  $1.86 
         
Annualized return on average equity  6.33%  12.87%
Annualized return on average tangible common equity1  7.30%  14.93%
Annualized return on average assets  0.57%  1.10%

________________________
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.

“Our net income continues to be affected by increases in deposit costs resulting from both a change in mix of deposits and the overall higher interest rate environment,” commented Tom Cherry, President and Chief Executive Officer of C&F Financial Corporation. “While we believe there are signs that our cost of deposits is peaking, there continues to be pressure on our net interest margin. Regardless, we are pleased with several of our other balance sheet measures. Both loan and deposit growth were very good in the first quarter, and asset quality and capital remain strong as well. Despite the continued earnings headwinds we expect to face during 2024, we remain optimistic for our strategic opportunities for the remainder of 2024 and beyond.”

Key highlights for the first quarter of 2024 are as follows.

  • Community banking segment loans grew $67.7 million, or 21.3 percent annualized, and $143.3 million, or 12.0 percent, compared to December 31, 2023 and March 31, 2023, respectively;
  • Consumer finance segment loans grew $7.6 million, or 6.5 percent annualized, and $945,000, or less than 1 percent, compared to December 31, 2023 and March 31, 2023, respectively;
  • Deposits increased $21.8 million, or 4.2 percent annualized, and $92.1 million, or 4.6 percent, compared to December 31, 2023 and March 31, 2023, respectively;
  • Consolidated annualized net interest margin was 4.09 percent for the first quarter of 2024 compared to 4.52 percent for the first quarter of 2023 and 4.17 percent in the fourth quarter of 2023;
  • The consumer finance segment recorded provision for credit losses of $3.0 million for the first quarter of 2024 compared to $1.6 million for the first quarter of 2023 and $2.4 million for the fourth quarter of 2023;
  • The consumer finance segment experienced net charge-offs at an annualized rate of 2.54 percent of average total loans for the first quarter of 2024 compared to 1.77 percent for the first quarter of 2023 and 2.72 percent for the fourth quarter of 2023;
  • Mortgage banking segment loan originations were $94.3 million for the first quarter of 2024, a decrease of $21.5 million, or 18.5 percent, and $3.9 million, or 4.0 percent, compared to the first quarter of 2023 and the fourth quarter of 2023, respectively.

Community Banking Segment. The community banking segment reported net income of $4.0 million for the first quarter of 2024 compared to $6.4 million for the same period in 2023 due primarily to:

  • higher interest expense due primarily to higher rates on deposits and higher balances of interest-bearing deposits; and
  • higher salaries and employee benefits expense, which have generally increased in line with employment market conditions;

partially offset by:

  • higher interest income resulting from the effects of rising interest rates on asset yields and higher average balances of loans, offset in part by lower average balances of securities.

Average loans increased $130.1 million, or 11.1 percent, for the first quarter of 2024 compared to the same period in 2023 due primarily to growth in the commercial real estate, construction, and residential mortgage segments of the loan portfolio. Average deposits increased $72.3 million, or 3.6 percent, for the first quarter of 2024 compared to the same period in 2023. Average deposits increased $31.8 million, or 6.3 percent annualized, for the first quarter of 2024 compared to the fourth quarter of 2023.

Average loan yields and average costs of interest-bearing deposits were higher for the first quarter of 2024 compared to the same period of 2023, due primarily to the effects of rising interest rates as market interest rates rose in 2023, and management expects both to continue to rise in 2024.

The community banking segment’s nonaccrual loans were $550,000 at March 31, 2024 compared to $406,000 at December 31, 2023. The community banking segment recorded provision for credit losses of $500,000 and $450,000 for the first quarters of 2024 and 2023, respectively. At March 31, 2024, the allowance for credit losses increased to $16.6 million, compared to $16.1 million at December 31, 2023. The increases in provision and allowance for credit losses are due primarily to growth in the loan portfolio. 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 $294,000 for the first quarter of 2024 compared to $227,000 for same period in 2023 due primarily to:

  • higher reversal of provision for indemnifications;
  • 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; 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 sustained elevated level of mortgage interest rates, 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 2024 and 2023. Mortgage loan originations for the mortgage banking segment were $94.3 million for the first quarter of 2024, comprised of $7.5 million refinancings and $86.8 million home purchases, compared to $115.8 million, comprised of $14.0 million refinancings and $101.8 million home purchases, for same period in 2023. Mortgage loan originations in the first quarter of 2024 decreased $3.9 million compared to the fourth quarter of 2023 due to normal industry seasonal fluctuations, low level of inventory, and the current mortgage interest rate environment.

During the first quarter of 2024, the mortgage banking segment recorded a reversal of provision for indemnification losses of $140,000 compared to no provision for indemnification losses in the same period of 2023. The mortgage banking segment increased reserves for indemnification losses during 2020 based on widespread forbearance on mortgage loans and economic uncertainty related to the COVID-19 pandemic. The release of indemnification reserves in 2024 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, such as time since origination. 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 a net loss of $63,000 for the first quarter of 2024 compared to net income of $509,000 for the same period in 2023 due primarily to:

  • higher provision for credit losses due primarily to increased net charge-offs; and
  • higher interest expense on variable rate borrowings from the community banking segment as a result of increased market interest rates;

partially offset by:

  • higher interest income resulting from the effects of rising interest rates on loan yields.

Average loans decreased $1.4 million, or less than 1 percent, for the first quarter of 2024 compared to the same period in 2023. The consumer finance segment experienced net charge-offs at an annualized rate of 2.54 percent of average total loans for the first quarter of 2024 compared to 1.77 percent for the first quarter of 2023 due primarily to an increase in the number of delinquent loans and repossessions, which coupled with a decline in wholesale values of used automobiles, results in an increased charge-off amount on a per-unit basis. At March 31, 2024, total delinquent loans as a percentage of total loans was 2.78 percent compared to 4.09 percent at December 31, 2023 and 2.33 percent at March 31, 2023. Delinquency and loss rates have returned to pre-pandemic levels due to the passage of time since the expiration of stimulus and enhanced unemployment benefits that benefitted borrowers. The consumer finance segment, at times, offers payment deferrals as a portfolio management technique to achieve higher ultimate cash collections on select loan accounts. A significant reliance on deferrals as a means of managing collections may result in a lengthening of the loss confirmation period, which would increase expectations of credit losses inherent in the portfolio. The average amounts deferred on a monthly basis during the first quarter of 2024 were 1.62 percent of average automobile loans outstanding compared to 2.02 percent during the fourth quarter of 2023 and 1.60 percent during the first quarter of 2023. The allowance for credit losses was $23.6 million at March 31, 2024 and December 31, 2023. The allowance for credit losses as a percentage of total loans decreased to 4.95 percent at March 31, 2024 from 5.03 percent and 5.45 percent at December 31, 2023 and March 31, 2023, respectively, primarily as a result of growth in loans with stronger credit quality while balances of loans with lower credit quality declined. 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 continued 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 an estimate of amounts above the FDIC insurance coverage limit of $250,000. As of March 31, 2024, the Corporation’s uninsured deposits were approximately $560.3 million, or 26.8 percent of total deposits. Excluding intercompany cash holdings and municipal deposits, which are secured with pledged securities, amounts uninsured were approximately $408.3 million, or 19.6 percent of total deposits as of March 31, 2024. The Corporation’s liquid assets, which include cash and due from banks, interest-bearing deposits at other banks and nonpledged securities available for sale, were $298.5 million and borrowing availability was $573.8 million as of March 31, 2024, which in total exceed uninsured deposits, excluding intercompany cash holdings and secured municipal deposits, by $464.0 million as of March 31, 2024.

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. Total borrowings increased to $121.6 million at March 31, 2024 from $109.5 million at December 31, 2023 due primarily to higher borrowings from the FHLB. Borrowings decreased $79.4 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 for the first quarter of 2024 of $0.44 per share, which was paid on April 1, 2024. This dividend represents a payout ratio of 43.6 percent of earnings per share for the first quarter of 2024. 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 decreased $567,000 at March 31, 2024 compared to December 31, 2023 due primarily to higher unrealized losses in the market value of securities available for sale, which are recognized as a component of other comprehensive income, share repurchases and dividends paid on the Corporation’s common stock, the significant majority of which was offset by net income. 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 C&F Bank. The accumulated other comprehensive loss related to the Corporation’s securities available for sale increased to $27.1 million at March 31, 2024 compared to $25.0 million at December 31, 2023 due primarily to an increase in debt security market interest rates.

As of March 31, 2024, 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 March 31, 2024, 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 March 31, 2024. 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 December 2023, the Board of Directors authorized a program, effective January 1, 2024, to repurchase up to $10.0 million of the Corporation’s common stock through December 31, 2024. During the first quarter of 2024, the Corporation repurchased 9,654 shares, or $516,000, 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 $35.69 per share on April 18, 2024. At March 31, 2024, the book value per share of the Corporation was $64.24 and the tangible book value per share was $56.36. 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, 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 trends in yields on loans, expected future recovery of investments in debt securities, future dividend payments, deposit trends, charge-offs and delinquencies, changes in cost of funds and net interest margin and items affecting net interest margin, 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, market interest rates and housing inventory and resulting effects in mortgage loan origination volume, sources of liquidity, 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
  • general market conditions, including disruptions due to 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
  • average loan yields and average costs of interest-bearing deposits
  • financial services industry conditions, including bank failures or concerns involving liquidity
  • labor market conditions, including 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 availability of lines of credit from the FHLB and other 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 and marine and recreational vehicle finance markets
  • services provided by, or the level of the Corporation’s reliance upon third parties for key services
  • the commercial and residential real estate markets, including changes in property values
  • 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 plans
  • cyber threats, attacks or events
  • C&F Bank’s product offerings
  • 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, 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.

C&F Financial Corporation

Selected Financial Information
(dollars in thousands, except for per share data)
(unaudited)
          
Financial Condition3/31/2024  12/31/2023  3/31/2023 
Interest-bearing deposits in other banks$39,303 $58,777 $68,624 
Investment securities - available for sale, at fair value 430,421  462,444  513,625 
Loans held for sale, at fair value 22,622  14,176  26,330 
Loans, net:         
Community Banking segment 1,324,690  1,257,557  1,183,078 
Consumer Finance segment 452,537  444,931  449,283 
Total assets 2,469,751  2,438,498  2,440,333 
Deposits 2,087,932  2,066,130  1,995,798 
Repurchase agreements 27,803  30,705  35,579 
Other borrowings 93,772  78,834  165,444 
Total equity 216,949  217,516  203,184 


 For The 
 Quarter Ended  
Results of Operations3/31/2024  3/31/2023 
Interest income$32,708  $29,305 
Interest expense 9,550   4,347 
Provision for credit losses:       
Community Banking segment 500   450 
Consumer Finance segment 3,000   1,600 
Noninterest income:       
Gains on sales of loans 1,288   1,794 
Other 6,204   5,843 
Noninterest expenses:       
Salaries and employee benefits 14,252   13,898 
Other 8,898   8,697 
Income tax expense 565   1,453 
Net income 3,435   6,497 
        
Fully-taxable equivalent (FTE) amounts1       
Interest income on loans-FTE 29,636   26,107 
Interest income on securities-FTE 3,098   3,232 
Total interest income-FTE 32,993   29,515 
Net interest income-FTE 23,443   25,168 

________________________
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 Quarter Ended 
    3/31/2024    3/31/2023    
  Average    Income/    Yield/ Average    Income/    Yield/ 
Yield Analysis Balance   Expense   Rate Balance   Expense   Rate 
Assets                 
Securities:                 
Taxable $365,244  $1,980 2.17%$462,200  $2,451 2.12%
Tax-exempt  120,920   1,118 3.70  98,854   781 3.16 
Total securities  486,164   3,098 2.55  561,054   3,232 2.30 
Loans:                 
Community banking segment  1,302,260   17,331 5.35  1,172,164   14,302 4.95 
Mortgage banking segment  17,700   281 6.39  19,076   296 6.29 
Consumer finance segment  473,848   12,024 10.21  475,225   11,509 9.82 
Total loans  1,793,808   29,636 6.64  1,666,465   26,107 6.35 
Interest-bearing deposits in other banks  28,417   259 3.67  25,911   176 2.75 
Total earning assets  2,308,389   32,993 5.75  2,253,430   29,515 5.30 
Allowance for credit losses  (40,292)       (41,044)      
Total non-earning assets  156,800        154,990       
Total assets $2,424,897       $2,367,376       
                  
Liabilities and Equity                 
Interest-bearing deposits:                 
Interest-bearing demand deposits $335,570   553 0.66 $384,493   583 0.61 
Money market deposit accounts  298,886   1,030 1.39  348,524   592 0.69 
Savings accounts  185,759   31 0.07  225,411   34 0.06 
Certificates of deposit  705,167   6,916 3.94  434,801   1,820 1.70 
Total interest-bearing deposits  1,525,382   8,530 2.25  1,393,229   3,029 0.88 
Borrowings:                 
Repurchase agreements  27,997   111 1.59  35,260   81 0.92 
Other borrowings  78,445   909 4.64  105,421   1,237 4.69 
Total borrowings  106,442   1,020 3.83  140,681   1,318 3.75 
Total interest-bearing liabilities  1,631,824   9,550 2.35  1,533,910   4,347 1.14 
Noninterest-bearing demand deposits  531,885        591,709       
Other liabilities  44,125        39,901       
Total liabilities  2,207,834        2,165,520       
Equity  217,063        201,856       
Total liabilities and equity $2,424,897       $2,367,376       
Net interest income    $23,443      $25,168   
Interest rate spread       3.40%      4.16%
Interest expense to average earning assets       1.66%      0.78%
Net interest margin       4.09%      4.52%
                  


  3/31/2024
Funding Sources  Capacity    Outstanding    Available
Unsecured federal funds agreements $75,000 $2 $74,998
Borrowings from FHLB  222,876  40,000  182,876
Borrowings from Federal Reserve Bank  315,947    315,947
Total $613,823 $40,002 $573,821
          


Asset Quality 3/31/2024  12/31/2023 
Community Banking        
Total loans $1,341,324  $1,273,629 
Nonaccrual loans $550  $406 
         
Allowance for credit losses (ACL) $16,634  $16,072 
Nonaccrual loans to total loans  0.04%  0.03%
ACL to total loans  1.24%  1.26%
ACL to nonaccrual loans  3,024.36%  3,958.62%
Annualized year-to-date net charge-offs to average loans  0.01%  0.01%
         
Consumer Finance        
Total loans $476,103  $468,510 
Nonaccrual loans $741  $892 
Repossessed assets $544  $646 
ACL $23,566  $23,579 
Nonaccrual loans to total loans  0.16%  0.19%
ACL to total loans  4.95%  5.03%
ACL to nonaccrual loans  3,180.30%  2,643.39%
Annualized year-to-date net charge-offs to average loans  2.54%  1.99%


  For The
  Quarter Ended
Other Performance Data 3/31/2024 3/31/2023
Net Income (Loss):      
Community Banking $4,012  $6,418 
Mortgage Banking  294   227 
Consumer Finance  (63)  509 
Other1  (808)  (657)
Total $3,435  $6,497 
       
Net income attributable to C&F Financial Corporation $3,401  $6,441 
       
Earnings per share - basic and diluted $1.01  $1.86 
Weighted average shares outstanding - basic and diluted  3,370,934   3,464,895 
       
Annualized return on average assets  0.57%  1.10%
Annualized return on average equity  6.33%  12.87%
Annualized return on average tangible common equity2  7.30%  14.93%
Dividends declared per share $0.44  $0.44 
       
Mortgage loan originations - Mortgage Banking $94,346  $115,815 
Mortgage loans sold - Mortgage Banking  86,079   104,027 

________________________

  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 3/31/2024  12/31/2023
Market value per share $49.00  $68.19 
Book value per share $64.24  $64.28 
Price to book value ratio  0.76   1.06 
Tangible book value per share1 $56.36  $56.40 
Price to tangible book value ratio1  0.87   1.21 
Price to earnings ratio (ttm)  8.09   9.87 

________________________
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.”

Capital Ratios3/31/2024 12/31/2023 Minimum Capital
Requirements
3
C&F Financial Corporation1         
Total risk-based capital ratio 14.5% 14.8% 8.0%
Tier 1 risk-based capital ratio 12.2% 12.6% 6.0%
Common equity tier 1 capital ratio 11.0% 11.3% 4.5%
Tier 1 leverage ratio 10.1% 10.1% 4.0%
          
C&F Bank2         
Total risk-based capital ratio 13.8% 14.1% 8.0%
Tier 1 risk-based capital ratio 12.6% 12.9% 6.0%
Common equity tier 1 capital ratio 12.6% 12.9% 4.5%
Tier 1 leverage ratio 10.3% 10.3% 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 March 31, 2024 are estimates and subject to change pending regulatory filings. All ratios at December 31, 2023 are presented as filed.
3 The ratios presented for minimum capital requirements are those to be considered adequately capitalized.

  For The Quarter Ended
  3/31/2024 3/31/2023
Reconciliation of Certain Non-GAAP Financial Measures    
Return on Average Tangible Common Equity      
Average total equity, as reported $217,063  $201,856 
Average goodwill  (25,191)  (25,191)
Average other intangible assets  (1,366)  (1,640)
Average noncontrolling interest  (649)  (654)
Average tangible common equity $189,857  $174,371 
       
Net income $3,435  $6,497 
Amortization of intangibles  65   68 
Net income attributable to noncontrolling interest  (34)  (56)
Net tangible income attributable to C&F Financial Corporation $3,466  $6,509 
       
Annualized return on average equity, as reported  6.33%  12.87%
Annualized return on average tangible common equity  7.30%  14.93%
       


  For The Quarter Ended  
  3/31/2024  3/31/2023 
Fully Taxable Equivalent Net Interest Income1        
Interest income on loans $29,586  $26,060 
FTE adjustment  50   47 
FTE interest income on loans $29,636  $26,107 
         
Interest income on securities $2,863  $3,069 
FTE adjustment  235   163 
FTE interest income on securities $3,098  $3,232 
         
Total interest income $32,708  $29,305 
FTE adjustment  285   210 
FTE interest income $32,993  $29,515 
         
Net interest income $23,158  $24,958 
FTE adjustment  285   210 
FTE net interest income $23,443  $25,168 

____________________
1 Assuming a tax rate of 21%.

  3/31/2024 12/31/2023
Tangible Book Value Per Share    
Equity attributable to C&F Financial Corporation $216,340  $216,878 
Goodwill  (25,191)  (25,191)
Other intangible assets  (1,342)  (1,407)
Tangible equity attributable to C&F Financial Corporation $189,807  $190,280 
       
Shares outstanding  3,367,619   3,374,098 
       
Book value per share $64.24  $64.28 
Tangible book value per share $56.36  $56.40 
         


Contact:    Jason Long, CFO and Secretary
(804) 843-2360
   

FAQ

What was C&F Financial 's net income for the first quarter of 2024?

C&F Financial reported consolidated net income of $3.4 million for the first quarter of 2024.

How does the first quarter of 2024 net income compare to the first quarter of 2023 for CFFI?

The net income for the first quarter of 2024 was lower compared to the same period in 2023.

What was the earnings per share for C&F Financial in the first quarter of 2024?

Earnings per share for the first quarter of 2024 were $1.01.

What was the annualized return on average equity for CFFI in the first quarter of 2024?

The annualized return on average equity for CFFI was 6.33% in the first quarter of 2024.

How did the annualized return on average assets change from the first quarter of 2023 to the first quarter of 2024 for C&F Financial ?

The annualized return on average assets declined from 1.10% in Q1 2023 to 0.57% in Q1 2024.

C&F Financial Corp

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