8-K
C & F FINANCIAL CORP (CFFI)
8-K
2022-08-01
For: 2022-08-01
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April 08, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 1, 2022
C&F FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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|---|---|---|---|---|
| Virginia | | 000-23423 | | 54-1680165 |
| (State or other jurisdiction of<br>incorporation) | | (Commission<br>File Number) | | (IRS Employer<br>Identification No.) |
| | | |
|---|---|---|
| 3600 La Grange Parkway , Toano , Virginia | | 23168 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code (804) 843-2360
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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|---|---|---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, $1.00 par value per share | CFFI | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange of 1934 (§240.12b-2 of this chapter).
| Emer | |
|---|---|
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Item 7.01
Regulation FD Disclosure
On August 1, 2022, C&F Financial Corporation (the Corporation) published an investor presentation on its website. A copy of the presentation is attached to this Current Report on Form 8-K as Exhibit 99.1 and incorporated by reference into this Item 7.01. The Corporation and its management may use this or similar presentations in meetings with investors during the third quarter of 2022. A copy of this investor presentation is also available in the Financial Information – Investor Presentations section of the Corporation’s investor relations website at investor.cffc.com.
In accordance with General Instruction B.2 of Form 8-K, the information furnished in this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the Exchange Act) or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act unless expressly incorporated by specific reference made within such filing.
Item 9.01
Financial Statements and Exhibits
(d)Exhibits
| 99.1 | Investor presentation dated August 1, 2022 |
|---|
104 Cover Page Interactive Data File (formatted as inline XBRL and contained
in Exhibit 101)
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | | C&F FINANCIAL CORPORATION | ||
| | | | | (Registrant) | |
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| | | | | | |
| Date: | August 1, 2022 | | | By: | /s/ Jason E. Long |
| | | | | | Jason E. Long |
| | | | | | Chief Financial Officer and Secretary |
3
Exhibit 99.1
| Investor Presentation<br>August<br>2022 |
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| Cautionary Statements<br>Forward<br>-<br>Looking Statements.<br>Certain statements in this presentation may constitute “forward<br>-<br>looking statements” within the meaning of<br>federal securities laws<br>.. These forward<br>-<br>looking statements are based on the beliefs of the Corporation’s management, as<br>well as assumptions made by, and information currently available to, the Corporation’s management, and reflect management’s c<br>urr<br>ent views with respect to certain events that could have an impact on the Corporation’s future<br>financial performance. These forward<br>-<br>looking statements relate to expectations concerning matters that are not historical fact,<br>may express “belief,” “intention,” “expectation,” “potential” and similar expressions, and may use<br>the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “may,” “will,” “intend,” “should,” “could,” or similar expre<br>ssi<br>ons. These statements are inherently uncertain, and there can be no assurance that the underlying<br>assumptions will prove to be accurate. Actual results could differ materially from those anticipated or implied by such state<br>men<br>ts. Factors that could have a material adverse effect on the operations and future prospects of the<br>Corporation include, but are not limited to, changes in: (1) interest rates, such as volatility in short<br>-<br>term interest rates or<br>yields on U.S. Treasury bonds and increases or volatility in mortgage interest rates, (2) general business<br>conditions, as well as conditions within the financial markets, (3) general economic conditions, including unemployment level<br>s,<br>inflation rates, supply chain disruptions and slowdowns in economic growth, and also including the<br>economic impacts of the COVID<br>-<br>19 pandemic and the heightened impact it has on many of the risks described herein and in other pe<br>riodic reports the Corporation files with the<br>Securities and Exchange Commission (SEC)<br>, (4) the<br>legislative/regulatory climate, regulatory initiatives with respect to financial institutions, products and services, the Con<br>sum<br>er Financial Protection Bureau (CFPB) and the regulatory and enforcement activities of the CFPB, (5)<br>monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, a<br>nd<br>the effect of these policies on interest rates and business in our markets, (6) the value of securities<br>held in the Corporation’s investment portfolios, (7) the quality or composition of the loan portfolios and the value of the c<br>oll<br>ateral securing those loans, (8) the inventory level and pricing of used automobiles, including sales<br>prices of repossessed vehicles, (9) the level of net charge<br>-<br>offs on loans and the adequacy of our allowance for loan losses, (10<br>) the level of indemnification losses related to mortgage loans sold, (11) demand for loan products,<br>(12) deposit flows, (13) the strength of the Corporation’s counterparties, (14) competition from both banks and non<br>-<br>banks, inclu<br>ding competition in the automobile finance markets, (15) demand for financial services in the<br>Corporation’s market area, (16) reliance on third parties for key services, (17) the commercial and residential real estate m<br>ark<br>ets, (18) demand in the secondary residential mortgage loan markets, (19) the Corporation’s<br>technology initiatives and other strategic initiatives, (20) the Corporation’s branch expansions and consolidations, (21) cyb<br>er<br>threats, attacks or events, (22) expansion of C&F Bank’s product offerings, and (23) accounting<br>principles, policies and guidelines, and elections by the Corporation thereunder. These risks and uncertainties should be con<br>sid<br>ered in evaluating the forward<br>-<br>looking statements contained herein, and readers are cautioned not<br>to place undue reliance on any forward<br>-<br>looking statements, which speak only as of the date of this presentation. For additional<br>information on risk factors that could affect the forward<br>-<br>looking statements contained herein, see<br>the Corporation’s Annual Report on Form 10<br>-<br>K for the year ended December 31, 2021 and other reports filed with the SEC. The Corp<br>oration undertakes no obligation to update any forward<br>-<br>looking statement, whether as a result<br>of new information, future events or otherwise.<br>Use of Certain Non<br>-<br>GAAP Financial Measures.<br>The accounting and reporting policies of the Corporation conform to GAAP in the United States and prevailing practices in the<br>ba<br>nking industry. However, certain non<br>-<br>GAAP measures are used by management to supplement the<br>evaluation of the Corporation’s financial condition and performance. These include return on average tangible common equity (<br>ROA<br>TCE), tangible common equity to tangible assets (TCE/TA), and tangible book value per share.<br>A<br>reconciliation of the non<br>-<br>GAAP financial measures used by the Corporation to evaluate and measure the Corporation’s financial co<br>ndition and performance to the most directly comparable GAAP financial measures is presented<br>in an appendix.<br>No Offer or Solicitation<br>This presentation does not constitute an offer to sell or a solicitation to buy any securities. No offer of securities shall<br>be<br>made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as<br>amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer, solic<br>ita<br>tion or sale would be unlawful.<br>About C&F Financial Corporation.<br>Additional information regarding the Corporation’s products and services, as well as access to its filings with the SEC, are<br>ava<br>ilable on the Corporation’s website at http://www.cffc.com.<br>2 |
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| Our Company |
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| Investment Highlights (as of 06/30/2022)<br>$2.33<br>Total Assets ($B)<br>$162.0<br>Market Cap ($mil)<br>•<br>Strong community banking funding<br>base with roots in key markets in<br>Virginia<br>•<br>Regional exposure through elite<br>mortgage banking and consumer<br>finance segments<br>•<br>Diverse lines of business with<br>experienced management teams<br>•<br>Top<br>-<br>tier financial performance<br>•<br>Strong balance sheet and asset<br>quality<br>•<br>Outstanding capital management<br>allows for a quality dividend while<br>maintaining sufficient capital for<br>organic and non<br>-<br>organic growth<br>$1.48<br>Total Loans, HFI<br>($B)<br>$2.01<br>Total Deposits<br>($B)<br>1.09%<br>ROAA<br>(YTD<br>ann<br>)<br>14.33%<br>ROATCE *<br>(YTD<br>ann<br>)<br>$47.85<br>TBV per share *<br>$1.60<br>Quarterly Dividend<br>per share<br>(annualized)<br>4<br>* Non<br>-<br>GAAP financial measure. For non<br>-<br>GAAP financial measures, see reconciliation to most directly comparable GAAP measures in<br>“Appendix<br>–<br>Reconciliation of Non<br>-<br>GAAP Disclosures”<br>■<br>C&F Bank footprint<br>■<br>C&F Financial Corporation footprint |
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| Our Executive Leadership<br>•<br>President of C&F Bank<br>•<br>30+ years in financial<br>services industry including<br>leadership experience with<br>the Virginia Bankers<br>Association and<br>PricewaterhouseCoopers<br>•<br>25+ years in leadership at<br>C&F<br>Thomas F. Cherry<br>President & CEO<br>C&F Financial Corporation<br>Age: 53<br>•<br>20+ years in financial<br>services industry<br>including leadership<br>experience with the<br>financial services group<br>at<br>Yount<br>, Hyde, &<br>Barbour, CPA<br>•<br>8 years in leadership at<br>C&F<br>Jason E. Long<br>EVP & CFO<br>C&F Financial Corporation<br>Age: 42<br>•<br>30+ years in indirect auto<br>lending business including<br>leadership experience with Ally<br>Financial and United Auto<br>Credit<br>•<br>15+ years in leadership with<br>C&F Finance Company<br>•<br>5+ years as member of the<br>American Financial Services<br>Association (AFSA) Independent<br>Auto Finance Executives<br>Committee<br>S. Dustin Crone<br>President & CEO<br>C&F Finance Company<br>Age: 54<br>•<br>39+ years in mortgage<br>banking business<br>•<br>26+ years in leadership<br>with C&F Mortgage<br>Corporation and C&F<br>Bank<br>•<br>Started America’s<br>Mortgage Cooperative<br>(AMC)<br>Bryan E.<br>McKernon<br>President & CEO<br>C&F Mortgage Corporation<br>Age: 65<br>5 |
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| Awards<br>6 |
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| Our Vision and Values<br>“It is our aim to be the<br>premier financial services<br>company in the markets we<br>serve.”<br>7 |
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| Lines of Business |
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| Our Lines of Business<br>Community Banking<br>Mortgage<br>Banking<br>Consumer Finance<br>We conduct mortgage banking activities through C&F<br>Mortgage and its 51%<br>-<br>owned subsidiary, C&F Select<br>LLC. C&F Mortgage provides mortgage loan origination<br>services through 17 locations in Virginia, two in North<br>Carolina, and one each in Maryland, South Carolina,<br>and West Virginia. C&F Select LLC provides mortgage<br>loan origination services through two locations in<br>Richmond, Virginia.<br>We conduct consumer finance activities through C&F<br>Finance. C&F Finance is a regional indirect financing<br>company purchasing automobile, marine and recreational<br>vehicle (RV) retail installment sales contracts throughout<br>Virginia and in portions of Alabama, Colorado, Florida,<br>Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland,<br>Minnesota, Missouri, New Jersey, North Carolina, Ohio,<br>Pennsylvania, South Carolina, Tennessee, Texas, and West<br>Virginia through its office in Richmond, Virginia.<br>9<br>49%<br>25%<br>44%<br>40%<br>67%<br>18%<br>44%<br>24%<br>27%<br>13%<br>33%<br>31%<br>31%<br>32%<br>34%<br>$18.9<br>$22.1<br>$28.7<br>$15.1<br>$12.4<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22<br>Net Income ($mil) and Contribution by Segment<br>Community Banking<br>Mortgage Banking<br>Consumer Finance<br>C&F Bank provides community banking services at its<br>30 banking offices and 4 commercial loan offices.<br>These locations provide a wide range of banking<br>services to individuals and businesses.<br>C&F Wealth Management is a full<br>-<br>service brokerage<br>firm offering a comprehensive range of wealth<br>management services and insurance products through<br>third<br>-<br>party service providers primarily at C&F Bank<br>branch locations. |
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| Community<br>Banking<br>Community banking segment<br>•<br>Strong community bank franchise<br>led by seasoned community bank<br>leaders<br>•<br>Opened loan production offices in<br>Charlottesville, Fredericksburg, and<br>Hampton Roads over the past 5<br>years<br>•<br>30 locations in key Virginia markets<br>•<br>Full<br>-<br>service brokerage firm offering a<br>comprehensive range of wealth<br>management services and insurance<br>products<br>•<br>Diverse loan portfolio and revenue<br>streams<br>•<br>Strong low<br>-<br>cost (0.22% QTD) core<br>deposit base<br>10<br>Resi<br>mortgage<br>21%<br>AD&C<br>12%<br>CRE<br>51%<br>C&I<br>11%<br>Equity<br>Lines<br>4%<br>Consumer<br>1%<br>Loan Composition (Jun<br>-<br>22)<br>12.7%<br>CAGR<br>$13.1<br>$16.4<br>$15.2<br>$7.3<br>$8.1<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22<br>Noninterest Income ($mil)<br>Gain on sale of loans<br>Other income, net<br>Investment services income<br>Service charges on deposit accounts<br>Interchange Income<br>62%<br>55%<br>53%<br>54%<br>2019<br>2020<br>2021<br>Jun-22<br>Loan / Deposit (Bank only, excl PPP)<br>Non<br>-<br>owner occupied CRE was 211% of total risk<br>-<br>based capital as<br>of 03/31/2022<br>* Excludes Paycheck Protection Program (PPP) loans of $0, $77 million, $18 million, and $1 million as of December 2019, Decem<br>ber<br>2020, December 2021, and June 2022, respectively<br>$802<br>$964<br>$1,024<br>$1,082<br>2019<br>2020<br>2021<br>Jun-22<br>Total Loans, excl PPP *<br>Total Loans, excl PPP |
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| Community banking segment<br>•<br>#1 Deposit Market Share in New Kent and Cumberland counties<br>•<br>7 of 8 counties projecting faster population growth than Virginia average<br>•<br>4 of 8 counties projecting faster household income growth than Virginia<br>average<br>Richmond Metro<br>•<br>#1 Deposit Market Share in King William county<br>•<br>6 of 10 counties projecting faster population growth than Virginia average<br>Peninsulas<br>•<br>Entered the market with a loan production office and de novo branch in<br>2017<br>•<br>Projecting faster household income growth than Virginia average<br>Charlottesville Metro<br>•<br>Stafford branch acquired in whole<br>-<br>bank acquisition of Peoples Community<br>Bank in 2020<br>•<br>Entered Fredericksburg (City) with a loan production office in 2021 with a<br>de novo branch approved to open in 2022<br>•<br>Projecting faster population growth than Virginia average<br>Fredericksburg Metro<br>Demographic data is provided by<br>Claritas<br>based primarily on US Census data. For non<br>-<br>census year data,<br>Claritas<br>uses samples and projections to estimate the demographic data. Data aggregated by S&P Global Market Intelligence.<br>Markets are defined as groupings of the counties in which C&F operates. “Richmond Metro” is defined as New Kent, Chesterfiel<br>d,<br>Henrico, Powhatan, Cumberland, Hanover, Goochland, and Richmond (City). “Peninsulas” is defined as King William, James City,<br>Middlesex, Westmoreland, Williamsburg (City), King George, Newport News (City), Richmond (County), Hampton (City), and York.<br>“C<br>harlottesville Metro” is defined as Charlottesville (City) and Albemarle. “Fredericksburg Metro” is defined as Fredericksbur<br>g (<br>City) and<br>Stafford. The definition of “Non<br>-<br>Northern Virginia” excludes cities and counties including Alexandria, Loudon, Falls Church, Fai<br>rfax, Arlington, Alexandria, Prince William, Manassas Park, and<br>Fauqier<br>..<br>11<br>The footprint includes 8 of the top 10 “non<br>-<br>Northern Virginia” counties in 2022 median household income and 5 of the top 10 in p<br>rojected<br>population growth through 2027 |
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| Mortgage<br>Banking<br>Mortgage banking segment<br>•<br>Strong mortgage<br>banking franchise led by<br>seasoned mortgage<br>banking leaders<br>•<br>Division to provide<br>mortgage loan<br>origination as a service<br>•<br>Originations<br>concentrated in<br>purchase financing<br>reduces business cycle<br>impact<br>•<br>17 locations in Virginia,<br>two in North Carolina,<br>and one each in<br>Maryland, South<br>Carolina, and West<br>Virginia<br>•<br>All originations sold<br>servicing released<br>12<br>86%<br>88%<br>76%<br>48%<br>64%<br>57%<br>82%<br>14%<br>12%<br>24%<br>52%<br>36%<br>43%<br>18%<br>$712<br>$643<br>$944<br>$1,772<br>$1,459<br>$804<br>$401<br>2017<br>2018<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22<br>Originations ($mil)<br>Purchases<br>Refinancings<br>$13.2<br>$11.9<br>$15.7<br>$35.8<br>$31.6<br>$18.1<br>$8.1<br>2017<br>2018<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22<br>Noninterest Income ($mil)<br>-<br>Mortgage Banking<br>Gain on sale of loans<br>Mortgage banking fee income<br>Mortgage lender services fee income<br>Other income |
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| Mortgage banking segment<br>Lender Solutions is a growing division<br>of C&F’s mortgage banking segment<br>that provides mortgage loan<br>origination as a service to community<br>financial institutions<br>As of June 30, 2022, Lender<br>Solutions<br>active clientele included<br>16<br>community financial institutions<br>$<br>-<br>$<br>-<br>$0.4<br>$2.2<br>$2.5<br>$1.4<br>$0.9<br>2017<br>2018<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22<br>Mortgage lender services fee income ($mil)<br>13 |
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| Consumer finance segment<br>Consumer<br>Finance<br>•<br>Unique indirect automobile financing<br>franchise with a regional presence<br>and seasoned management team<br>•<br>Established in 2002 with the<br>acquisition of an indirect, non<br>-<br>prime<br>auto finance company<br>•<br>Over the past several years we have<br>adjusted underwriting criteria, which<br>has resulted in purchasing automobile<br>loan contracts with higher credit<br>scores<br>•<br>Expanded in 2018 to provide<br>Marine/RV loans to prime borrowers<br>•<br>Dealer relationships in Virginia and in<br>portions of Alabama, Colorado,<br>Florida, Georgia, Illinois, Indiana, Iowa,<br>Kansas, Kentucky, Maryland,<br>Minnesota, Missouri, New Jersey,<br>North Carolina, Ohio, Pennsylvania,<br>South Carolina, Tennessee, Texas and<br>West Virginia.<br>14<br>6.96<br>7.53<br>6.73<br>5.92<br>2019<br>2020<br>2021<br>Jun-22<br>ALLL (%)<br>-<br>Consumer Finance<br>13.48<br>12.65<br>11.30<br>9.82<br>2019<br>2020<br>2021<br>Jun-22<br>Loan Yield (%)<br>-<br>Consumer Finance<br>94%<br>87%<br>87%<br>87%<br>6%<br>13%<br>13%<br>13%<br>$313<br>$312<br>$368<br>$437<br>2019<br>2020<br>2021<br>Jun-22<br>Total Loans ($mil)<br>Autos<br>Marine/RV<br>3.05<br>1.54<br>-<br>0.14<br>-<br>0.10<br>2019<br>2020<br>2021<br>Jun-22<br>NCO (% of Average Loans) |
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| Financial Highlights |
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| Balance Sheet<br>Total Assets<br>($<br>bil<br>)<br>14.7%<br>CAGR<br>19.3%<br>CAGR<br>13.3%<br>CAGR<br>Total Deposits<br>($<br>bil<br>)<br>Total Loans HFI, excl PPP *<br>($<br>bil<br>)<br>16<br>$1.29<br>$1.75<br>$1.91<br>$2.01<br>2019<br>2020<br>2021<br>Jun-22<br>$1.66<br>$2.09<br>$2.26<br>$2.33<br>2019<br>2020<br>2021<br>Jun-22<br>* Excludes Paycheck Protection Program (PPP) loans of $0, $77 million, $18 million, and $1 million as of December 2019, Decem<br>ber<br>2020, December 2021, and June 2022, respectively<br>$1.08<br>$1.24<br>$1.35<br>$1.48<br>2019<br>2020<br>2021<br>Jun-22 |
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| Net Interest Margin (NIM)<br>Annualized net interest margin increased for the<br>second quarter of 2022 compared to the first quarter<br>of 2022, due primarily to:<br>•<br>Growth in loans, especially higher yielding auto<br>loans at the consumer finance segment funded by<br>cash and growth in low<br>-<br>cost deposits<br>•<br>An increase in market rates that drove increases<br>to the community banking segment’s variable rate<br>loan portfolio, cash, and securities portfolio<br>•<br>A decrease in cost of funds driven by effective<br>management of retail deposit costs and growth in<br>non<br>-<br>time deposits<br>Loan yield pressures continue at the consumer finance<br>segment as purchases are focused on higher quality<br>loans with lower charge<br>-<br>offs and lower yields.<br>C&F Financial Corporation<br>Yield, Cost, and Net Interest Margin (NIM) (%)<br>17<br>1.06<br>0.77<br>0.44<br>0.35<br>0.33<br>6.51<br>5.39<br>4.67<br>4.26<br>4.44<br>5.52<br>4.65<br>4.26<br>3.93<br>4.12<br>2019<br>2020<br>2021<br>Mar-22<br>Jun-22<br>Cost of Funds<br>Yield on Earning Assets<br>NIM<br>QTD<br>QTD |
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| Gain on sale<br>of loans<br>66%<br>Mortgage<br>banking fee<br>income<br>22%<br>Mortgage<br>lender<br>services fee<br>income<br>11%<br>Other<br>income<br>1%<br>Interchange<br>Income<br>37%<br>Service<br>charges on<br>deposit<br>accounts<br>27%<br>Investment<br>services<br>income<br>16%<br>Other<br>income,<br>net<br>20%<br>Noninterest Income<br>Decrease in the second quarter of 2022<br>compared to the second quarter of 2021 due<br>primarily to:<br>•<br>lower volume of mortgage loan production<br>and mortgage lender services,<br>•<br>lower margins on sales of mortgage loans<br>and<br>•<br>unrealized gains/losses related to deferred<br>compensation included in other,<br>Partially offset by:<br>•<br>higher income from service charges on<br>deposit accounts and<br>•<br>debit card interchange activity.<br>C&F Financial Corporation<br>Noninterest Income ($mil)<br>18<br>Community Banking<br>Noninterest Income (% of total) (YTD Jun<br>-<br>22)<br>Mortgage Banking<br>Noninterest Income (% of total) (YTD Jun<br>-<br>22)<br>$13.1<br>$16.4<br>$15.2<br>$7.3<br>$8.1<br>$15.7<br>$35.8<br>$31.6<br>$18.1<br>$8.1<br>$31.4<br>$54.6<br>$49.2<br>$26.9<br>$12.4<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22<br>Community Banking<br>Mortgage Banking<br>Consumer Finance<br>Other and Eliminations<br>*<br>* Includes other income (loss), net recorded at the holding company and elimination of intercompany transactions. |
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| Return on Average Equity (ROAE)<br>(%)<br>Earnings<br>Earnings per Share (EPS)<br>($)<br>Return on Average Assets (ROAA)<br>(%)<br>19<br>$5.47<br>$6.06<br>$7.95<br>$4.11<br>$3.49<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22<br>12.02<br>12.54<br>14.77<br>15.83<br>12.36<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22<br>Return on Average Tangible Common Equity (ROATCE) *<br>(%)<br>* Non<br>-<br>GAAP financial measure. For non<br>-<br>GAAP financial measures, see reconciliation to most directly comparable GAAP measures in<br>“Appendix<br>–<br>Reconciliation of Non<br>-<br>GAAP Disclosures”<br>13.53<br>14.92<br>17.15<br>18.50<br>14.33<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22<br>1.20<br>1.14<br>1.34<br>1.43<br>1.09<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22 |
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| Capital<br>C&F Financial Corporation<br>Capital Ratios (%)<br>C&F Bank<br>Capital Ratios (%)<br>* Non<br>-<br>GAAP financial measure. For non<br>-<br>GAAP financial measures, see reconciliation to most directly comparable GAAP measures in<br>“Appendix<br>–<br>Reconciliation of Non<br>-<br>GAAP Disclosures”<br>The Corporation’s and the Bank’s actual capital ratios are presented relative to regulatory requirements for the Bank and req<br>uir<br>ements that apply to bank holding companies.<br>20<br>14.0<br>13.8<br>14.5<br>14.2<br>12.8<br>12.5<br>13.3<br>12.9<br>12.8<br>12.5<br>13.3<br>12.9<br>10.3<br>9.6<br>9.8<br>9.5<br>2019<br>2020<br>2021<br>Jun-22<br>$105.5<br>$125.9<br>$130.8<br>$138.5<br>$79.2<br>$94.5<br>$98.1<br>$103.9<br>$59.4<br>$70.8<br>$73.6<br>$77.9<br>$64.9<br>$81.4<br>$88.1<br>$93.9<br>2019<br>2020<br>2021<br>Jun-22<br>$52.2<br>$58.8<br>$72.9<br>$71.7<br>$61.7<br>$70.2<br>$84.7<br>$84.3<br>$81.1<br>$93.5<br>$108.9<br>$110.0<br>$84.8<br>$93.7<br>$104.4<br>$105.3<br>2019<br>2020<br>2021<br>Jun-22<br>C&F Financial Corporation<br>Capital over Minimum ($mil)<br>C&F Bank<br>Capital over Prompt Corrective Action (“PCA”) Well<br>-<br>Capitalized ($mil)<br>*<br>14.9<br>15.2<br>15.8<br>15.5<br>13.6<br>12.5<br>13.0<br>12.8<br>11.7<br>10.9<br>11.5<br>11.4<br>11.1<br>9.6<br>9.7<br>9.5<br>9.1<br>8.1<br>8.2<br>7.3<br>2019<br>2020<br>2021<br>Jun-22 |
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| Asset Quality<br>Allowance for Loan Losses (ALL)<br>(% of Total Loans)<br>Nonaccruals<br>(% of Total Loans)<br>Net Charge<br>-<br>offs<br>(% of Average Loans)<br>21<br>0.19<br>0.29<br>0.23<br>0.01<br>0.20<br>0.13<br>0.10<br>0.11<br>0.22<br>0.25<br>0.21<br>0.06<br>2019<br>2020<br>2021<br>Jun-22<br>Bank<br>Finance<br>Corporation<br>1.32<br>1.46<br>1.43<br>1.31<br>6.96<br>7.53<br>6.73<br>5.92<br>2.95<br>2.90<br>2.85<br>2.67<br>2019<br>2020<br>2021<br>Jun-22<br>Bank<br>Finance<br>Corporation<br>Amendments to ASC 326 (“CECL”) will be effective for the Corporation<br>beginning on January 1, 2023.<br>3.05<br>1.54<br>0.89<br>0.37<br>-<br>0.03<br>-<br>0.01<br>2019<br>2020<br>2021<br>Jun-22<br>Bank<br>Finance<br>Corporation |
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| Liquidity<br>Objective<br>: Ensure the continuous availability of<br>funds to satisfy the credit needs of our<br>customers and the demands of our depositors,<br>creditors and investors.<br>Additional sources of liquidity available to the<br>Corporation include cash flows from<br>operations, loan payments and payoffs, deposit<br>growth, maturities, calls and sales of securities,<br>the issuance of brokered certificates of deposit<br>and the capacity to borrow additional funds.<br>Management believes that the Corporation<br>maintains overall liquidity sufficient to satisfy<br>its operational requirements and<br>contractual obligations.<br>C&F Financial Corporation<br>Liquidity ($mil)<br>22<br>Liquid assets include cash and due from banks, interest<br>-<br>bearing deposits at other banks and<br>nonpledged<br>securities available for sale.<br>The revolving bank line of credit was terminated by C&F voluntarily during 2021.<br>$715<br>$699<br>$913<br>$883<br>2019<br>2020<br>2021<br>Jun-22<br>Liquid assets<br>Availability: Unsecured federal funds agreements<br>Availability: Repurchase lines of credit<br>Availability: Borrowings from Federal Home Loan Bank (FHLB)<br>Availability: Borrowings from Federal Reserve Bank (FRB)<br>Availability: Revolving bank line of credit |
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| 165<br>190<br>802<br>313<br>139<br>502<br>1,082<br>437<br>Cash and Cash<br>Equivalents<br>Securities<br>Loans, HFI, excl PPP<br>(Community<br>Banking)<br>Loans, HFI<br>(Consumer Finance)<br>2019<br>2020<br>2021<br>Jun-22<br>Cash and Cash<br>Equivalents<br>6%<br>Securities<br>22%<br>Loans, HFS<br>2%<br>Loans, HFI<br>63%<br>Non<br>-<br>Earning<br>Assets<br>7%<br>Assets<br>Composition<br>(% of Total Assets) (Jun<br>-<br>22)<br>Yield on Earning Assets<br>(%)<br>Growth by Segment<br>($ mil)<br>23<br>6.51<br>5.39<br>4.67<br>4.26<br>4.44<br>2019<br>2020<br>2021<br>Mar-22<br>Jun-22<br>14.3%<br>CAGR<br>12.7%<br>CAGR<br>QTD<br>QTD |
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| Resi mortgage<br>15%<br>AD&C<br>9%<br>CRE<br>36%<br>C&I<br>8%<br>Equity Lines<br>3%<br>Consumer<br>29%<br>PPP<br>0%<br>Loans, HFI<br>Composition<br>(% of Total Loans) (Jun<br>-<br>22)<br>Yield<br>(%)<br>Growth by Segment<br>($ mil)<br>24<br>7.58<br>6.18<br>5.86<br>5.68<br>5.75<br>2019<br>2020<br>2021<br>Mar-22<br>Jun-22<br>$181<br>$124<br>$327<br>$105<br>$52<br>$327<br>$0<br>$226<br>$134<br>$555<br>$118<br>$42<br>$445<br>$1<br>Resi<br>mortgage<br>AD&C<br>CRE<br>C&I<br>Equity<br>Lines<br>Consumer<br>PPP<br>2019<br>2020<br>2021<br>Jun-22<br>23.7%<br>CAGR<br>13.1%<br>CAGR<br>9.1%<br>CAGR<br>QTD<br>QTD |
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| U.S. Treasury<br>securities<br>11%<br>U.S.<br>government<br>agencies and<br>corporations<br>25%<br>Mortgage<br>-<br>backed<br>securities<br>39%<br>Obligations<br>of states<br>and political<br>subdivisions<br>20%<br>Corporate and other debt<br>securities<br>5%<br>Securities<br>Composition<br>(% of Total Assets) (Jun<br>-<br>22)<br>Yield<br>(%)<br>Growth by Segment<br>($ mil)<br>25<br>2.89<br>2.37<br>1.71<br>1.70<br>1.85<br>2019<br>2020<br>2021<br>Mar-22<br>Jun-22<br>$0<br>$21<br>$87<br>$82<br>$0<br>$57<br>$124<br>$196<br>$100<br>$26<br>U.S. Treasury<br>securities<br>U.S. government<br>agencies and<br>corporations<br>Mortgage-backed<br>securities<br>Obligations of states<br>and political<br>subdivisions<br>Corporate and other<br>debt securities<br>2019<br>2020<br>2021<br>Jun-22<br>Weighted average life of the portfolio as of June 30, 2022 was 3.3 years.<br>QTD<br>QTD |
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| Total Deposits<br>86%<br>Borrowings<br>3%<br>TruPS<br>1%<br>Equity<br>8%<br>Other<br>2%<br>Funding<br>Composition<br>(% of Total Assets) (Jun<br>-<br>22)<br>Cost of Funds<br>(%)<br>Growth by Segment<br>($ mil)<br>26<br>1.06<br>0.77<br>0.44<br>0.35<br>0.33<br>2019<br>2020<br>2021<br>Mar-22<br>Jun-22<br>$1,291<br>$136<br>$25<br>$165<br>$2,006<br>$67<br>$25<br>$196<br>Total Deposits<br>Borrowings<br>TruPS<br>Equity<br>2019<br>2020<br>2021<br>Jun-22<br>QTD<br>QTD |
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| Deposits<br>Composition<br>(% of Total Deposits) (Jun<br>-<br>22)<br>Cost of Deposits<br>(%)<br>Growth by Segment<br>($ mil)<br>27<br>Noninterest<br>bearing<br>31%<br>Savings and<br>interest bearing<br>50%<br>Time<br>19%<br>3.44<br>1.64<br>0.90<br>0.70<br>0.66<br>0.75<br>0.60<br>0.30<br>0.23<br>0.22<br>2019<br>2020<br>2021<br>Mar-22<br>Jun-22<br>Savings and interest bearing<br>Time<br>Total Deposits<br>$297<br>$572<br>$422<br>$623<br>$1,003<br>$380<br>Noninterest bearing<br>Savings and interest bearing<br>Time<br>2019<br>2020<br>2021<br>Jun-22<br>34.5%<br>CAGR<br>25.2%<br>CAGR<br>QTD<br>QTD |
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| Appendix |
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| Acquisitions<br>•<br>Headquartered in Powhatan, VA<br>•<br>$390 million in total assets at announcement<br>•<br>7 community banking offices<br>•<br>The transaction was completed on October 1, 2013<br>•<br>Headquartered in Montross, VA<br>•<br>$194 million in total assets at announcement<br>•<br>5 community banking offices<br>•<br>The transaction was completed on January 1, 2020<br>•<br>Estimated fair value of loans and deposits acquired of<br>$124 and $172 million, respectively<br>29 |
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| Reconciliation of Non<br>-<br>GAAP Disclosures<br>30<br>($ thousands)<br>2019<br>2020<br>2021<br>Jun-21<br>Jun-22<br>Return on Average Tangible Common Equity<br>Average total equity, as reported<br>156,810<br>$<br><br>178,862<br>$<br><br>197,204<br>$<br><br>192,718<br>$<br><br>202,614<br>$<br><br>Average goodwill<br>(14,425)<br><br><br>(25,191)<br><br><br>(25,191)<br><br><br>(25,191)<br><br><br>(25,191)<br><br><br>Average other intangible assets<br>(1,006)<br><br><br>(2,442)<br><br><br>(2,127)<br><br><br>(2,203)<br><br><br>(1,896)<br><br><br>Average noncontrolling interest<br>(285)<br><br><br>(767)<br><br><br>(907)<br><br><br>(731)<br><br><br>(754)<br><br><br>Average tangible common equity<br>141,094<br>$<br><br>150,462<br>$<br><br>168,979<br>$<br><br>164,593<br>$<br><br>174,773<br>$<br><br>Net income<br>18,850<br>$<br><br>22,424<br>$<br><br>29,123<br>$<br><br>15,255<br>$<br><br>12,518<br>$<br><br>Amortization of intangibles<br>230<br><br><br>332<br><br><br>314<br><br><br>157<br><br><br>149<br><br><br>Net income attributable to noncontrolling interest<br>9<br>(307)<br><br><br>(456)<br><br><br>(186)<br>$<br><br>(147)<br>$<br><br>Net income attributable to C&F Financial Corporation<br>19,089<br>$<br><br>22,449<br>$<br><br>28,981<br>$<br><br>15,226<br>$<br><br>12,520<br>$<br><br>Annualized return on average tangible common equity<br>13.53%<br>14.92%<br>17.15%<br>18.50%<br>14.33% |
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| Reconciliation of Non<br>-<br>GAAP Disclosures<br>31<br>($ thousands, except per share)<br>2019<br>2020<br>2021<br>Jun-22<br>Tangible Common Equity (TCE) / Tangible Assets (TA)<br>Total equity, as reported<br>165,279<br>$<br><br>194,471<br>$<br><br>211,024<br>$<br><br>196,283<br>$<br><br>Goodwill<br>(14,425)<br><br><br>(25,191)<br><br><br>(25,191)<br><br><br>(25,191)<br><br><br>Other intangible assets<br>(912)<br><br><br>(2,291)<br><br><br>(1,977)<br><br><br>(1,828)<br><br><br>Noncontrolling interest<br>(481)<br><br><br>(666)<br><br><br>(706)<br><br><br>(608)<br><br><br>Tangible common equity<br>149,461<br>$<br><br>166,323<br>$<br><br>183,150<br>$<br><br>168,656<br>$<br><br>Total assets, as reported<br>1,657,432<br>$<br><br>2,086,310<br>$<br><br>2,264,521<br>$<br><br>2,334,340<br>$<br><br>Goodwill<br>(14,425)<br><br><br>(25,191)<br><br><br>(25,191)<br><br><br>(25,191)<br><br><br>Other intangible assets<br>(912)<br><br><br>(2,291)<br><br><br>(1,977)<br><br><br>(1,828)<br><br><br>Noncontrolling interest<br>(481)<br><br><br>(666)<br><br><br>(706)<br><br><br>(608)<br><br><br>Tangible assets<br>1,641,614<br>$<br><br>2,058,162<br>$<br><br>2,236,647<br>$<br><br>2,306,713<br>$<br><br>Tangible Common Equity (TCE) / Tangible Assets (TA)<br>9.10%<br>8.08%<br>8.19%<br>7.31%<br>Tangible Book Value Per Share<br>Equity attributable to C&F Financial Corporation<br>164,798<br>$<br><br>193,805<br>$<br><br>210,318<br>$<br><br>195,675<br>$<br><br>Less goodwill<br>(14,425)<br><br><br>(25,191)<br><br><br>(25,191)<br><br><br>(25,191)<br><br><br>Less other intangible assets<br>(912)<br><br><br>(2,291)<br><br><br>(1,977)<br><br><br>(1,828)<br><br><br>Tangible equity attributable to C&F Financial Corporation<br>149,461<br>$<br><br>166,323<br>$<br><br>183,150<br>$<br><br>168,656<br>$<br><br>Shares outstanding<br>3,438,126<br><br><br>3,670,301<br><br><br>3,545,554<br><br><br>3,524,385<br><br><br>Book value per share<br>47.93<br>$<br><br>52.80<br>$<br><br>59.32<br>$<br><br>55.52<br>$<br><br>Tangible book value per share<br>43.47<br>$<br><br>45.32<br>$<br><br>51.66<br>$<br><br>47.85<br>$ |
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