Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2025
or
☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _________ to _________
Commission File Number 000-23423
C&F FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Virginia
54-1680165
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
3600 La Grange Parkway Toano, VA
23168
(Address of principal executive offices)
(Zip Code)
(804) 843-2360
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
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.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
At May 2, 2025, the latest practicable date for determination, 3,239,798 shares of common stock, $1.00 par value, of the registrant were outstanding.
TABLE OF CONTENTS
PART I - Financial Information
Page
Item 1.
Financial Statements
3
Consolidated Balance Sheets (Unaudited) –March 31, 2025 and December 31, 2024
Consolidated Statements of Income (Unaudited) – Three months ended March 31, 2025 and 2024
4
Consolidated Statements of Comprehensive Income (Unaudited) – Three months ended March 31, 2025 and 2024
5
Consolidated Statements of Equity (Unaudited) – Three months ended March 31, 2025 and 2024
6
Consolidated Statements of Cash Flows (Unaudited) –Three months ended March 31, 2025 and 2024
7
Notes to Consolidated Interim Financial Statements (Unaudited)
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
35
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
64
Item 4.
Controls and Procedures
66
PART II - Other Information
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
67
Item 5.
Other Information
Item 6.
Exhibits
68
Signatures
69
2
Part I – FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
C&F FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except per share amounts)
March 31,
December 31,
2025
2024
Assets
Cash and due from banks
$
13,468
16,163
Interest-bearing deposits in other banks
62,490
49,423
Total cash and cash equivalents
75,958
65,586
Securities—available for sale at fair value, amortized cost of $455,669 and $448,616, respectively
431,513
418,625
Loans held for sale, at fair value
27,278
20,112
Loans, net of allowance for credit losses of $40,043 and $40,087, respectively
1,903,283
1,880,311
Restricted stock, at cost
3,680
3,592
Corporate premises and equipment, net
39,580
40,118
Other real estate owned, net of valuation allowance of $215 and $215, respectively
1,316
Accrued interest receivable
10,598
10,592
Goodwill
25,191
Other intangible assets, net
1,084
1,147
Bank-owned life insurance
21,309
21,191
Net deferred tax asset
16,593
17,719
Other assets
55,147
57,874
Total assets
2,612,530
2,563,374
Liabilities
Deposits
Noninterest-bearing demand deposits
579,638
526,069
Savings and interest-bearing demand deposits
809,449
826,462
Time deposits
827,567
818,329
Total deposits
2,216,654
2,170,860
Short-term borrowings
35,909
28,994
Long-term borrowings
58,080
68,158
Trust preferred capital notes
25,466
25,457
Accrued interest payable
3,931
4,403
Other liabilities
37,219
38,532
Total liabilities
2,377,259
2,336,404
Commitments and contingent liabilities (Note 11)
Equity
Common stock ($1.00 par value, 8,000,000 shares authorized, 3,235,781 and 3,233,672 shares issued and outstanding, respectively, includes 113,808 and 119,778 of unvested shares, respectively)
3,123
3,114
Additional paid-in capital
108
36
Retained earnings
251,694
247,814
Accumulated other comprehensive loss, net
(20,291)
(24,604)
Equity attributable to C&F Financial Corporation
234,634
226,360
Noncontrolling interest
637
610
Total equity
235,271
226,970
Total liabilities and equity
See notes to consolidated interim financial statements.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31,
Interest income
Interest and fees on loans
32,382
29,586
Interest on interest-bearing deposits in other banks
502
259
Interest and dividends on securities
U.S. treasury, government agencies and corporations
289
602
Mortgage-backed securities
1,394
886
Tax-exempt obligations of states and political subdivisions
911
883
Taxable obligations of states and political subdivisions
195
184
Corporate and other
315
308
Total interest income
35,988
32,708
Interest expense
Savings and interest-bearing deposits
1,805
1,614
7,964
6,916
Borrowings
859
722
350
298
Total interest expense
10,978
9,550
Net interest income
25,010
23,158
Provision for credit losses
3,000
3,500
Net interest income after provision for credit losses
22,010
19,658
Noninterest income
Gains on sales of loans
1,847
1,288
Interchange income
1,475
Service charges on deposit accounts
990
1,047
Investment income from other equity interests
207
167
Mortgage banking fee income
570
479
Wealth management services income, net
732
731
Mortgage lender services income
536
503
Other service charges and fees
498
396
Other income (loss), net
718
1,406
Total noninterest income
7,573
7,492
Noninterest expenses
Salaries and employee benefits
13,483
14,252
Occupancy
2,193
2,132
Data processing
2,866
2,829
Professional fees
921
915
Insurance expense
491
406
Marketing and advertising expenses
529
168
Loan processing and collection expenses
683
628
Other
1,893
1,820
Total noninterest expenses
23,059
23,150
Income before income taxes
6,524
4,000
Income tax expense
1,129
565
Net income
5,395
3,435
Less net income attributable to noncontrolling interest
27
34
Net income attributable to C&F Financial Corporation
5,368
3,401
Net income per share - basic and diluted
1.66
1.01
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
Other comprehensive income (loss), net of tax:
Securities available for sale
4,610
(2,066)
Defined benefit plan
(9)
Cash flow hedges
(288)
77
Other comprehensive income (loss), net of tax
4,313
(1,982)
Comprehensive income
9,708
1,453
Less comprehensive income attributable to noncontrolling interest
Comprehensive income attributable to C&F Financial Corporation
9,681
1,419
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
Attributable to C&F Financial Corporation
Accumulated
Additional
Common
Paid - In
Retained
Comprehensive
Noncontrolling
Total
Stock
Capital
Earnings
Loss, Net
Interest
Balance December 31, 2024
Comprehensive income:
—
Other comprehensive income
Share-based compensation
461
Restricted stock vested
13
(13)
Common stock issued
1
45
46
Common stock purchased
(5)
(421)
(426)
Cash dividends declared ($0.46 per share)
(1,488)
Distributions to noncontrolling interest
Balance March 31, 2025
Balance December 31, 2023
3,238
6,567
233,760
(26,687)
638
217,516
Other comprehensive loss
510
26
(26)
(19)
(1,012)
(1,031)
Cash dividends declared ($0.44 per share)
(1,482)
(63)
Balance March 31, 2024
3,246
6,084
235,679
(28,669)
609
216,949
CONSOLIDATED STATEMENTS OF CASH FLOWS
Operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion of certain acquisition-related discounts, net
(108)
(155)
Depreciation and amortization
988
937
Amortization of premiums and accretion of discounts on securities, net
20
397
Reversal of provision for indemnifications
(25)
(140)
Income from bank-owned life insurance
(106)
Pension expense
183
226
Proceeds from sales of loans held for sale
108,010
87,479
Origination of loans held for sale
(112,972)
(94,769)
Gains on sales of loans held for sale
(1,847)
(1,288)
Other gains, net
141
194
Change in other assets and liabilities:
(6)
(197)
1,727
2,347
(472)
1,151
(1,178)
(2,626)
Net cash provided by operating activities
3,211
895
Investing activities:
Proceeds from sales, maturities and calls of securities available for sale and payments on mortgage-backed securities
17,176
37,324
Purchases of securities available for sale
(24,248)
(8,313)
Purchases of time deposits, net
Repayments on loans held for investment by non-bank affiliates
15,999
45,387
Purchases of loans held for investment by non-bank affiliates
(14,615)
(49,842)
Net increase in community banking loans held for investment
(27,487)
(73,617)
Purchases of corporate premises and equipment
(267)
(485)
Other investing activities, net
(92)
(566)
Net cash used in investing activities
(33,539)
(49,621)
Financing activities:
Net increase (decrease) in demand and savings deposits
36,556
(41,169)
Net increase in time deposits
9,238
62,971
Net decrease in short-term borrowings
(3,085)
(30,418)
Proceeds from long-term borrowings
40,000
Repurchases of common stock
Cash dividends paid
Other financing activities, net
(95)
(97)
Net cash provided by financing activities
40,700
28,774
Net increase (decrease) in cash and cash equivalents
10,372
(19,952)
Cash and cash equivalents at beginning of period
75,159
Cash and cash equivalents at end of period
55,207
Supplemental cash flow disclosures:
Interest paid
11,441
8,390
Income taxes paid
Supplemental disclosure of noncash investing and financing activities:
Liabilities assumed to acquire right of use assets at lease commencement
190
2,487
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE 1: Summary of Significant Accounting Policies
Principles of Consolidation: The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting and with applicable quarterly reporting regulations of the Securities and Exchange Commission (the SEC). They do not include all of the information and notes required by GAAP for complete financial statements. Therefore, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the C&F Financial Corporation Annual Report on Form 10-K for the year ended December 31, 2024 (2024 Annual Report). The accounting and reporting policies of the Corporation conform to GAAP and to predominant practices within the banking industry and are primarily disclosed in the 2024 Annual Report.
The unaudited consolidated financial statements include the accounts of C&F Financial Corporation (the Corporation), its direct wholly-owned subsidiary, Citizens and Farmers Bank (the Bank or C&F Bank), and indirect subsidiaries that are wholly-owned or controlled. Subsidiaries that are less than wholly owned are fully consolidated if they are controlled by the Corporation or one of its subsidiaries, and the portion of any subsidiary not owned by the Corporation is reported as noncontrolling interest. All significant intercompany accounts and transactions have been eliminated in consolidation. In addition, the Corporation owns all of the common stock of C&F Financial Statutory Trust I, C&F Financial Statutory Trust II, and Central Virginia Bankshares Statutory Trust I, all of which are unconsolidated subsidiaries. The subordinated debt owed to these trusts is reported as liabilities of the Corporation.
Nature of Operations: The Corporation is a bank holding company incorporated under the laws of the Commonwealth of Virginia. The Corporation owns all of the stock of its subsidiary, C&F Bank, which is an independent commercial bank chartered under the laws of the Commonwealth of Virginia.
C&F Bank has five wholly-owned subsidiaries: C&F Mortgage Corporation (C&F Mortgage), C&F Finance Company (C&F Finance), C&F Wealth Management Corporation (C&F Wealth Management), C&F Insurance Services, Inc. (C&F Insurance), and CVB Title Services, Inc. (CVB Title), all incorporated under the laws of the Commonwealth of Virginia. C&F Mortgage, organized in September 1995, originates and sells residential mortgages, provides mortgage loan origination services to third-party lenders and, through its subsidiary Certified Appraisals LLC, provides ancillary mortgage loan production services for residential appraisals. C&F Mortgage owns a 51 percent interest in C&F Select LLC, which was organized in January 2019 and is also engaged in the business of originating and selling residential mortgages. C&F Finance, acquired in September 2002, is a finance company purchasing automobile, marine and recreational vehicle (RV) loans through indirect lending programs. C&F Wealth Management, organized in April 1995, is a full-service brokerage firm offering a comprehensive range of wealth management services through third-party service providers. C&F Insurance and CVB Title were organized for the primary purpose of owning equity interests in an independent insurance agency and a full service title and settlement agency, respectively. Business segment data is presented in Note 10.
Basis of Presentation: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses and evaluation of goodwill for impairment. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of operations in these financial statements, have been made.
Reclassification: Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. None of these reclassifications are considered material.
Derivative Financial Instruments: The Corporation recognizes derivative financial instruments at fair value as either an other asset or other liability in the Consolidated Balance Sheets. The Corporation’s derivative financial instruments include (1) interest rate swaps that qualify and are designated as cash flow hedges on the Corporation’s trust preferred capital notes, (2) interest rate swaps with certain qualifying commercial loan customers and dealer counterparties and (3) interest rate contracts arising from mortgage banking activities, including interest rate lock commitments (IRLCs) on mortgage loans. The gain or loss on the Corporation’s cash flow hedges is reported as a component of other comprehensive income (loss), net of deferred income taxes, and reclassified into earnings in the same period(s) during which the hedged transactions affect earnings. IRLCs and interest rate swaps with loan customers and dealer counterparties are not designated as hedging instruments, and therefore changes in the fair value of these instruments are reported as noninterest income. The Corporation’s derivative financial instruments are described more fully in Note 12.
Recent Significant Accounting Pronouncements: In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures.” The amendments in ASU 2023-09 require that a public entity disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, the amount of income taxes paid disaggregated by federal, state and foreign taxes, and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or granter than five percent of total income taxes paid. The amendments also require that entities disclose income from continuing operations before income tax expense disaggregated between domestic and foreign, as well as income tax expense from continuing operations disaggregated by federal, state and foreign. The amendments apply to all public entities that are subject to Topic 740, “Income Taxes,” and are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The amendments are to be applied on a prospective basis; however, retrospective application is permitted. The Corporation does not expect the adoption of ASU 2023-09 to have a material effect on its consolidated financial statements.
In November 2024, FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures.” The amendments in ASU 2024-03 require disaggregated disclosure of income statement expenses for public business entities. Such disclosures must be made on an annual and interim basis in a tabular format in the footnotes to the financial statements. The amendments require companies to disclose disaggregated information about specific natural expense categories that are considered relevant and applicable, including (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) oil and gas activities. The amendments also provide clarification regarding identifying relevant expenses captions and requires disclosure of selling expenses on an annual and interim basis. Entities are required to apply the guidance in ASU 2024-03 consistently for all periods presented and is effective for all public business entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments are to be applied on a prospective basis; however, retrospective application is permitted. The Corporation does not expect the adoption of ASU 2024-03 to have a material effect on its consolidated financial statements.
Other accounting standards that have been issued by the FASB or other standards-setting bodies are not currently expected to have a material effect on the Corporation’s financial position, results of operations or cash flows.
9
NOTE 2: Securities
The Corporation’s debt securities, all of which are classified as available for sale, are summarized in the table below. The Corporation has elected to exclude accrued interest receivable, totaling $2.31 million and $2.32 million at March 31, 2025 and December 31, 2024, respectively, from the amortized cost basis of securities.
March 31, 2025
Gross
Amortized
Unrealized
Cost
Gains
Losses
Fair Value
U.S. Treasury securities
4,989
(220)
4,769
U.S. government agencies and corporations
68,773
(6,854)
61,919
210,999
583
(12,185)
199,397
Obligations of states and political subdivisions
147,256
548
(4,308)
143,496
Corporate and other debt securities
23,652
23
(1,743)
21,932
455,669
1,154
(25,310)
December 31, 2024
10,985
(285)
10,700
68,772
(8,113)
60,659
197,923
(15,556)
182,436
147,532
691
(4,613)
143,610
23,404
29
(2,213)
21,220
448,616
789
(30,780)
The amortized cost and estimated fair value of securities at March 31, 2025, by the earlier of contractual maturity or expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.
Due in one year or less
67,719
65,507
Due after one year through five years
179,812
169,117
Due after five years through ten years
138,031
129,762
Due after ten years
70,107
67,127
The following table presents the gross realized gains and losses on and the proceeds from the sales, maturities and calls of securities. During the three months ended March 31, 2025 and 2024, there were no sales of securities.
Realized gains from sales, maturities and calls of securities:
Gross realized gains
Gross realized losses
Net realized losses
Proceeds from sales, maturities, calls and paydowns of securities
10
The Corporation pledges securities primarily to secure municipal deposits, repurchase agreements and lines of credit that provide liquidity to the Corporation and C&F Bank. Securities with an aggregate amortized cost of $206.11 million and an aggregate fair value of $192.44 million were pledged at March 31, 2025. Securities with an aggregate amortized cost of $212.92 million and an aggregate fair value of $196.10 million were pledged at December 31, 2024.
Securities in an unrealized loss position at March 31, 2025, by duration of the period of the unrealized loss, are shown below.
Less Than 12 Months
12 Months or More
Fair
Value
Loss
220
6,854
34,422
457
118,296
11,728
152,718
12,185
32,175
600
62,499
3,708
94,674
4,308
488
12
19,671
1,731
20,159
1,743
67,085
1,069
267,154
24,241
334,239
25,310
There were 545 debt securities with a fair value below the amortized cost basis, totaling $334.24 million of aggregate fair value as of March 31, 2025. The Corporation concluded that a credit loss did not exist in its securities portfolio at March 31, 2025, and no allowance for credit losses has been recognized based on the fact that (1) changes in fair value were caused primarily by fluctuations in interest rates or other market factors, such as changes in demand, (2) securities with unrealized losses had generally high credit quality, (3) the Corporation intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Corporation will not be required to sell these investments before a recovery of its investment, and (4) issuers have continued to make timely payments of principal and interest. Additionally, the Corporation’s mortgage-backed securities are entirely issued by either U.S. government agencies or U.S. government-sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments.
Securities in an unrealized loss position at December 31, 2024, by duration of the period of the unrealized loss, are shown below.
285
8,113
53,734
1,253
123,307
14,303
177,041
15,556
31,981
412
66,743
4,201
98,724
4,613
474
19,717
2,187
20,191
2,213
86,189
1,691
281,126
29,089
367,315
30,780
The Corporation’s investment in restricted stock totaled $3.68 million at March 31, 2025 and $3.59 million at December 31, 2024 and consisted of Federal Home Loan Bank of Atlanta (FHLB) stock. Restricted stock is generally viewed as a long-term investment, which is carried at cost because there is no market for the stock other than to be redeemed or repurchased by the FHLB. Therefore, when evaluating restricted stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing any temporary decline in value. The Corporation did not consider its investment in restricted stock to be impaired at March 31, 2025 and no impairment has been recognized.
11
NOTE 3: Loans
The Corporation’s loans are stated at their face amount, net of deferred fees and costs and discounts, and consist of the classes of loans included in the table below. The Corporation has elected to exclude accrued interest receivable, totaling $8.28 million and $8.27 million at March 31, 2025 and December 31, 2024, respectively, from the recorded balance of loans.
Commercial real estate
758,310
734,182
Commercial business
106,844
104,947
Construction - commercial real estate
121,140
132,717
Land acquisition and development
46,042
46,072
Builder lines
42,720
35,605
Construction - consumer real estate
21,188
18,799
Residential mortgage
308,549
308,809
Equity lines
66,440
62,204
Other consumer
9,957
10,270
Consumer finance - automobiles
396,590
398,651
Consumer finance - marine and recreational vehicles
65,546
68,142
Subtotal
1,943,326
1,920,398
Less allowance for credit losses
(40,043)
(40,087)
Loans, net
Other consumer loans included $220,000 and $255,000 of demand deposit overdrafts at March 31, 2025 and December 31, 2024, respectively.
The following table shows the aging of the Corporation’s loan portfolio, by class, at March 31, 2025:
30-59
60-89
90+
90+ Days
Days
Past Due and
Past Due
Current1
Total Loans
Accruing
21
758,289
106,834
1,694
1,066
2,760
305,789
111
328
66,112
11,438
1,437
13,786
382,804
99
139
302
65,244
13,569
1,597
2,041
17,207
1,926,119
The table above includes nonaccrual loans that are current of $140,000, 30-59 days past due of $94,000, and 90+ days past due of $1.93 million.
The following table shows the aging of the Corporation’s loan portfolio, by class, at December 31, 2024:
734,156
104,918
747
18,052
1,012
1,076
426
2,514
306,295
334
85
76
161
62,043
10,261
14,703
2,650
599
17,952
380,699
215
22
15
252
67,890
16,826
3,748
1,116
21,690
1,898,708
410
The table above includes nonaccrual loans that are current of $124,000, 30-59 days past due of $117,000 and 90+ days past due of $706,000.
The following table shows the Corporation’s recorded balance of loans on nonaccrual status as of March 31, 2025 and December 31, 2024. The Corporation recognized $3,000 in interest income on loans on nonaccrual status as of March 31, 2025 and had $17,000 in reversals of interest income upon placing consumer loans on nonaccrual status during the three months ended March 31, 2025. All nonaccrual loans at March 31, 2025 and December 31, 2024 had an allowance for credit losses, with none individually evaluated.
1,189
333
2,164
947
Occasionally, the Corporation modifies loans to borrowers experiencing financial difficulties by providing principal forgiveness, term extensions, interest rate reductions or other-than-insignificant payment delays. As the effect of most modifications is already included in the allowance for credit losses due to the measurement methodologies used in its estimate, the allowance for credit losses is typically not adjusted upon modification. When principal forgiveness is provided at modification, the amount forgiven is charged against the allowance for credit losses. In some cases, the Corporation may provide multiple types of modifications on one loan and when multiple types of modifications occur within the same period, the combination of modifications is separately reported.
There were no loans to borrowers experiencing financial difficulty and that were modified during the three months ended March 31, 2025. The following table presents the amortized cost basis of loans as of March 31, 2024 that were both experiencing financial difficulty and modified during the three months ended March 31, 2024.
Three Months Ended March 31, 2024
% of Total
Class of
Loans
Term Extension
341
0.1
%
Total Term Extension
Combination Term Extension and Interest Rate Reduction
19
0.0
Total Combination Term Extension and Interest Rate Reduction
360
The following table presents the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty for the three months ended March 31, 2024.
Weighted-
Average
Interest Rate
Reduction
(in years)
1.51
6.9
The Corporation closely monitors the performance of modified loans to understand the effectiveness of its modification efforts. Upon the determination that all or a portion of a modified loan is uncollectible, that amount is charged against the allowance for credit losses. There were no payment defaults during the three months ended March 31, 2025 and 2024 of modified loans that were modified during the previous twelve months and all were current as of March 31, 2025.
14
NOTE 4: Allowance for Credit Losses
The Corporation conducts an analysis of the collectability of the loan portfolio on a regular basis and uses this analysis to assess the sufficiency of the allowance for credit losses on loans and to determine the necessary provision for credit losses. The Corporation segmented the loan portfolio into three loan portfolios based on common risk characteristics. The Commercial portfolio consists of commercial real estate loans, commercial business loans, commercial and consumer real estate construction loans, land acquisition and development loans, and builder lines. The Consumer portfolio consists of residential mortgage loans, equity lines, and other consumer loans. The Consumer Finance portfolio consists of automobile and marine and RV loans.
The following table shows the allowance for credit losses activity by loan portfolio for the three months ended March 31, 2025 and 2024:
Consumer
Commercial
Finance
Balance at December 31, 2024
13,347
4,032
22,708
40,087
Provision charged to operations
81
2,900
3,050
Loans charged off
(61)
(4,073)
(4,134)
Recoveries of loans previously charged off
997
1,040
Balance at March 31, 2025
13,425
4,086
22,532
40,043
Balance at December 31, 2023
12,315
3,758
23,578
39,651
535
65
3,600
(101)
(4,103)
(4,204)
53
1,091
1,153
Balance at March 31, 2024
12,859
3,775
23,566
40,200
The following table presents a breakdown of the provision for credit losses for the periods indicated.
Provision for credit losses:
Provision for loans
Provision for unfunded commitments
(50)
(100)
The table below details the recorded balance of the classes of loans within the commercial and consumer loan portfolios by loan rating, which is reviewed on a quarterly basis, and year of origination as of March 31, 2025:
Revolving
Term Loans Recorded Balance by Origination Year
Recorded
Converted
2023
2022
2021
Prior
Balance
to Term1
Commercial real estate:
Loan Rating
Pass
8,888
92,993
104,927
157,865
128,864
263,728
757,373
Special Mention
264,665
Commercial business:
4,272
8,185
12,143
14,374
13,565
30,153
24,088
Construction - commercial real estate:
1,494
52,162
35,566
25,693
6,225
Land acquisition and development:
36,537
352
1,321
7,832
Builder lines:
11,660
26,771
3,062
822
405
Construction - consumer real estate:
1,219
18,430
1,539
Residential mortgage:
7,950
48,261
56,758
78,656
37,674
77,426
306,725
227
465
Substandard
170
Substandard Nonaccrual
122
864
92
48,383
57,645
78,748
37,889
77,934
Equity lines:
679
65,308
370
66,357
83
453
Other consumer:
1,115
4,646
1,877
1,427
187
659
Total:
36,598
287,985
215,872
279,189
181,611
387,107
89,442
542
1,478,346
1,164
1,402
253
288,107
216,759
279,281
181,826
388,552
625
1,481,190
16
The table below details the recorded balance of the classes of loans within the commercial and consumer loan portfolios by loan rating, which is reviewed on a quarterly basis, and year of origination as of December 31, 2024:
2020
91,330
80,445
161,794
131,071
110,055
158,437
110
733,242
940
159,377
9,425
13,097
14,663
13,954
8,843
22,690
22,206
47,294
55,159
24,320
5,944
33,129
2,653
366
1,323
8,601
30,651
3,120
1,430
404
16,472
2,327
47,653
58,590
80,991
38,833
34,979
45,831
306,877
890
223
103
211
172
125
116
47,778
59,480
81,083
39,056
35,082
46,330
60
61,077
277
62,042
86
439
5,274
2,384
1,547
257
132
630
281,228
217,775
285,111
185,438
168,614
228,620
83,329
456
1,450,571
2,443
258
281,353
218,665
285,203
185,661
168,717
230,059
618
1,453,605
17
The table below details the recorded balance of the classes of loans within the consumer finance loan portfolio by credit rating at the time of origination and year of origination as of March 31, 2025:
to Term
Consumer finance - automobiles:
Credit rating1
Very good
5,000
20,311
9,061
7,018
1,991
371
43,752
Good
11,291
37,641
23,331
26,222
8,233
1,454
108,172
Fairly good
11,905
39,128
30,788
33,678
14,894
3,638
134,031
7,189
24,500
19,755
21,700
11,480
4,506
89,130
Marginal
1,280
4,790
3,972
4,865
4,214
21,505
36,665
126,370
86,907
93,483
40,812
12,353
Consumer finance - marine and recreational vehicles:
267
7,656
6,020
12,196
7,660
10,900
44,699
355
4,362
6,227
6,526
1,224
1,682
20,376
197
181
59
471
622
12,018
12,444
18,903
8,918
12,641
5,267
27,967
15,081
19,214
9,651
11,271
88,451
11,646
42,003
29,558
32,748
9,457
3,136
128,548
30,985
33,859
14,928
3,697
134,502
37,287
138,388
99,351
112,386
49,730
24,994
462,136
18
The table below details the recorded balance of the classes of loans within the consumer finance loan portfolio by credit rating at the time of origination and year of origination as of December 31, 2024:
22,161
10,039
7,971
2,359
43,033
40,296
25,730
29,455
9,402
1,574
106,791
41,881
34,058
37,486
16,935
3,213
1,602
135,175
25,796
21,278
24,379
13,260
3,674
2,194
90,581
5,049
4,383
5,621
4,856
1,681
1,481
23,071
135,183
95,488
104,912
46,812
10,568
5,688
8,124
6,283
12,670
8,003
7,927
3,754
46,761
4,515
6,426
6,832
1,326
1,178
20,902
200
12,639
12,909
19,685
9,364
9,132
4,413
30,285
16,322
20,641
10,362
8,353
3,831
89,794
44,811
32,156
36,287
10,728
2,752
959
127,693
34,258
37,669
16,970
3,240
1,636
135,654
147,822
108,397
124,597
56,176
19,700
10,101
466,793
The following table details the current period gross charge-offs of loans by year of origination for the three months ended March 31, 2025:
Current Period Gross Charge-offs by Origination Year
Other consumer1
55
593
1,004
1,616
587
196
3,996
52
51
603
1,017
1,668
597
198
4,134
The following table details the current period gross charge-offs of loans by year of origination for the three months ended March 31, 2024:
90
98
724
1,869
1,059
213
4,055
48
93
744
1,897
221
4,204
As of March 31, 2025 and December 31, 2024, the Corporation had no collateral dependent loans for which repayment was expected to be derived substantially through the operation or sale of the collateral and where the borrower is experiencing financial difficulty.
NOTE 5: Goodwill and Other Intangible Assets
The carrying amount of goodwill was $25.19 million at March 31, 2025 and December 31, 2024. There were no changes in the recorded balance of goodwill during the three months ended March 31, 2025 or 2024.
The Corporation had $1.08 million and $1.15 million of other intangible assets as of March 31, 2025 and December 31, 2024, respectively. Other intangible assets were recognized in connection with the core deposits acquired from Peoples Bankshares, Incorporated in 2020 and customer relationships acquired by C&F Wealth Management in 2016.
The following table summarizes the gross carrying amounts and accumulated amortization of other intangible assets:
Carrying
Amount
Amortization
Amortizable intangible assets:
Core deposit intangibles
1,711
(726)
(700)
Other amortizable intangibles
1,405
(1,306)
(1,269)
3,116
(2,032)
(1,969)
Amortization expense was $63,000 and $65,000 for the three months ended March 31, 2025 and 2024, respectively.
NOTE 6: Equity, Other Comprehensive Income and Earnings Per Share
Equity and Noncontrolling Interest
The Board of Directors authorized a program, effective January 1, 2025 through December 31, 2025, to repurchase up to $5.0 million of the Corporation’s common stock (the 2025 Repurchase Program). During the three months ended March 31, 2025, the Corporation did not repurchase any of its common stock under the 2025 Repurchase Program. As of March 31, 2025, there was $5.0 million remaining available for repurchases of the Corporation’s common stock under the 2025 Repurchase Program. The Corporation’s previous share repurchase program (the 2024 Repurchase Program), which
was authorized by the Board of Directors in December 2023, expired on December 31, 2024. Under the 2024 Repurchase Program, the Corporation repurchased $516,000 of its common stock during the three months ended March 31, 2024.
Additionally, during the three months ended March 31, 2025 and 2024, the Corporation withheld 5,357 shares and 9,151 shares of its common stock, respectively, from employees to satisfy tax withholding obligations upon vesting of restricted stock.
Noncontrolling interest represents an ownership interest in C&F Select LLC, a subsidiary of C&F Mortgage, held by an unrelated investor.
Accumulated Other Comprehensive Income (Loss), Net
Changes in each component of accumulated other comprehensive loss were as follows for the three months ended March 31, 2025 and 2024:
Securities
Defined
Cash
Available
Benefit
Flow
For Sale
Plan
Hedges
Accumulated other comprehensive (loss) income at December 31, 2024
(23,693)
(1,797)
Other comprehensive income (loss) arising during the period
5,835
(387)
5,448
Related income tax effects
(1,225)
100
(1,125)
(287)
4,323
Reclassifications into net income
(12)
(2)
(14)
(1)
(10)
Accumulated other comprehensive (loss) income at March 31, 2025
(19,083)
(1,806)
598
Accumulated other comprehensive (loss) income at December 31, 2023
(25,002)
(2,752)
1,067
Other comprehensive (loss) income arising during the period
(2,615)
106
(2,509)
549
(27)
522
79
(1,987)
(3)
Other comprehensive (loss) income, net of tax
Accumulated other comprehensive (loss) income at March 31, 2024
(27,068)
(2,745)
1,144
The following table provides information regarding reclassifications from accumulated other comprehensive loss into net income for the three months ended March 31, 2025 and 2024:
Line Item In the Consolidated
Statements of Income
Securities available for sale:
Reclassification of net realized losses into net income
Net losses on sales, maturities and calls of available for sale securities
Net of tax
Defined benefit plan:1
Reclassification of recognized net actuarial losses into net income
Noninterest expenses - Other
Amortization of prior service credit into net income
(7)
Cash flow hedges:
Amortization of hedging gains into net income
Interest expense - Trust preferred capital notes
Total reclassifications into net income
Earnings Per Share (EPS)
The components of the Corporation’s EPS calculations are as follows:
Weighted average shares outstanding—basic and diluted
3,234,935
3,370,934
The Corporation has applied the two-class method of computing basic and diluted EPS for each period presented because the Corporation’s unvested restricted shares outstanding contain rights to nonforfeitable dividends equal to dividends on the Corporation’s common stock. Accordingly, the weighted average number of shares used in the calculation of basic and diluted EPS includes both vested and unvested shares outstanding.
NOTE 7: Share-Based Plans
Under the 2022 Stock and Incentive Compensation Plan the Corporation is permitted to award, and previously under the 2013 Stock and Incentive Compensation Plan until April 19, 2022, the Corporation was permitted to award, shares of restricted stock to certain key employees, non-employee directors and consultants. Restricted shares awarded to employees generally vest over periods up to five years, and restricted shares awarded to non-employee directors generally vest over periods up to three years. A summary of the activity for restricted stock awards for the periods indicated is presented below:
Grant Date
Shares
Unvested, December 31, 2024
119,778
54.56
Granted
8,550
86.03
Vested
(12,810)
53.20
Forfeited
(1,710)
56.96
Unvested, March 31, 2025
113,808
57.04
Unvested, December 31, 2023
135,694
52.13
11,775
52.93
(26,096)
47.74
(135)
58.42
Unvested, March 31, 2024
121,238
53.15
The fair value of shares that vested during the three months ended March 31, 2025 and 2024 were $1.02 million and $1.46 million, respectively. Compensation is accounted for using the fair value of the Corporation’s common stock on the date the restricted shares are awarded. Compensation expense, net of forfeitures, is charged to income ratably over the required service periods and was $461,000 ($271,000 after income taxes) and $510,000 ($313,000 after income taxes) for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, there was $3.83 million of total unrecognized compensation cost related to restricted stock granted under the plans, which is expected to be recognized through 2029, with a weighted-average remaining service period of 2.9 years.
NOTE 8: Employee Benefit Plans
The following table summarizes the components of net periodic benefit cost for the Bank’s non-contributory cash balance pension plan.
Components of net periodic benefit cost:
Service cost, included in salaries and employee benefits
346
369
Other components of net periodic benefit cost:
Interest cost
218
189
Expected return on plan assets
(369)
(341)
Amortization of prior service credit
(17)
(18)
Recognized net actuarial losses
Other components of net periodic benefit cost, included in other noninterest expense
(163)
(143)
Net periodic benefit cost
NOTE 9: Fair Value of Assets and Liabilities
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. GAAP also establishes a fair value hierarchy which prioritizes the valuation inputs into three broad levels. Based on the underlying inputs, each fair value measurement in its entirety is reported in one of the three levels. These levels are:
GAAP allows an entity the irrevocable option to elect fair value (the fair value option) for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis. The Corporation has elected to use fair value accounting for its entire portfolio of loans held for sale (LHFS).
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following describes the valuation techniques and inputs used by the Corporation in determining the fair value of certain assets recorded at fair value on a recurring basis in the financial statements.
Securities available for sale. The Corporation primarily values its investment portfolio using Level 2 fair value measurements, but may also use Level 1 or Level 3 measurements if required by the composition of the portfolio. At March 31, 2025 and December 31, 2024, the Corporation’s entire securities portfolio was comprised of investments in
24
debt securities classified as available for sale, which were valued using Level 2 fair value measurements. The Corporation has contracted with third party portfolio accounting service vendors for valuation of its securities portfolio. The vendors’ sources for security valuation are ICE Data Services (ICE), LSEG, and Bloomberg Valuation Service (BVAL). Each source provides opinions, known as evaluated prices, as to the value of individual securities based on model-based pricing techniques that are partially based on available market data, including prices for similar instruments in active markets and prices for identical assets in markets that are not active. ICE provides evaluated prices for the Corporation’s obligations of states and political subdivisions category of securities. ICE uses proprietary pricing models and pricing systems, mathematical tools and judgment to determine an evaluated price for a security based upon a hierarchy of market information regarding that security or securities with similar characteristics. LSEG and BVAL provide evaluated prices for the Corporation’s U.S. treasury, government agencies and corporations, mortgage-backed, and corporate categories of securities. U.S. treasury securities and fixed-rate callable securities of U.S. government agencies and corporations are individually evaluated on an option adjusted spread basis for callable issues or on a nominal spread basis incorporating the term structure of agency market spreads and the appropriate risk free benchmark curve for non-callable issues. Pass-through mortgage-backed securities (MBS) in the mortgage-backed category are grouped into aggregate categories defined by issuer program, weighted average coupon, and weighted average maturity. Each aggregate is benchmarked to relative to-be-announced mortgage-backed securities (TBA securities) or other benchmark prices. TBA securities prices are obtained from market makers and live trading systems. Collateralized mortgage obligations in the mortgage-backed category are individually evaluated based upon a hierarchy of security specific information and market data regarding that security or securities with similar characteristics. Each evaluation is determined using an option adjusted spread and prepayment model based on volatility-driven, multi-dimensional spread tables. Fixed-rate securities issued by the Small Business Association in the mortgage-backed category are individually evaluated based upon a hierarchy of security specific information and market data regarding that security or securities with similar characteristics.
Other investments. The Corporation holds equity investments in funds that provide debt and equity financing to small businesses. These investments are recorded at fair value and included in other assets in the Consolidated Balance Sheets. Changes in fair value are recognized in net income. The funds are managed by investment companies, and the net asset value of each fund is reported regularly by the investment companies. At March 31, 2025 and December 31, 2024, the combined fair value of these investments was $1.70 million and $1.66 million, respectively. These investments, measured at net asset value, are not presented in the tables below related to fair value measurements. Changes in fair value of these investments resulted in the recognition of unrealized gains of $59,000 and $20,000 for the three months ended March 31, 2025 and 2024, respectively.
The Corporation also holds certain equity investments consisting of equity interests in an independent insurance agency and a full service title and settlement agency (collectively, the agencies). These investments are subject to contractual sale restrictions that only permit the sale of the investments back to the agencies themselves. At March 31, 2025 and December 31, 2024, the fair value of these investments was $3.98 million and $4.17 million, respectively. These investments are recorded at fair value based on the contractual redemption value of the Corporation’s proportionate share of the agencies’ equity. Changes in fair value are recognized in net income and resulted in the recognition of unrealized gains of $148,000 for each of the three months ended March 31, 2025 and 2024. The Corporation’s investments in these agencies are classified as Level 2.
Loans held for sale. Fair value of the Corporation’s LHFS is based on observable market prices for similar instruments traded in the secondary mortgage loan markets in which the Corporation conducts business. The Corporation’s portfolio of LHFS is classified as Level 2.
Derivative asset - IRLCs. The Corporation recognizes IRLCs at fair value. Fair value of IRLCs is based on either (i) the price of the underlying loans obtained from an investor for loans that will be delivered on a best efforts basis or (ii) the observable price for individual loans traded in the secondary market for loans that will be delivered on a mandatory basis. All of the Corporation’s IRLCs are classified as Level 2.
Derivative asset/liability – interest rate swaps on loans. The Corporation recognizes interest rate swaps at fair value. The Corporation has contracted with a third party vendor to provide valuations for these interest rate swaps using the discounted cash flow method. All of the Corporation’s interest rate swaps on loans are classified as Level 2.
25
Derivative asset/liability – cash flow hedges. The Corporation recognizes cash flow hedges at fair value. The Corporation has contracted with a third party vendor to provide valuations for these cash flow hedges using the discounted cash flow method. All of the Corporation’s cash flow hedges are classified as Level 2.
The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis. The fair value of forward sales of mortgage loans were not material to the consolidated financial statements of the Corporation at March 31, 2025 or December 31, 2024.
Fair Value Measurements Classified as
Assets/Liabilities at
Level 1
Level 2
Level 3
Assets:
Total securities available for sale
Loans held for sale
Other investments
3,976
Derivatives
IRLC
1,005
Interest rate swaps on loans
3,448
468,135
Liabilities:
3,580
4,167
585
4,636
1,169
449,294
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The Corporation may be required, from time to time, to measure and recognize certain assets at fair value on a nonrecurring basis in accordance with GAAP. The following describes the valuation techniques and inputs used by the Corporation in determining the fair value of certain assets recorded at fair value on a nonrecurring basis in the financial statements.
OREO. At March 31, 2025 and December 31, 2024, OREO was comprised of a property previously used by the Bank as a branch, which was consolidated into a nearby branch in 2024. OREO is held for sale and initially recorded at fair value less estimated costs to sell. Initial fair value is based upon appraisals the Corporation obtains from independent licensed appraisers or recent sales of similar properties and general market conditions. Subsequently, management periodically performs valuations of the assets based on updated appraisals, general market conditions, recent sales of similar properties, length of time the properties have been held, and our ability and intent with regard to continued ownership of the properties. The Corporation may incur additional write-downs of OREO to fair value less estimated costs to sell if valuations indicate a further deterioration in market conditions. As such, the Corporation records OREO as a nonrecurring fair value measurement classified as Level 3.
The following tables present the balances of assets measured at fair value on a nonrecurring basis at March 31, 2025 and December 31, 2024.
Assets at Fair
Other real estate owned, net
Fair Value of Financial Instruments
FASB ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments, including those financial assets and financial liabilities that are not required to be measured and reported at fair value on a recurring or nonrecurring basis. ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Corporation. The Corporation uses the exit price notion in calculating the fair values of financial instruments not measured at fair value on a recurring basis.
The following tables reflect the carrying amounts and estimated fair values of the Corporation’s financial instruments whether or not recognized on the Consolidated Balance Sheets at fair value.
Fair Value Measurements at March 31, 2025 Classified as
Total Fair
Financial assets:
Cash and short-term investments
77,229
1,271
1,877,069
Financial liabilities:
Demand and savings deposits
1,389,087
827,464
111,367
102,710
28
Fair Value Measurements at December 31, 2024 Classified as
66,853
1,265
66,851
1,838,887
1,352,531
819,276
114,440
105,533
NOTE 10: Business Segments
The Corporation operates in a decentralized fashion in three business segments: community banking, mortgage banking and consumer finance. The community banking segment comprises C&F Bank, C&F Wealth Management, C&F Insurance and CVB Title. Revenues from community banking operations consist primarily of net interest income related to investments in loans and securities and outstanding deposits and borrowings, fees earned on deposit accounts, debit card interchange activity, and net revenues from offering wealth management services through third-party service providers. Through C&F Mortgage, mortgage banking operating revenues consist principally of gains on sales of loans in the secondary market, mortgage banking fee income related to loan originations, fees earned by providing mortgage loan origination functions to third-party lenders, and net interest income on mortgage loans held for sale. Revenues from consumer finance operations through C&F Finance consist primarily of net interest income earned on purchased retail installment sales contracts.
The standalone Corporation’s revenues and expenses are comprised primarily of interest expense associated with the Corporation’s trust preferred capital notes and subordinated debt, general corporate expenses, and changes in the value of investments held in the rabbi trust and the deferred compensation liability related to its nonqualified deferred compensation plan. The results of the Corporation, which includes funding and operating costs that are not allocated to the business segments, are included in the column labeled “Other” in the tables below.
The Corporation’s chief operating decision makers (CODMs) are the President/Chief Executive Officer and the Chief Financial Officer. The CODMs use net income to evaluate income generated from segment assets in deciding whether to reinvest profits into the segments or into other parts of the entity, such as for acquisitions or to pay dividends. Net income is used to monitor budget versus actual results. The CODMs also use net income in competitive analysis by benchmarking to the Corporation’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segments and in establishing management’s compensation.
Interest expense is allocated to the mortgage banking and consumer finance segments through borrowings from the community banking segment. The community banking segment extends two warehouse lines of credit to the mortgage banking segment, providing a portion of the funds needed to originate mortgage loans, that carry interest rates at the daily FHLB advance rate plus a spread ranging from 50 basis points to 175 basis points. The community banking segment also provides the consumer finance segment with a portion of the funds needed to purchase loan contracts by means of a variable
rate line of credit that carries interest at one-month term SOFR plus 211.5 basis points, with a floor of 3.5 percent and a ceiling of 6.0 percent, and fixed rate notes that carry interest at rates ranging from 3.8 percent to 4.0 percent. The community banking segment acquires certain residential real estate loans from the mortgage banking segment at prices similar to those paid by third-party investors. These transactions are eliminated to reach consolidated totals. In addition to unallocated expenses recorded by the holding company, certain overhead costs are incurred by the community banking segment and are not allocated to the mortgage banking and consumer finance segments.
Three Months Ended March 31, 2025
Community
Mortgage
Banking
Eliminations
Consolidated
23,384
339
12,123
142
10,381
Net interest income before allocation
13,003
(597)
Net interest allocation1
5,754
(72)
(5,682)
18,757
6,441
Gain on sales of loans
1,985
(138)
Other noninterest income
4,230
1,136
177
222
(39)
5,726
Net revenue
22,987
3,388
6,618
(375)
(35)
32,583
9,279
1,792
1,977
435
Occupancy expense
1,830
150
2,342
290
91
80
416
30
384
140
42
230
411
Provision for indemnifications
Other segment items2
1,215
436
107
1,918
Total noninterest expense
16,232
2,809
3,405
Income (loss) before taxes
6,655
579
313
(1,005)
Income tax expense (benefit)
1,210
148
87
(312)
(4)
Net income (loss)
5,445
431
(693)
Other data:
Capital expenditures
236
31
875
33
20,322
281
12,025
9,005
545
11,317
(545)
5,847
(44)
(5,803)
17,164
237
6,222
(193)
4,110
1,048
255
840
(49)
6,204
21,274
2,766
6,477
295
(162)
30,650
500
9,443
1,599
2,144
232
157
2,231
240
340
709
337
39
1,354
105
383
134
(16)
1,960
15,916
2,373
3,560
1,317
4,858
393
(83)
(1,022)
(146)
846
(20)
(328)
(32)
4,012
294
(694)
(114)
293
485
838
At March 31, 2025:
2,499,614
35,467
468,437
29,809
(420,797)
Total loans held for investment, net
1,463,679
439,604
Total loans held for sale
28,089
(811)
2,229,805
(13,151)
At December 31, 2024:
2,449,641
29,837
472,672
31,823
(420,599)
1,436,226
444,085
21,906
(1,794)
2,186,139
(15,279)
NOTE 11: Commitments and Contingent Liabilities
The Corporation enters into commitments to extend credit in the normal course of business to meet the financing needs of its customers, including loan commitments and standby letters of credit. These instruments involve elements of credit and interest rate risk in excess of the amounts recorded on the Consolidated Balance Sheets. The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit written is represented by the contractual amount of these instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. Collateral is obtained based on management’s credit assessment of the customer.
Loan commitments are agreements to extend credit to a customer provided that there are no violations of the terms of the contract prior to funding. Commitments have fixed expiration dates or other termination clauses and may require payment of a fee by the customer. Because many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of loan commitments at the Bank was $469.85 million at March 31, 2025 and $469.77 million at December 31, 2024, which does not include IRLCs at the mortgage banking segment, which are discussed in Note 12. Off balance sheet credit exposures, including loan commitments, are not recorded on balance sheet, but expected credit losses arising from off balance sheet credit exposures are recorded as a reserve for unfunded commitments and reported in Other Liabilities. The following table presents the Corporation’s reserve for unfunded commitments for the periods indicated.
Balance at the beginning of period
1,800
1,650
Balance at the end of period
1,750
1,550
Standby letters of credit are written conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The total contract amount of standby letters of credit, whose contract amounts represent credit risk, was $18.54 million at March 31, 2025 and $18.79 million at December 31, 2024.
The mortgage banking segment sells the majority of the residential mortgage loans it originates to third-party investors. Additionally, the community banking segment purchases residential mortgage loans from the mortgage banking segment under terms and conditions similar to third-party investors. As is customary in the industry, the agreements with these investors require the mortgage banking segment to extend representations and warranties with respect to program compliance, borrower misrepresentation, fraud, and early payment performance. Under the agreements, the investors are entitled to make loss claims and repurchase requests of the mortgage banking segment for loans that contain covered deficiencies. The mortgage banking segment has obtained early payment default recourse waivers for a portion of its business. Recourse periods for early payment default for the remaining investors vary from 90 days up to one year. Recourse periods for borrower misrepresentation or fraud, or underwriting error do not have a stated time limit. The mortgage banking segment maintains an allowance for indemnifications that represents management’s estimate of losses that are probable of arising under these recourse provisions. As performance data for loans that have been sold is not made available to the mortgage banking segment by the investors, the estimate of potential losses is inherently subjective and is based on historical indemnification payments and management’s assessment of current conditions that may contribute to indemnified losses on mortgage loans that have been sold in the secondary market. For the three months ended March 31, 2025, the Corporation recorded a net reversal of provision for indemnifications of $25,000 compared to a net reversal of provision for indemnifications of $140,000 for the three months ended March 31, 2024, which is included in “Noninterest Expenses – Other” on the Consolidated Statements of Income. No indemnification payments were made
32
during the three months ended March 31, 2025 and 2024. The allowance for indemnifications was $1.32 million and $1.35 million at March 31, 2025 and December 31, 2024, respectively.
NOTE 12: Derivative Financial Instruments
The Corporation uses derivative financial instruments primarily to manage risks to the Corporation associated with changing interest rates, and to assist customers with their risk management objectives. The Corporation designates certain interest rate swaps as hedging instruments in qualifying cash flow hedges. The changes in fair value of these designated hedging instruments is reported as a component of other comprehensive income (loss). Derivative contracts that are not designated in a qualifying hedging relationship include customer accommodation loan swaps and contracts related to mortgage banking activities.
Cash flow hedges. The Corporation designates interest rate swaps as cash flow hedges when they are used to manage exposure to variability in cash flows on variable rate borrowings such as the Corporation’s trust preferred capital notes. These interest rate swaps are derivative financial instruments that manage the risk of variability in cash flows by exchanging variable-rate interest payments on a notional amount of the Corporation’s borrowings for fixed-rate interest payments. Interest rate swaps designated as cash flow hedges are expected to be highly effective in offsetting the effect of changes in interest rates on the amount of variable-rate interest payments, and the Corporation assesses the effectiveness of each hedging relationship quarterly. If the Corporation determines that a cash flow hedge is no longer highly effective, future changes in the fair value of the hedging instrument would be reported in earnings. As of March 31, 2025, the Corporation has designated cash flow hedges to manage its exposure to variability in cash flows on certain variable rate borrowings for periods that end between June 2026 and June 2029.
All interest rate swaps were entered into with counterparties that met the Corporation’s credit standards and the agreements contain collateral provisions protecting the at-risk party. The Corporation believes that the credit risk inherent in these derivative contracts is not significant.
These cash flow hedges are reported at fair value in “other assets” in the Consolidated Balance Sheets. Unrealized gains or losses recorded in other comprehensive income (loss) related to cash flow hedges are reclassified into earnings in the same period(s) during which the hedged interest payments affect earnings. When a designated hedging instrument is terminated and the hedged interest payments remain probable of occurring, any remaining unrecognized gain or loss in other comprehensive income (loss) is reclassified into earnings in the period(s) during which the forecasted interest payments affect earnings. Amounts reclassified into earnings and interest receivable or payable under designated interest rate swaps are reported in interest expense. The Corporation does not expect any unrealized losses related to cash flow hedges to be reclassified into earnings in the next twelve months. Refer to Note 6 for additional information on amounts reclassified into net income related to these cash flow hedges.
Loan swaps. The Bank also enters into interest rate swaps with certain qualifying commercial loan customers to meet their interest rate risk management needs. The Bank simultaneously enters into interest rate swaps with dealer counterparties, with identical notional amounts and offsetting terms. The net result of these interest rate swaps is that the customer pays a fixed rate of interest and the Corporation receives a floating rate. These back-to-back loan swaps are derivative financial instruments and are reported at fair value in “other assets” and “other liabilities” in the Consolidated Balance Sheets. Changes in the fair value of loan swaps are recorded in other noninterest income and sum to zero because of the offsetting terms of swaps with borrowers and swaps with dealer counterparties.
Mortgage banking. The mortgage banking segment enters into IRLCs with customers to originate loans for which the interest rates are determined (or “locked”) prior to funding. The mortgage banking segment is exposed to interest rate risk through fixed-rate IRLCs and mortgage loans from the time that interest rates are locked until the loans are sold in the secondary market. The mortgage banking segment mitigates this interest rate risk by entering into forward sales contracts with investors, which at times includes the community banking segment, at the time that interest rates are locked for mortgage loans to be delivered on a best efforts basis. IRLCs are derivative financial instruments and are reported at fair value in other assets and other liabilities in the Consolidated Balance Sheets, along with the changes in fair value of the related forward sales of loans. Changes in the fair value of mortgage banking derivatives are recorded as a component of gains on sales of loans.
At March 31, 2025, the mortgage banking segment had $71.78 million of IRLCs and $27.28 million of unpaid principal on mortgage loans held for sale for which it managed interest rate risk using best-efforts forward sales contracts for $99.06 million in mortgage loans.
At December 31, 2024, the mortgage banking segment had $39.29 million of IRLCs and $20.11 million of unpaid principal on mortgage loans held for sale for which it managed interest rate risk using best-efforts forward sales contracts for $59.40 million in mortgage loans.
The following tables summarize key elements of the Corporation’s derivative instruments.
Notional
Interest rate swap contracts
25,000
Not designated as hedges:
Customer-related interest rate swap contracts:
Matched interest rate swaps with borrower
77,373
Matched interest rate swaps with counterparty
Mortgage banking contracts:
IRLCs
71,779
77,820
39,291
The Corporation and the Bank are required to maintain cash collateral with dealer counterparties for interest rate swap relationships in a loss position. At both March 31, 2025 and December 31, 2024, there was no cash collateral maintained with dealer counterparties.
NOTE 13: Other Noninterest Expenses
The following table presents the significant components in the Consolidated Statements of Income line “Noninterest Expenses-Other.”
Telecommunication expenses
391
Licenses and taxes expense
305
Travel and educational expenses
266
Postage and courier expenses
260
265
Other components of net periodic pension cost
All other noninterest expenses
879
922
Total other noninterest expenses
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion supplements and provides information about the major components of the results of operations, financial condition, liquidity and capital resources of the Corporation. This discussion and analysis should be read in conjunction with the accompanying consolidated financial statements. In addition to current and historical information, the following discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our future business, financial condition or results of operations. For a description of certain factors that may have a significant impact on our future business, financial condition or results of operations, see “Cautionary Statement About Forward-Looking Statements” at the end of this discussion and analysis.
OVERVIEW
Our primary financial goals are to maximize the Corporation’s earnings and to deploy capital in profitable growth initiatives that will enhance long-term shareholder value. We track three primary financial performance measures in order to assess the level of success in achieving these goals: (1) return on average assets (ROA), (2) return on average equity (ROE), and (3) growth in earnings. In addition to these financial performance measures, we track the performance of the Corporation’s three business segments: community banking, mortgage banking, and consumer finance. We balance these financial measures with acceptable levels of interest rate risk, while satisfying liquidity and capital requirements and monitoring asset quality. We also actively manage our capital through growth, dividends and share repurchases, while considering the need to maintain a strong capital position. The following table presents selected financial performance highlights for the periods indicated:
TABLE 1: Financial Performance Highlights
(Dollars in thousands, except for per share data)
Net Income (Loss):
Community Banking
Mortgage Banking
Consumer Finance
(707)
(808)
Consolidated net income
Earnings per share - basic and diluted
Annualized return on average equity
9.35
6.33
Annualized return on average assets
0.84
0.57
Annualized return on average tangible common equity (ROTCE)1
10.65
7.30
Refer to “Use of Certain Non-GAAP Financial Measures,” below, for information about these non-GAAP financial measures, including a quantitative reconciliation to the most directly comparable financial measures calculated in accordance with GAAP.
Consolidated net income increased $2.0 million for the first quarter of 2025 compared to the same period in 2024 due to higher net income at all business segments, primarily the community banking segment. A discussion of the performance of our business segments is included under the heading “Business Segments” in the “Results of Operations” section of this discussion and analysis.
Key factors affecting comparison for the first quarter of 2025 are as follows.
Capital Management and Dividends
Total equity was $235.3 million at March 31, 2025, compared to $227.0 million at December 31, 2024. Under regulatory capital standards, the Corporation’s tier 1 risk-based capital and total risk-based capital ratios at March 31, 2025 and December 31, 2024 were 11.9 percent and 14.1 percent, respectively. At March 31, 2025, the book value per share of the Corporation’s common stock was $72.51 and tangible book value per share, which is a non-GAAP financial measure, was $64.39, compared to $70.00 and $61.86, respectively, at December 31, 2024.
Total equity increased $8.3 million at March 31, 2025 compared to December 31, 2024, due primarily to net income and lower unrealized losses in the market value of securities available for sale, which are recognized as a component of other comprehensive income, partially offset by dividends paid on the Corporation’s common stock. The Corporation’s securities available for sale are fixed income debt securities and their net unrealized loss position is a result of increased market interest rates since they were purchased. The Corporation expects to recover its investments in debt securities through scheduled payments of principal and interest. 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, net of deferred income taxes, decreased to $19.1 million at March 31, 2025, compared to $23.7 million at December 31, 2024 due primarily to fluctuations in debt security market interest rates and a decrease in the balance of securities available for sale in an unrealized loss position as a result of maturities, calls and paydowns.
The Corporation’s Board of Directors declared a quarterly cash dividend of 46 cents per share during the first quarter of 2025, which was paid on April 1, 2025. This dividend represents a payout ratio of 27.7 percent of earnings per share for the first quarter of 2025. 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 levels and requirements and expected future earnings. In making its decision on the payment of dividends on the Corporation’s common stock, the Corporation’s Board of Directors considers operating results, financial condition, capital adequacy, regulatory requirements, shareholder returns, growth expectations and other factors.
The Corporation has a share repurchase program that was authorized by the Board of Directors to repurchase up to $5.0 million of the Corporation’s common stock, effective January 1, 2025 through December 31, 2025. During the first quarter of 2025, the Corporation did not make any repurchases of its common stock under this share repurchase program.
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements requires us to make estimates and assumptions. Those accounting policies with the greatest uncertainty and that require management’s most difficult, subjective or complex judgments affecting the application of these policies, and the greatest likelihood that materially different amounts would be reported under different conditions, or using different assumptions, are described below.
Allowance for Credit Losses: We establish the allowance for credit losses through charges to earnings in the form of a provision for credit losses. Loan losses are charged against the allowance for credit losses for the difference between the carrying value of the loan and the estimated net realizable value or fair value of the collateral, if collateral dependent, when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. The allowance represents management’s current estimate of expected credit losses over the contractual term of loans held for investment, and is recorded at an amount that, in management’s judgment, reduces the recorded investment in loans to the net amount expected to be collected. Management’s judgment in determining the level of the allowance is based on evaluations of historical loan losses, current conditions and reasonable and supportable forecasts relevant to the collectability of loans. The measurement of the allowance for credit losses on commercial and consumer loans is based in part on forecasts of the national unemployment rate, which we believe to be indicative of risk factors related to the collectability of commercial and consumer loans. In addition, management’s estimate of expected credit losses is based on the remaining life of loans held for investment, and changes in expected prepayment behavior may result in changes in the remaining life of loans and expected credit losses. Management also assesses the risk of credit losses arising from changes in general market, economic and business conditions; the nature and volume of the loan portfolio; the volume and severity of delinquencies and adversely classified loan balances and the value of underlying collateral in determining the recorded balance of the allowance for credit losses. This evaluation is inherently subjective because it requires estimates that are susceptible to significant revision as more information becomes available. In evaluating the level of the allowance, we consider a range of possible assumptions and outcomes related to the various factors identified above. The level of the allowance is particularly sensitive to changes in the actual and forecasted national unemployment rate and changes in current conditions or reasonably expected future conditions affecting the collectability of loans.
Goodwill: The Corporation’s goodwill was recognized in connection with past business combinations and is reported at the community banking segment and the consumer finance segment. The Corporation reviews the carrying value of goodwill at least annually or more frequently if certain impairment indicators exist. In testing goodwill for impairment, the Corporation may first consider qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, we conclude that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then no further testing is required and the goodwill of the reporting unit is not impaired. If the Corporation elects to bypass the qualitative assessment or if we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the fair value of the reporting unit is compared with its carrying value to determine whether an impairment exists. In the last evaluation of goodwill at the community banking segment and the consumer finance segment, which was the annual evaluation in the fourth quarter of 2024, the Corporation concluded that no impairment existed based on an assessment of qualitative factors.
For further information concerning accounting policies, refer to Item 8. “Financial Statements and Supplementary Data,” under the heading “Note 1: Summary of Significant Accounting Policies” in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024.
37
RESULTS OF OPERATIONS
NET INTEREST INCOME
The following table shows the average balance sheets, the amounts of interest earned on earning assets, with related yields, and interest expense on interest-bearing liabilities, with related rates, for the three months ended March 31, 2025 and 2024. Interest on tax-exempt loans and securities is presented on a taxable-equivalent basis (which converts the income on loans and investments for which no income taxes are paid to the equivalent yield as if income taxes were paid) using the federal corporate income tax rate of 21 percent that was applicable for all periods presented. Average balances of securities available for sale are included at amortized cost. Loans include loans held for sale. Loans placed on a nonaccrual status are included in the balances and are included in the computation of yields, but had no material effect.
TABLE 2: Average Balances, Income and Expense, Yields and Rates
Income/
Yield/
Expense
Rate
Securities:
Taxable
339,450
2.58
365,244
1,980
2.17
Tax-exempt
119,033
3.87
120,920
1,118
3.70
Total securities
458,483
3,346
2.92
486,164
3,098
2.55
Loans:
Community banking segment
1,467,555
19,966
5.52
1,302,260
17,331
5.35
Mortgage banking segment
20,968
6.56
17,700
6.39
Consumer finance segment
465,526
10.56
473,848
12,024
10.21
Total loans
1,954,049
32,428
6.73
1,793,808
29,636
6.64
55,830
3.65
28,417
3.67
Total earning assets
2,468,362
36,276
5.95
2,308,389
32,993
5.75
Allowance for credit losses
(40,605)
(40,292)
Total non-earning assets
154,554
156,800
2,582,311
2,424,897
Liabilities and Equity
Interest-bearing deposits:
Interest-bearing demand deposits
332,341
0.67
335,570
553
0.66
Savings and money market deposit accounts
489,217
1,205
1.00
484,645
1,061
0.88
821,949
3.93
705,167
3.94
Total interest-bearing deposits
1,643,507
9,769
2.40
1,525,382
8,530
2.25
Borrowings:
Repurchase agreements
28,192
112
1.59
27,997
Other borrowings
93,597
1,097
4.69
78,445
909
4.64
Total borrowings
121,789
1,209
3.97
106,442
1,020
3.83
Total interest-bearing liabilities
1,765,296
2.51
1,631,824
2.35
545,346
531,885
40,874
44,125
2,351,516
2,207,834
230,795
217,063
25,298
23,443
Interest rate spread
3.44
3.40
Interest expense to average earning assets
1.79
Net interest margin
4.16
4.09
Interest income and expense are affected by fluctuations in interest rates, by changes in the volume of earning assets and interest-bearing liabilities, and by the interaction of rate and volume factors. The following table shows the direct causes of the period-to-period changes in the components of net interest income on a taxable-equivalent basis. The Corporation calculates the rate and volume variances using a formula prescribed by the SEC. Rate/volume variances, the third element
38
in the calculation, are not shown separately in the table, but are allocated to the rate and volume variances in proportion to the absolute dollar amounts of each.
TABLE 3: Rate-Volume Recap
Three Months Ended March 31, 2025 from 2024
Increase (Decrease)
Due to
Increase
Volume
(Decrease)
Interest income:
528
2,107
2,635
58
343
(244)
359
244
243
1,995
3,283
Interest expense:
47
135
144
152
1,087
1,239
178
188
162
1,266
1,428
Change in net interest income
1,126
729
1,855
Net interest income, on a taxable-equivalent basis, for the first quarter of 2025 increased to $25.3 million, compared to $23.4 million for the first quarter of 2024, due primarily to an increase in net interest margin and higher average balances of earning assets. Annualized net interest margin increased 7 basis points to 4.16 percent for the first quarter of 2025 compared to the same period of 2024, due primarily to a change in the mix of earning assets and higher yields on earning assets, partially offset by an increase in costs of interest-bearing deposits. The Federal Reserve Bank (FRB) target federal funds interest rate was at an upper limit of 5.50 percent at December 31, 2023 until the FRB began decreasing it in September 2024, decreasing it to 4.50 percent by December 31, 2024, where it remained during the first quarter of 2025. The yield on interest-earning assets increased by 20 basis points for the first quarter of 2025 compared to the same period in 2024. The cost of interest-bearing liabilities increased by 16 basis points for the first quarter of 2025 compared to the same period of 2024. Average earning assets increased $160.0 million for the first quarter of 2025 compared to the same period in 2024. Average interest-bearing liabilities increased $133.5 million for the first quarter of 2025 compared to the same period in 2024. Average noninterest-bearing demand deposits increased $13.5 million for the first quarter of 2025 compared to the same period in 2024.
Average loans, which includes both loans held for investment and loans held for sale, increased $160.2 million to $1.95 billion for the first quarter of 2025 compared to the same period in 2024. Average loans at the community banking segment increased $165.3 million, or 12.7 percent, for the first quarter of 2025, compared to the same period in 2024, due primarily to growth in the construction, commercial real estate, land acquisition and development and builder lines segments of the loan portfolio. Average loans at the consumer finance segment decreased $8.3 million, or 1.8 percent, for the first quarter of 2025, compared to the same period in 2024, due primarily to lower average balances of automobile loans. Average loans at the mortgage banking segment, which consist of loans held for sale, increased $3.3 million, or 18.5 percent, for the first quarter of 2025 compared to the same period in 2024.
The community banking segment average loan yield increased 17 basis points to 5.52 percent for the first quarter of 2025 compared to the same period in 2024, due primarily to a shift in the mix of the loan portfolio to higher yielding loans and renewals of fixed rate loans originated during periods of lower interest rates. The consumer finance segment average loan yield increased 35 basis points to 10.56 percent for the first quarter of 2025, compared to the same period in 2024, due primarily to the effects of the overall higher interest rate environment. The mortgage banking segment average loan yield
increased 17 basis points to 6.56 percent for the first quarter of 2025, compared to the same period in 2024, due to fluctuations in mortgage interest rates.
Average securities available for sale decreased $27.7 million to $458.5 million for the first quarter of 2025, compared to the same period in 2024, due primarily to maturities, calls and paydowns outpacing purchases in the portfolio. The average yield on the securities portfolio on a taxable-equivalent basis increased 37 basis points to 2.92 percent for the first quarter of 2025 compared to the same period in 2024, due primarily to purchases of securities in the overall higher interest rate environment and maturities of lower-yielding securities.
Average interest-bearing deposits in other banks, consisting primarily of excess cash reserves maintained at the FRB, increased $27.4 million to $55.8 million for the first quarter of 2025 compared to the same period of 2024. The average yield on interest-bearing deposits in other banks decreased 2 basis points for the first quarter of 2025, compared to the same period in 2024, due to the decrease in the federal funds interest rate, partially offset by the impacts of the timing of cash items in process, which don’t earn interest until they settle and have a larger effect on yields during periods of lower average balances.
Average savings and money market and interest-bearing demand deposits combined increased $1.3 million to $821.5 million for the first quarter of 2025, compared to the same period in 2024. Average non-interest-bearing demand deposits increased $13.5 million to $545.3 million for the first quarter of 2025 compared to the same period in 2024. Average time deposits increased $116.8 million to $821.9 million for the first quarter of 2025 compared to the same period in 2024. The average cost of interest-bearing deposits increased 15 basis points to 2.40 percent for the first quarter of 2025, compared to the same period in 2024, due primarily to a shift in composition towards time deposits amid the overall higher interest rate environment and increased competition for deposits.
Average borrowings increased $15.3 million to $121.8 million for the first quarter of 2025, compared to the same period in 2024, due primarily to fluctuations in repurchase agreements and Federal Home Loan Bank of Atlanta (FHLB) advances. The average cost of borrowings increased 14 basis points for the first quarter of 2025, compared to the same period in 2024, due primarily to a shift in the mix of borrowings.
The Corporation believes that the effects of declining market interest rates, if continued during 2025, could adversely affect its net interest margin in the short term as its assets typically reprice downward more quickly than its deposits and borrowings. The Corporation also believes any such adverse impacts could be somewhat mitigated by renewals of fixed rate loans originated during periods of lower interest rates and purchases of securities available for sale in the overall higher interest rate environment. The interest rate environment has grown increasingly uncertain during 2025 and the ultimate effect of these factors on the Corporation’s net interest margin will also depend on other factors, including the Corporation’s ability to grow loans at the community banking and consumer finance segments, to compete for deposits, and the extent of its reliance on borrowings. The Corporation gives no assurance as to the timing or extent of changes in market interest rates or the impact of those changes or any other factor on the Corporation's ability to compete for loans and deposits or on its net interest margin. If market interest rates were to rise, net interest margin could be positively affected in the short term as the Corporation generally expects its assets to reprice upward more quickly than its deposits and borrowings.
40
Noninterest Income
TABLE 4: Noninterest Income
Unrealized gain (loss) on investments held in rabbi trust
Other income, net
507
566
Total noninterest income increased $81,000, or 1.1 percent, for the first quarter of 2025, compared to the same period of 2024, due primarily to higher volume of mortgage loan production which resulted in higher gains on sales of loans and higher mortgage banking fee income, and higher other service charges, partially offset by fluctuations in unrealized gains and losses on investments held in the rabbi trust.
The Corporation uses a rabbi trust to fund liabilities under its nonqualified deferred compensation plan. Unrealized gains and losses on investments held in the Corporation’s rabbi trust are offset by changes in deferred compensation liabilities, recorded in salaries and employee benefits expense.
Noninterest Expense
TABLE 5: Noninterest Expense
Salaries and employee benefits:
Compensation, payroll taxes and employee benefits
13,272
13,412
Increase in nonqualified deferred compensation plan liabilities
Total salaries and employee benefits
Other expenses:
Total noninterest expenses decreased $91,000, or less than one percent, in the first quarter of 2025, compared to the same period in 2024, due primarily to fluctuations in deferred compensation liabilities and lower compensation, payroll taxes and employee benefits due primarily to a reduction in headcount through attrition, partially offset by higher marketing and
41
advertising expenses related to the strategic marketing initiative that began in the second half of 2024 and a lower net reversal of provision for indemnifications.
Changes in deferred compensation liabilities are offset by unrealized gains and losses on investments held in the Corporation’s rabbi trust and are recorded in noninterest income.
Income Taxes
The Corporation’s consolidated effective income tax rate was 17.3 percent for the first quarter of 2025, an increase compared to 14.1 percent for the same period in 2024 due primarily to a lower share of income at the community banking segment, which is primarily not subject to state income taxes.
Business Segments
The Corporation operates in a decentralized manner in three business segments: community banking, mortgage banking and consumer finance. An overview of the financial results for each of the Corporation’s business segments is presented below.
Community Banking: The community banking segment comprises C&F Bank, C&F Wealth Management, C&F Insurance and CVB Title. The following table presents the community banking segment operating results for the periods indicated.
TABLE 6: Community Banking Segment Operating Results
18,657
16,664
Noninterest income:
1,007
497
312
280
Noninterest expense:
Other expenses
The community banking segment reported net income of $5.4 million for the first quarter of 2025, compared to $4.0 million for the same period in 2024. The increase in community banking segment net income was due primarily to:
partially offset by:
43
Net interest income for the community banking segment increased by $1.6 million to $18.8 million for the first quarter of 2025, compared to the same period in 2024 due primarily to higher average balances of earning assets and an increase in net interest margin. Average interest-earning asset yields were higher for the first quarter of 2025, compared to the same period of 2024, due primarily to a shift in the mix of the loan portfolio to higher yielding loans, renewals of fixed rate loans originated during periods of lower interest rates, purchases of securities in the overall higher interest rate environment and maturities of lower-yielding securities. This increase was partially offset by an increase in the average costs of interest-bearing deposits for the first quarter of 2025, compared to the same period of 2024, due primarily to the continued effects of a shift in the mix of deposits with customers seeking higher yielding opportunities as a result of higher interest rates paid on time deposits. Interest income allocated to the community banking segment includes interest income on loans to the consumer finance and mortgage banking segments. These transactions are eliminated to reach consolidated totals.
The community banking segment recorded $100,000 in provision for credit losses for the first quarter of 2025, compared to $500,000 for the same period of 2024, due primarily to lower loan growth. Noninterest income increased for the first quarter of 2025, compared to the same period in 2024, due primarily to higher other service charges and fees and higher investment income from other equity interests, partially offset by lower service charges on deposit accounts. Noninterest expenses increased for the first quarter of 2025, compared to the same period in 2024, due primarily to higher marketing and advertising expenses and data processing, partially offset by lower salaries and employee benefits .
Mortgage Banking: The following table presents the mortgage banking operating results for the periods indicated.
TABLE 7: Mortgage Banking Segment Operating Results
Gains of sales of loans
592
514
Mortgage lender services fee income
541
Other income
3,121
2,529
44
The mortgage banking segment reported net income of $431,000 for the first quarter of 2025, compared to $294,000 for the same period of 2024, due primarily to:
The following table presents mortgage loan originations and mortgage loans sold for the periods indicated.
TABLE 8: Mortgage Loan Originations
Mortgage loan originations:
Purchases
101,640
86,760
Refinancings
12,110
7,586
Total mortgage loan originations1
113,750
94,346
Lock-adjusted originations2
142,340
120,400
Despite the sustained elevated level of mortgage interest rates, higher home prices and low levels of inventory, mortgage banking segment loan originations increased 20.6 percent for the first quarter of 2025, compared to the same period in 2024. Gains on sales of loans, while driven in part by mortgage loan originations, also includes the effects of changes in locked loan commitments, which reflect the volume of mortgage loan applications that are in process and have not closed. Lock-adjusted originations for the mortgage banking segment increased 18.2 percent for the first quarter of 2025 compared to the same period in 2024. Locked loan commitments were $71.8 million at March 31, 2025 compared to $39.3 million and $55.8 million at December 31, 2024 and March 31, 2024, respectively. Mortgage loan segment originations include originations of loans sold to the community banking segment, at prices similar to those paid by third-party investors. All interest expense at the mortgage banking segment is on variable rate borrowings from the community banking segment. These transactions are eliminated to reach consolidated totals.
Through the Lender Solutions division of the mortgage banking segment, mortgage lender services fee income is derived from providing mortgage origination functions to third-party mortgage lenders for a fee. Mortgage lender services fee income increased for the first quarter of 2025, compared to the same period in 2024, due primarily to an increase in fees and the types of services provided.
During the first quarter of 2025, the mortgage banking segment recorded a reversal of provision for indemnification losses of $25,000 compared to a reversal of provision for indemnification losses of $140,000 for the first quarter of 2024. The release of indemnification reserves in 2025 and 2024 was due primarily to lower volume of mortgage loan originations in recent years, 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.
The mortgage banking segment onboarded a new team of loan officers on March 31, 2025 who, based on current mortgage market conditions and forecasts, are projected to generate new mortgage loan originations of approximately $100 to $125 million on an annual basis.
Consumer Finance: The following table presents the consumer finance operating results for the periods indicated.
TABLE 9: Consumer Finance Segment Operating Results
3,541
3,222
The consumer finance segment reported net income of $226,000 for the first quarter of 2025, compared to a net loss of $63,000 for the same period in 2024. The increase in consumer finance segment net income was due primarily to:
Net interest income for the consumer finance segment increased by $219,000 to $6.4 million for the first quarter of 2025, compared to the same period in 2024 due primarily to higher net interest margin, partially offset by lower average balances of loans. Average loans decreased $8.3 million, or 1.8 percent, for the first quarter of 2025, compared to the same period in 2024. All interest expense at the consumer finance segment is on fixed and variable rate borrowings from the community banking segment. These transactions are eliminated to reach consolidated totals.
The consumer finance segment recorded $2.9 million in provision for credit losses for the first quarter of 2025, compared to $3.0 million for the same period of 2024 due primarily to lower average loan balances, partially offset by an increase in net charge-offs. Net charge-offs increased due primarily to an increase in delinquent loans, repossessions and the average
amount charged-off when a loan was uncollectable. If loan performance deteriorates, resulting in further elevated delinquencies or net charge-offs, the provision for credit losses may increase in future periods.
ASSET QUALITY
Allowance and Provision for Credit Losses
The Corporation conducts an analysis of the collectability of the loan portfolio on a regular basis and uses this analysis to assess the sufficiency of the allowance for credit losses on loans and to determine the necessary provision for credit losses. The Corporation segments the loan portfolio into three loan portfolios based on common risk characteristics.
Commercial and consumer loans are assigned loan classification ratings based on their credit quality and risk of loss. These loan ratings are reviewed on a quarterly basis and updated as new information becomes available. The characteristics of these loan ratings are as follows:
The Corporation monitors the consumer finance loan portfolio by past due status and by credit rating at the time of origination, which the Corporation believes serves as a relevant indicator of aggregate credit quality and risk of loan defaults in the portfolio based upon the use of Fair Isaac Corporation (FICO) Scores over time for loan approval decisions and through experience analyzing loss patterns. The characteristics of these credit ratings and our thresholds are as follows:
The allowance for credit losses represents an amount that, in our judgment, reduces the recorded investment in loans to the net amount expected to be collected. The provision for credit losses increases the allowance, and loans charged off, net of recoveries, reduce the allowance.
The following tables present the Corporation’s credit loss experience for the periods indicated.
TABLE 10: Allowance for Credit Losses
Consumer1
For the three months ended March 31, 2025:
Average loans2
1,088,690
380,535
1,934,751
Ratio of annualized net (recoveries) charge-offs to average loans
(0.00)
0.03
2.64
0.64
For the three months ended March 31, 2024:
946,621
357,796
1,778,265
0.05
2.54
0.69
For further information regarding the adequacy of our allowance for credit losses, refer to “Table 16: Nonperforming Assets” and the accompanying disclosure below.
The allocation of the allowance for credit losses and the ratio of corresponding outstanding loan balances to total loans are as follows as of the dates indicated.
TABLE 11: Allocation of Allowance for Credit Losses
Allocation of allowance for credit losses:
Total allowance for credit losses
Ratio of loans to total period-end loans:
56
Loans are required to be measured at amortized cost and to be presented at the net amount expected to be collected. Credit losses on available for sale debt securities are accounted for as an allowance for credit losses, which is a valuation account that is deducted from the amortized cost basis of the financial asset to present the net carrying value and the amount expected to be collected on the financial asset. Off balance sheet credit exposures, including loan commitments, are not recorded on balance sheet, but expected credit losses arising from off balance sheet credit exposures are recorded as a reserve for unfunded commitments and reported in Other Liabilities. The following table presents the Corporation’s reserve for unfunded commitments for the periods indicated.
TABLE 12: Reserve for Unfunded Commitments
The allowance for credit losses on loans and available for sale debt securities and the reserve for unfunded commitments are established through a provision for credit losses charged against earnings. The following table presents a breakdown of the provision for credit losses for the periods indicated:
TABLE 13: Provision for Credit Losses
49
TABLE 14: Credit Quality Indicators
Loans by credit quality indicators as of March 31, 2025 were as follows:
Special
Mention
Nonaccrual
Total1
Very Good
Fairly Good
Loans by credit quality indicators as of December 31, 2024 were as follows:
Table 15 summarizes the Corporation’s credit ratios on a consolidated basis and Table 16 summarizes nonperforming assets by principal business segment as of March 31, 2025 and December 31, 2024. The mortgage banking segment did not have any nonperforming assets as March 31, 2025 or December 31, 2024.
50
TABLE 15: Consolidated Credit Ratios
Total loans1
Nonaccrual loans
Allowance for credit losses (ACL)
Nonaccrual loans to total loans
0.11
ACL to total loans
2.06
2.09
ACL to nonaccrual loans
1,850.42
4,233.05
TABLE 16: Nonperforming Assets
Community Banking Segment
ACL
17,511
17,379
0.08
0.02
1.18
1.20
1,472.75
5,218.92
Annualized year-to-date net charge-offs to average total loans
0.01
Consumer Finance Segment
975
614
Repossessed assets
976
779
0.21
0.13
4.88
4.86
2,310.97
3,698.37
2.62
The community banking segment’s nonaccrual loans were $1.2 million at March 31, 2025 compared to $333,000 at December 31, 2024. The increase in nonaccrual loans compared to December 31, 2024 is due primarily to the downgrade
of one residential mortgage relationship in the first quarter of 2025. The community banking segment recorded $100,000 in provision for credit losses for the first quarter of 2025, compared to $500,000 for the same period of 2024. At March 31, 2025, the allowance for credit losses increased to $17.5 million, compared to an allowance for credit losses of $17.4 million at December 31, 2024, due primarily to growth in the loan portfolio and increased macroeconomic uncertainties. The allowance for credit losses as a percentage of total loans decreased to 1.18 percent at March 31, 2025 from 1.20 percent at December 31, 2024, due primarily to growth in loans with shorter expected lives, which resulted in lower estimated losses over the life of the loan. Management believes that the level of the allowance for credit losses is adequate to reflect the net amount expected to be collected.
Nonaccrual loans at the consumer finance segment were $975,000 at March 31, 2025 compared to $614,000 at December 31, 2024. Nonaccrual consumer finance loans remain low relative to the allowance for credit losses and the total consumer finance loan portfolio because the consumer finance segment generally initiates repossession of loan collateral once a loan becomes more than 60 days delinquent. Repossessed vehicles of the consumer finance segment are classified
as other assets and consist only of vehicles the Corporation has the legal right to sell. Prior to the reclassification from loans to repossessed vehicles, the difference between the carrying amount of each loan and the fair value of each vehicle (i.e. the deficiency) is charged against the allowance for credit losses. At March 31, 2025, repossessed vehicles available for sale totaled $976,000 compared to $779,000 at December 31, 2024.
The consumer finance segment experienced net charge-offs at an annualized rate of 2.64 percent of average total loans for the first quarter of 2025, compared to 2.54 percent for the same period of 2024, due primarily to an increase in the number of delinquent loans, the number of repossessions and the average amount charged-off when a loan was uncollectable. At March 31, 2025, total delinquent loans as a percentage of total loans was 3.05 percent compared to 3.90 percent at December 31, 2024 and 2.78 percent at March 31, 2024. The allowance for credit losses was $22.5 million at March 31, 2025 and $22.7 million at December 31, 2024. The allowance for credit losses as a percentage of total loans increased to 4.88 percent at March 31, 2025, compared to 4.86 percent at December 31, 2024.
The consumer finance segment at times offers payment deferrals to borrowers 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. Average amounts of payment deferrals of automobile loans on a monthly basis, which are not included in delinquent loans, were 1.75 percent, 1.62 percent and 2.11 percent as a percentage of average automobile loans outstanding for the first quarter of 2025, the first quarter of 2024 and the fourth quarter of 2024, respectively.
The consumer finance segment is an indirect lender that provides automobile financing through lending programs that are designed to serve customers in both the “prime” and “non-prime” markets, including those who may have limited access to traditional automobile financing due to having experienced prior credit difficulties. The preferred automobile is a later model, low mileage used vehicle because the value of new vehicles typically depreciates rapidly. In addition to automobile financing, marine and RV loan contracts are also purchased on an indirect basis through a referral program administered by a third party. The marine and RV loan contracts are for “prime” loans averaging less than $50,000 made to individuals with higher credit scores.
The consumer finance segment’s focus has included “non-prime” borrowers and, therefore, the anticipated rates of delinquencies, defaults, repossessions and losses on the consumer finance loans are higher than those experienced in the general automobile finance industry and could be more dramatically affected by changes in general economic conditions. Changes in economic conditions may also affect consumer demand for used automobiles and values of automobiles securing outstanding loans, due to changes in demand or changes in levels of inventory of used automobiles, which may directly affect the amount of a loss incurred by the consumer finance segment in the event of default. While we manage the higher risk inherent in loans made to “non-prime” borrowers through the underwriting criteria, portfolio management and collection methods employed by the consumer finance segment, we cannot guarantee that these criteria or methods will afford adequate protection against these risks. With the consumer finance segment’s scorecard model for purchasing loan contracts, the credit-worthiness of borrowers at origination has improved for automobile loans purchased and the level of credit losses experienced has decreased relative to long-term historical averages. We cannot provide any assurance that the consumer finance segment’s net charge-off ratio will not increase in future periods. However, we believe that the current allowance for credit losses is adequate to reflect the net amount expected to be collected on existing consumer finance segment loans that may become uncollectible. If factors influencing the consumer finance segment result in higher net charge-off ratios in future periods, the consumer finance segment may need to increase the level of its allowance for credit losses through additional provisions for credit losses, which could negatively affect future earnings of the consumer finance segment.
FINANCIAL CONDITION
At March 31, 2025, the Corporation had total assets of $2.6 billion, an increase of $49.2 million since December 31, 2024. The increase was attributable primarily to growth in loans held for investment, available for sale securities, interest-bearing deposits in other banks and loans held for sale, funded by growth in deposits. The significant components of the Corporation’s Consolidated Balance Sheets are discussed below.
Loan Portfolio
Tables 17, 18 and 19 present information pertaining to the composition of loans held for investment, the composition of commercial real estate and construction commercial real estate loans, and the maturity/repricing of certain loans held for investment, respectively.
TABLE 17: Summary of Loans Held for Investment
Percent
During the first quarter of 2025, loans held for investment increased $22.9 million to $1.94 billion at March 31, 2025 due primarily to growth in commercial real estate loans, builder lines and equity lines at the community banking segment, partially offset by a decrease in commercial real estate construction loans at the community banking segment and a decrease in loans at the consumer finance segment.
TABLE 18: Commercial Real Estate and Construction Commercial Real Estate Loans
% of Commercial Real Estate and Construction Commercial Real Estate Loans
Multifamily
168,590
19.2
8.7
Retail
17.6
8.0
Office
119,293
13.6
6.1
Industrial/warehouse
95,687
10.9
4.9
Hotels
88,627
10.1
4.6
1-4 family investment properties
86,929
9.9
4.5
Mini-storage
44,849
5.1
2.3
Medical office
40,959
4.7
2.1
79,962
8.9
4.1
879,450
45.3
172,574
19.9
9.0
153,227
17.7
120,412
13.9
6.3
94,100
84,936
9.8
4.4
80,950
9.3
4.2
39,368
40,335
80,997
866,899
45.1
TABLE 19: Maturity/Repricing Schedule of Loans Held for Investment
Variable Rate:
Within 1 year
300,481
67,594
368,075
1 to 5 years
103,994
1,168
105,162
5 to 15 years
8,420
After 15 years
Fixed Rate:
128,018
9,030
4,980
142,028
281,393
85,790
241,706
608,889
259,895
181,449
215,450
656,794
14,043
39,915
53,958
1,096,244
384,946
54
The investment portfolio plays a primary role in the management of the Corporation’s interest rate sensitivity. In addition, the portfolio serves as a source of liquidity and is used as needed to meet collateral requirements. The investment portfolio consists of securities available for sale, which may be sold in response to changes in market interest rates, changes in prepayment risk, increases in loan demand, general liquidity needs and other similar factors. These securities are carried at estimated fair value. At March 31, 2025 and December 31, 2024, all debt securities in the Corporation’s investment portfolio were classified as available for sale.
The following table sets forth the composition of the Corporation’s securities available for sale in dollar amounts at fair value and as a percentage of the Corporation’s total securities available for sale at the dates indicated.
TABLE 20: Securities Available for Sale
Total available for sale securities at fair value
During the first quarter of 2025, securities available for sale increased $12.9 million to $431.5 million at March 31, 2025 due primarily to increases in mortgage-backed securities offset by decreases in U.S. treasury securities. Net unrealized losses in the market value of securities available for sale decreased to $24.2 million at March 31, 2025, compared to $30.0 million at December 31, 2024.
For more information about the Corporation’s securities available for sale, including information about securities in an unrealized loss position at March 31, 2025 and December 31, 2024, see Part I, Item 1, “Financial Statements” under the heading “Note 2: Securities” in this Quarterly Report on Form 10-Q.
The following table presents additional information pertaining to the composition of the securities portfolio at amortized cost, by the earlier of contractual maturity or expected maturity. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties. The total effective duration of the investment portfolio is 3.9 years as of March 31, 2025.
TABLE 21: Maturity of Securities
Weighted
Yield 1
U.S. Treasury securities:
Maturing after 1 year, but within 5 years
1.38
Total U.S. Treasury securities
U.S. government agencies and corporations:
Maturing within 1 year
10,171
31,016
1.37
Maturing after 5 years, but within 10 years
21,486
1.78
Maturing after 10 years
6,100
2.16
Total U.S. government agencies and corporations
1.52
Mortgage-backed securities:
30,040
2.41
89,133
2.49
63,067
2.84
28,759
4.27
Total mortgage-backed securities
2.83
States and municipals:1
22,856
3.98
41,174
47,978
35,248
4.49
Total states and municipals
3.58
Corporate and other debt securities:
4,652
13,500
5,500
4.58
Total corporate and other debt securities
4.26
Total securities:
2.32
3.13
4.20
2.93
The Corporation’s predominant source of funds is depository accounts, which are comprised of demand deposits, savings and money market accounts and time deposits. The Corporation’s deposits are principally provided by individuals and businesses located within the communities served.
During the first quarter of 2025, deposits increased $45.8 million to $2.22 billion at March 31, 2025. Noninterest bearing demand deposits increased $53.6 million, savings, money markets and interest-bearing demand deposits decreased $17.0 million and time deposits increased $9.2 million during the same period. The decrease in savings, money market and interest-bearing demand deposits was due in part to a shift in balances toward time deposits amid a higher interest rate environment and to seasonal factors related to municipal deposits, which tend to increase with tax collections primarily in the fourth quarter of each year and decline with spending thereafter. The Corporation had $125.1 million in municipal deposits at March 31, 2025 compared to $163.4 million at December 31, 2024.
The Corporation had $25.0 million in brokered money market and time deposits outstanding at both March 31, 2025 and December 31, 2024. The Corporation may continue to use brokered deposits on a limited basis as a means of maintaining and diversifying liquidity and funding sources.
During the first quarter of 2025, borrowings decreased $3.1 million to $119.5 million at March 31, 2025 due primarily to fluctuations in balances with commercial deposit customers with repurchase agreements.
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. Stable core deposits and a strong capital position are the components of a solid foundation for the Corporation’s liquidity position. 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, the issuance of brokered certificates of deposit and the capacity to borrow additional funds. Depending on the Corporation’s liquidity levels, conditions in the capital markets and other factors, the Corporation may from time to time consider the issuance of debt, equity or other securities, the proceeds of which could provide additional liquidity for our operations.
Liquid assets, which include cash and due from banks, interest-bearing deposits at other banks and nonpledged securities available for sale, totaled $315.0 million at March 31, 2025 compared to $288.1 million at December 31, 2024. The Corporation’s funding sources, including capacity, amount outstanding and amount available at March 31, 2025 are presented in Table 22. The Corporation’s capacity and amount available both decreased $7.5 million from December 31, 2024 due primarily to fluctuations in loans pledged to the FHLB.
TABLE 22: Funding Sources
Capacity
Outstanding
Unsecured federal funds agreements
75,000
Borrowings from FHLB
248,508
208,508
Borrowings from FRB
315,221
638,729
598,729
257,734
217,734
313,499
646,233
606,233
We have no reason to believe these arrangements will not be renewed at maturity. Additional loans and securities are available that can be pledged as collateral for future borrowings from the FHLB and FRB above the current lendable collateral value. Our ability to maintain sufficient liquidity may be affected by numerous factors, including economic conditions nationally and in our markets. Depending on our liquidity levels, our capital position, conditions in the capital markets, our business operations and initiatives, and other factors, we may from time to time consider the issuance of debt, equity or other securities or other possible capital market transactions, the proceeds of which could provide additional liquidity for our operations.
Uninsured deposits represent an estimate of amounts above the Federal Deposit Insurance Corporation (FDIC) insurance coverage limit of $250,000. As of March 31, 2025, the Corporation’s uninsured deposits were approximately $644.4 million, or 29.1 percent of total deposits. Excluding intercompany cash holdings and municipal deposits which are secured with pledged securities, amounts uninsured were approximately $496.6 million, or 22.4 percent of total deposits as of
57
March 31, 2025, compared to $455.2 million, or 21.0 percent of total deposits as of December 31, 2024. The Corporation’s liquid assets and borrowing availability as of March 31, 2025 totaled $913.7 million, exceeding uninsured deposits, excluding intercompany cash holdings and secured municipal deposits, by $417.1 million.
The Corporation’s internal policy limits brokered deposits to 20 percent of total deposits, representing approximately $418.3 million of additional net availability for additional brokered deposits as of March 31, 2025.
In the ordinary course of business, the Corporation has entered into contractual obligations and has made other commitments to make future payments. For further information concerning the Corporation’s expected timing of such payments refer to “Item 8. Financial Statements and Supplementary Data,” under the headings “Note 9: Leases,” “Note 11: Borrowings,” and “Note 18: Commitments and Contingent Liabilities” in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024.
As a result of the Corporation’s management of liquid assets and the ability to generate liquidity through liability funding, management believes that the Corporation maintains overall liquidity sufficient to satisfy its operational requirements and contractual obligations.
Capital Resources
The assessment of capital adequacy depends on such factors as asset quality, liquidity, earnings performance, and changing competitive conditions and economic forces. We regularly review the adequacy of the Corporation’s and the Bank’s capital. We maintain a structure that will assure an adequate level of capital to support anticipated asset growth and to absorb potential losses. While we will continue to look for opportunities to invest capital in profitable growth, share repurchases are another tool that facilitates improving shareholder return, as measured by ROE and earnings per share.
The disclosure below presents the Corporation’s and the Bank’s actual capital amounts and ratios under currently applicable regulatory capital standards. Under the small bank holding company policy statement of the Federal Reserve Board, which applies to certain bank holding companies with consolidated total assets of less than $3 billion, the Corporation is not subject to regulatory capital requirements. The table below reflects the Corporation’s consolidated capital as determined under regulations that apply to bank holding companies that are not small bank holding companies and minimum capital requirements that would apply to the Corporation if it were not a small bank holding company. Although the minimum regulatory capital requirements are not applicable to the Corporation, the Corporation calculates these ratios for its own planning and monitoring purposes. Total risk-weighted assets at March 31, 2025 for the Corporation were $2.15 billion and for the Bank were $2.12 billion. Total risk-weighted assets at December 31, 2024 for the Corporation were $2.13 billion and for the Bank were $2.10 billion. As of March 31, 2025, the Bank met all capital adequacy requirements to which it is subject.
TABLE 23: Regulatory Capital
Minimum Capital
Well Capitalized
Actual
Requirements
Ratio
The Corporation
Total risk-based capital ratio
303,432
14.1
171,896
Tier 1 risk-based capital ratio
256,397
11.9
128,922
6.0
Common Equity Tier 1 capital ratio
231,397
10.8
96,692
Tier 1 leverage ratio
103,621
4.0
The Bank
290,920
13.7
169,850
212,313
10.0
264,201
12.4
127,388
95,541
138,003
6.5
10.3
102,806
128,507
5.0
299,157
170,256
252,373
127,692
227,373
10.7
95,769
102,645
284,550
13.5
168,233
210,291
258,078
12.3
126,175
94,631
136,689
101,805
127,256
The regulatory risk-based capital amounts presented above include: (1) common equity tier 1 capital (CET1) which consists principally of common stock (including surplus) and retained earnings with adjustments for goodwill and intangible assets; (2) Tier 1 capital which consists principally of CET1 plus the Corporation’s “grandfathered” trust preferred securities; and (3) Tier 2 capital which consists principally of Tier 1 capital plus a limited amount of the allowance for credit losses and $20.0 million of outstanding subordinated notes of the Corporation. The Total Capital ratio, Tier 1 Capital ratio and CET1 ratio are calculated as a percentage of risk-weighted assets. The Tier 1 Leverage ratio is calculated as a percentage of average tangible assets. In addition, the Corporation has made the one-time irrevocable election to continue treating accumulated other comprehensive income (AOCI) under regulatory standards that were in place prior to the Basel III Final Rule in order to eliminate volatility of regulatory capital that can result from fluctuations in AOCI and the inclusion of AOCI in regulatory capital, as would otherwise be required under the Basel III Capital Rule. As a result of this election, changes in AOCI, including unrealized losses on securities available for sale, do not affect regulatory capital amounts shown in the table above for the Corporation or the Bank. For additional information about the Basel III Final Rules, see “Item 1. Business” under the heading “Regulation and Supervision” and “Item 8. Financial Statements and Supplementary Data,” under the heading “Note 17: Regulatory Requirements and Restrictions” in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024.
In addition to the regulatory risk-based capital requirements, the Bank must maintain a capital conservation buffer of 2.5 percent of risk-weighted assets as required by the Basel III Final Rule. Including the capital conservation buffer, the minimum ratios are a common equity Tier 1 risk-based capital ratio of 7.0 percent, a Tier 1 risk-based capital ratio of 8.5 percent, and a total risk-based capital ratio of 10.5 percent. The Corporation and the Bank exceeded these ratios at March 31, 2025 and December 31, 2024.
The Corporation’s capital resources are impacted by its share repurchase programs. The Board of Directors authorized a program, effective January 1, 2025 through December 31, 2025, to repurchase up to $5.0 million of the Corporation’s common stock (the 2025 Repurchase Program). Repurchases under the 2025 Repurchase Program may be made through privately negotiated transactions or open market transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended, (Exchange Act) and shares repurchased will be returned to the status of authorized and unissued shares of common stock. The timing, number and purchase price of shares repurchased under the program will be determined by management in its discretion and will depend on a number of factors, including the market price of the shares, general market and economic conditions, applicable legal requirements and other conditions, and there is no assurance that the Corporation will purchase any shares under the 2025 Repurchase Program. As of March 31, 2025, there was $5.0 million remaining available for repurchases of the Corporation’s common stock under the 2025 Repurchase Program.
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 net tangible income attributable to the Corporation, 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. Interest on tax-exempt loans and securities is presented on a taxable-equivalent basis (which converts the income on loans and investments for which no income taxes are paid to the equivalent yield as if income taxes were paid) using the federal corporate income tax rate of 21 percent that was applicable for all periods presented.
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, or more important than, 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.
TABLE 24: Non-GAAP Table
For The Quarter Ended
(Dollars in thousands, except for share and per share data)
Reconciliation of Certain Non-GAAP Financial Measures
Return on Average Tangible Common Equity
Average total equity, as reported
Average goodwill
(25,191)
Average other intangible assets
(1,118)
(1,366)
Average noncontrolling interest
(637)
(649)
Average tangible common equity
203,849
189,857
Amortization of intangibles
62
Net income attributable to noncontrolling interest
(34)
Net tangible income attributable to C&F Financial Corporation
5,430
3,466
Annualized return on average equity, as reported
Annualized return on average tangible common equity
Fully Taxable Equivalent Net Interest Income1
Interest income on loans
FTE adjustment
FTE interest income on loans
Interest income on securities
3,104
2,863
242
235
FTE interest income on securities
288
FTE interest income
FTE net interest income
(Dollars in thousands except for per share data)
Tangible Book Value Per Share
Other intangible assets
(1,084)
(1,147)
Tangible equity attributable to C&F Financial Corporation
208,359
200,022
Shares outstanding
3,235,781
3,233,672
Book value per share
72.51
70.00
Tangible book value per share
64.39
61.86
61
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This report contains statements concerning the Corporation’s expectations, plans, objectives or beliefs regarding future financial performance and other statements that are not historical facts, which may constitute “forward-looking statements” as defined by federal securities laws. Forward-looking statements generally can be identified by the use of words such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “may,” “might,” “will,” “intend,” “target,” “should,” “could,” or similar expressions, are not statements of historical fact, and are based on management’s beliefs, assumptions and expectations regarding future events or performance as of the date of this report, taking into account all information currently available. These statements may include, but are not limited to: 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; changes in interest rates and the effects thereof on net interest income, expected renewal of unsecured federal funds agreements; expected impact of unrealized losses on earnings and regulatory capital of the Corporation or the Bank; expectations regarding the Bank’s regulatory risk-based capital requirement levels; competition, our loan portfolio; our digital services; deposit trends; improving operational efficiencies; retention of qualified loan officers and expectations regarding new mortgage loan originations; higher quality automobile loan contracts, marine and RV lending; strategic business initiatives and the anticipated effects thereof on mortgage loan originations; 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; capital levels; the effect of future market and industry trends; the effects of future interest rate levels and fluctuations; cybersecurity risks and inflation. These forward-looking statements are subject to significant risks and uncertainties due to factors that could have a material adverse effect on the operations and future prospects of the Corporation including, but not limited to, changes in:
These risks and uncertainties, and the risks discussed in more detail in Item 1A. “Risk Factors,” of Part I of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024 should be considered in evaluating the forward-looking statements contained herein.
Readers should not place undue reliance on any forward-looking statement. There can be no assurance that actual results will not differ materially from historical results or those expressed in or implied by such forward-looking statements, or that the beliefs, assumptions and expectations underlying such forward-looking statements will be proven to be accurate. Forward-looking statements are made as of the date of this report and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which the statement was made, except as otherwise required by law.
63
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Corporation’s primary component of market risk is interest rate volatility. Fluctuations in interest rates will affect the amount of interest income and expense the Corporation receives or pays on a significant portion of its assets and liabilities and the market value of its interest-earning assets and interest-bearing liabilities, excluding those which have a very short term until maturity. The Corporation does not subject itself to foreign currency exchange rate risk or commodity price risk due to the current nature of its operations. The Corporation has established a comprehensive enterprise risk management program to monitor risks related to its operations, including market risk, and the Corporation’s Chief Risk Officer has primary responsibility for the enterprise risk management program.
The Corporation’s Asset/Liability Committee meets at least quarterly with the primary objective of maximizing current and future net interest income within acceptable levels of interest rate risk while satisfying liquidity and capital requirements. Management recognizes that a certain amount of interest rate risk is inherent and appropriate. Thus the goal of interest rate risk management is to maintain a balance between risk and reward such that net interest income is maximized while risk is maintained at an acceptable level. The objective of the Corporation’s liquidity management is to meet the Corporation’s liquidity requirements by ensuring the continuous availability of funds to satisfy the credit needs of our customers and the demands of our depositors, creditors and investors. Stable core deposits and a strong capital position are the components of a solid foundation for the Corporation’s liquidity position. Management continuously monitors cash flows, including deposit flows, loan fundings and draws, securities payments and borrowing maturities, and the impact of changes in interest rates on these cash flows. Additionally, management tracks uninsured deposits, unpledged securities and unpledged loans among other liquidity metrics.
The Corporation assumes interest rate risk in the normal course of operations. The fair values of most of the Corporation’s financial instruments will change when interest rates change and that change may be either favorable or unfavorable to the Corporation. Management attempts to match maturities and repricing dates of assets and liabilities to the extent believed necessary to balance minimizing interest rate risk and increasing net interest income in current market conditions. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates, maturities and repricing dates of assets and liabilities and attempts to manage interest rate risk by adjusting terms of new loans, deposits and borrowings, by investing in securities with terms that manage the Corporation’s overall interest rate risk, and in some cases by using derivative contracts to reduce the Corporation’s overall exposure to changes in interest rates. The Corporation does not enter into interest rate-sensitive instruments for trading purposes.
We use simulation analysis to assess earnings at risk and economic value of equity (EVE) analysis to assess economic value at risk. These methods allow management to regularly monitor both the direction and magnitude of the Corporation’s interest rate risk exposure. These modeling techniques involve assumptions and estimates that inherently cannot be measured with complete precision. Key assumptions in the analyses include maturity and repricing characteristics of both assets and liabilities, prepayments on amortizing assets, other embedded options, non-maturity deposit sensitivity and loan and deposit pricing. These assumptions are inherently uncertain due to the timing, magnitude and frequency of rate changes and changes in market conditions and management strategies, among other factors. However, the analyses are useful in quantifying risk and provide a relative gauge of the Corporation’s interest rate risk position over time.
Simulation analysis evaluates the potential effect of upward and downward changes in market interest rates on future net interest income. The analysis involves changing the interest rates used in determining net interest income over the next twelve months. The resulting percentage change in net interest income in various rate scenarios is an indication of the Corporation’s shorter-term interest rate risk. The analysis utilizes a “static” balance sheet approach, which assumes changes in interest rates without any management response to change the composition of the balance sheet. The measurement date balance sheet composition is maintained over the simulation time period with maturing and repayment dollars being rolled back into like instruments for new terms at current market rates. Additional assumptions are applied to modify volumes and pricing under the various rate scenarios. These assumptions include loan prepayments, time deposit early withdrawals, the sensitivity of deposit repricing to changes in market rates, withdrawal behavior of non-maturing deposits, and other factors that management deems significant.
The simulation analysis results, based on a measurement date balance sheet as of March 31, 2025, for hypothetical changes in net interest income over the next twelve months are presented in the table below.
One-Year Net Interest Income Simulation (dollars in thousands)
Hypothetical Change in Net
Interest Income
Over the Next Twelve Months
as of
Assumed Market Interest Rate Shift
Dollars
Percentage
-300 BP shock
(10,659)
(9.14)
(7,568)
(6.66)
-200 BP shock
(6,760)
(5.80)
(4,687)
(4.12)
-100 BP shock
(3,116)
(2.67)
(2,040)
(1.79)
+100 BP shock
1,179
228
0.20
+200 BP shock
2,471
2.12
511
0.45
+300 BP shock
3,716
3.19
764
These results indicate that the Corporation would expect net interest income to decrease over the next twelve months assuming an immediate downward shift in market interest rates of 100 BP to 300 BP and to increase if rates shifted upward to the same degree. The simulation analysis results show the Corporation’s sensitivity to an upward shift in rates relative to a downward shift in rates was less pronounced as of March 31, 2025 compared to the results as of December 31, 2024 due primarily to shifts in the mix of loans and deposits and a lower interest rate environment, particularly lower longer-term market rates.
The EVE analysis provides information on the risk inherent in the balance sheet that might not be taken into account in the simulation analysis due to the shorter time horizon used in that analysis. The EVE of the balance sheet is defined as the discounted present value of expected asset cash flows minus the discounted present value of the expected liability cash flows. The analysis involves changing the interest rates used in determining the expected cash flows and in discounting the cash flows. The resulting percentage change in net present value in various rate scenarios is an indication of the longer term repricing risk and options embedded in the balance sheet.
The EVE analysis results are presented in the table below.
Static EVE Change (dollars in thousands)
Hypothetical Change in EVE
(36,797)
(8.79)
(25,260)
(6.49)
(15,724)
(3.75)
(9,335)
(2.40)
(2,475)
(0.59)
270
0.07
(4,531)
(1.08)
(6,771)
(1.74)
(9,071)
(2.17)
(13,022)
(3.34)
(14,563)
(3.48)
(20,439)
(5.25)
These results as of March 31, 2025 indicate that the EVE would decrease assuming an immediate downward or upward shift in market interest rates of 100 BP to 300 BP. As of March 31, 2025, the Corporation’s EVE is more sensitive to downward changes in rates and less sensitive to upward changes in rates compared to its position as of December 31, 2024 due primarily to shifts in the mix of earning assets and in the mix of deposits and borrowings, which impacted the overall duration of both assets and liabilities. The lower interest rate environment as of March 31, 2025 compared to December 31, 2024, particularly lower longer-term market rates, increased the prepayment expectations of certain earning assets, which also contributed to the Corporation’s EVE sensitivity to changes in rates.
Certain shortcomings are inherent in the methodology used in the above interest rate risk analyses. Modeling changes in forecasted cash flows and EVE requires making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates, and certain assumed scenarios may be impractical to model under different economic circumstances. In a falling rate environment, the analyses assume that rate-sensitive assets are repriced downward, subject to floors on certain loans, while certain deposit rates are not allowed to decrease below zero.
The Corporation uses interest rate swaps to manage select exposures to interest rate risk. Interest rate swaps involve the exchange of fixed and variable rate interest payments between two parties, based on a common notional principal amount and maturity date with no exchange of underlying principal amounts. The Corporation has interest rate swaps that qualify as cash flow hedges. The cash flow hedges effectively modify the Corporation’s exposure to interest rate risk associated with the Corporation’s trust preferred capital notes by converting variable rates of interest on the trust preferred capital notes to fixed rates of interest for periods ending between June 2026 and June 2029. Also, as part of the Corporation’s overall strategy for maximizing net interest income while managing interest rate risk, the Corporation enters into interest rate swaps in connection with originating loans to certain commercial borrowers as a means to offer a fixed-rate instrument to the borrower while effectively retaining a variable-rate exposure.
The mortgage banking segment enters into IRLCs with customers to originate loans for which the interest rates are determined prior to funding. The mortgage banking segment then mitigates interest rate risk on these IRLCs and loans held for sale by entering into forward sales contracts with investors at the time that interest rates are locked for loans to be delivered on a best efforts basis. IRLCs are derivative financial instruments.
We believe that our current interest rate exposure is manageable and within our current interest rate risk guidelines.
ITEM 4.CONTROLS AND PROCEDURES
The Corporation’s management, including the Corporation’s Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Corporation’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Corporation’s disclosure controls and procedures were effective as of March 31, 2025 to ensure that information required to be disclosed by the Corporation in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Corporation’s management, including the Corporation’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that the Corporation’s disclosure controls and procedures will detect or uncover every situation involving the failure of persons within the Corporation or its subsidiary to disclose material information required to be set forth in the Corporation’s periodic reports.
There were no changes in the Corporation’s internal control over financial reporting during the three months ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1A.RISK FACTORS
There have been no material changes in the risk factors faced by the Corporation from those disclosed in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
The Corporation’s Board of Directors authorized a program, effective January 1, 2025 through December 31, 2025, to repurchase up to $5.0 million of the Corporation’s common stock (the 2025 Repurchase Program). Repurchases under the 2025 Repurchase Program may be made through privately negotiated transactions or open market transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Exchange Act and shares repurchased will be returned to the status of authorized and unissued shares of common stock. The timing, number and purchase price of shares repurchased under the 2025 Repurchase Program, if any, will be determined by management in its discretion and will depend on a number of factors including the market price of the shares, general market and economic conditions, applicable legal requirements, and other conditions, and there is no assurance that the Corporation will purchase any shares under the 2025 Repurchase Program. There were no shares repurchased under the 2025 Repurchase Program during the first quarter of 2025.
The following table summarizes repurchases of the Corporation’s common stock that occurred during the three months ended March 31, 2025.
Maximum Number
(or Approximate
Total Number of
Dollar Value) of
Shares Purchased as
Shares that May Yet
Part of Publicly
Be Purchased
Average Price Paid
Announced Plans or
Under the Plans or
Shares Purchased1
per Share
Programs
January 1, 2025 - January 31, 2025
70.35
5,000,000
February 1, 2025 - February 28, 2025
1,247
80.33
March 1, 2025 - March 31, 2025
4,044
79.43
5,357
79.53
ITEM 5. OTHER INFORMATION
During the three months ended March 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).
ITEM 6.EXHIBITS
3.1
Amended and Restated Articles of Incorporation of C&F Financial Corporation, effective March 7, 1994 (incorporated by reference to Exhibit 3.1 to Form 10-Q filed November 8, 2017)
3.1.1
Amendment to Articles of Incorporation of C&F Financial Corporation, effective January 8, 2009 (incorporated by reference to Exhibit 3.1.1 to Form 8-K filed January 14, 2009)
3.2
Amended and Restated Bylaws of C&F Financial Corporation, as adopted December 15, 2020 (incorporated by reference to Exhibit 3.1 to Form 8-K filed December 17, 2020)
31.1
Certification of CEO pursuant to Rule 13a-14(a)
31.2
Certification of CFO pursuant to Rule 13a-14(a)
Certification of CEO/CFO pursuant to 18 U.S.C. Section 1350
101
The following financial statements from the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL, filed herewith: (i) the Consolidated Balance Sheets (unaudited), (ii) the Consolidated Statements of Income (unaudited), (iii) the Consolidated Statements of Comprehensive Income (unaudited), (iv) the Consolidated Statements of Equity (unaudited), (v) the Consolidated Statements of Cash Flows (unaudited) and (vi) the Notes to Consolidated Financial Statements (unaudited)
104
The cover page from the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL (included within Exhibit 101)
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 thereunto duly authorized.
(Registrant)
Date:
May 6, 2025
By:
/s/ Thomas F. Cherry
Thomas F. Cherry
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Jason E. Long
Jason E. Long
Executive Vice President, Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)