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, 2026
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 7, 2026, the latest practicable date for determination, 3,254,362 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, 2026 and December 31, 2025
Consolidated Statements of Income (Unaudited) – Three months ended March 31, 2026 and 2025
4
Consolidated Statements of Comprehensive Income (Unaudited) – Three months ended March 31, 2026 and 2025
5
Consolidated Statements of Equity (Unaudited) – Three months ended March 31, 2026 and 2025
6
Consolidated Statements of Cash Flows (Unaudited) –Three months ended March 31, 2026 and 2025
7
Notes to Consolidated Interim Financial Statements (Unaudited)
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
34
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
63
Item 4.
Controls and Procedures
65
PART II - Other Information
66
Legal Proceedings
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Item 5.
Other Information
Item 6.
Exhibits
67
Signatures
68
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,
2026
2025
Assets
Cash and due from banks
$
15,286
13,622
Interest-bearing deposits in other banks
62,141
65,510
Total cash and cash equivalents
77,427
79,132
Securities—available for sale at fair value, amortized cost of $485,390 and $471,036, respectively
470,619
458,111
Loans held for sale, at fair value
56,120
40,911
Loans, net of allowance for credit losses of $39,665 and $39,677, respectively
2,035,387
2,014,899
Restricted stock, at cost
3,346
3,680
Corporate premises and equipment, net
38,727
39,200
Other real estate owned, net of valuation allowance of $0 and $215, respectively
—
1,316
Accrued interest receivable
11,752
11,726
Goodwill
25,191
Other intangible assets, net
884
909
Bank-owned life insurance
21,911
21,808
Net deferred tax asset
14,411
14,039
Other assets
57,973
57,572
Total assets
2,813,748
2,768,494
Liabilities
Deposits
Noninterest-bearing demand deposits
568,420
543,673
Savings, money market and interest-bearing demand deposits
907,732
905,683
Time deposits
923,304
896,367
Total deposits
2,399,456
2,345,723
Short-term borrowings
20,000
Long-term borrowings
57,750
67,842
Trust preferred capital notes
25,501
25,493
Accrued interest payable
4,642
3,745
Other liabilities
40,287
43,343
Total liabilities
2,547,636
2,506,146
Commitments and contingent liabilities (Note 11)
Equity
Common stock ($1.00 par value, 8,000,000 shares authorized, 3,248,129 and 3,245,972 shares issued and outstanding, respectively, includes 100,480 and 100,578 of unvested shares, respectively)
3,148
3,145
Additional paid-in capital
1,016
1,078
Retained earnings
273,883
268,696
Accumulated other comprehensive loss, net
(12,577)
(11,166)
Equity attributable to C&F Financial Corporation
265,470
261,753
Noncontrolling interest
642
595
Total equity
266,112
262,348
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
34,715
32,382
Interest on interest-bearing deposits in other banks
651
502
Interest and dividends on securities
U.S. treasury, government agencies and corporations
259
289
Mortgage-backed securities
1,660
1,394
Tax-exempt obligations of states and political subdivisions
1,094
911
Taxable obligations of states and political subdivisions
194
195
Corporate and other
573
315
Total interest income
39,146
35,988
Interest expense
Savings and interest-bearing deposits
2,263
1,805
7,586
7,964
Borrowings
1,236
859
352
350
Total interest expense
11,437
10,978
Net interest income
27,709
25,010
Provision for credit losses
3,600
3,000
Net interest income after provision for credit losses
24,109
22,010
Noninterest income
Gains on sales of loans
2,545
1,847
Interchange income
1,577
1,475
Service charges on deposit accounts
1,020
990
Investment income from other equity interests
372
207
Mortgage banking fee income
850
570
Wealth management services income, net
808
732
Mortgage lender services income
820
536
Other service charges and fees
504
498
Other income, net
54
718
Total noninterest income
8,550
7,573
Noninterest expenses
Salaries and employee benefits
14,357
13,483
Occupancy
2,215
2,193
Data processing
3,175
2,866
Professional fees
917
921
Insurance expense
430
491
Marketing and advertising expenses
547
529
Loan processing and collection expenses
873
683
Other
1,801
1,893
Total noninterest expenses
24,315
23,059
Income before income taxes
8,344
6,524
Income tax expense
1,550
1,129
Net income
6,794
5,395
Less net income attributable to noncontrolling interest
47
27
Net income attributable to C&F Financial Corporation
6,747
5,368
Net income per share - basic and diluted
2.08
1.66
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
Other comprehensive (loss) income, net of tax:
Securities available for sale
(1,458)
4,610
Defined benefit plan
(13)
(9)
Cash flow hedges
60
(288)
Other comprehensive (loss) income, net of tax
(1,411)
4,313
Comprehensive income
5,383
9,708
Less comprehensive income attributable to noncontrolling interest
Comprehensive income attributable to C&F Financial Corporation
5,336
9,681
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
Attributable to C&F Financial Corporation
Accumulated
Additional
Common
Paid - In
Retained
Comprehensive
Noncontrolling
Total
Stock
Capital
Earnings
Loss, Net
Interest
Balance December 31, 2025
Comprehensive income:
Other comprehensive loss
Share-based compensation
514
Restricted stock vested
10
(10)
Common stock issued
1
40
41
Common stock purchased
(8)
(606)
(614)
Cash dividends declared ($0.48 per share)
(1,560)
Balance March 31, 2026
Balance December 31, 2024
3,114
36
247,814
(24,604)
610
226,970
Other comprehensive income
461
13
45
46
(5)
(421)
(426)
Cash dividends declared ($0.46 per share)
(1,488)
Balance March 31, 2025
3,123
108
251,694
(20,291)
637
235,271
CONSOLIDATED STATEMENTS OF CASH FLOWS
Operating activities:
Adjustments to reconcile net income to net cash (used by) provided by operating activities:
Accretion of certain acquisition-related discounts, net
(54)
(108)
Depreciation and amortization
940
988
(Accretion of discounts) and amortization of premiums on securities, net
(162)
20
Deferred income taxes
(4)
Reversal of provision for indemnifications
(35)
(25)
Income from bank-owned life insurance
(81)
(106)
Pension expense
154
183
Proceeds from sales of loans held for sale
164,123
108,010
Origination of loans held for sale
(180,601)
(112,972)
Gains on sales of loans held for sale
(2,545)
(1,847)
Other gains, net
(42)
141
Change in other assets and liabilities:
(26)
(6)
626
1,727
897
(472)
(1,670)
(1,178)
Net cash (used by) provided by operating activities
(7,572)
3,211
Investing activities:
Proceeds from sales, maturities and calls of securities available for sale and payments on mortgage-backed securities
14,590
17,176
Purchases of securities available for sale
(28,782)
(24,248)
Purchases of time deposits, net
(991)
Repayments on loans held for investment by non-bank affiliates
44,182
40,593
Purchases of loans held for investment by non-bank affiliates
(43,953)
(39,209)
Net increase in community banking loans held for investment
(21,941)
(27,487)
Purchases of corporate premises and equipment
(322)
(267)
Other investing activities, net
1,634
(92)
Net cash used in investing activities
(35,583)
(33,539)
Financing activities:
Net increase in demand, savings and money market deposits
26,796
36,556
Net increase in time deposits
26,937
9,238
Net decrease in repurchase agreements and borrowings
(10,000)
(3,085)
Repurchases of common stock
Cash dividends paid
Other financing activities, net
(109)
(95)
Net cash provided by financing activities
41,450
40,700
Net (decrease) increase in cash and cash equivalents
(1,705)
10,372
Cash and cash equivalents at beginning of period
65,586
Cash and cash equivalents at end of period
75,958
Supplemental cash flow disclosures:
Interest paid
10,531
11,441
Income taxes paid
Supplemental disclosure of noncash investing and financing activities:
Liabilities assumed to acquire right of use assets at lease commencement
134
190
Transfers from loans held for sale to loans held for investment
2,104
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, 2025 (2025 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 2025 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 LLC (C&F Insurance), and CVB Title Services, Inc. (CVB Title), all incorporated or organized 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 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. 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. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for any other interim period or for the full year.
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.
Recent Significant Accounting Pronouncements: In November 2024, the Financial Accounting Standards Board (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.
NOTE 2: Securities
The Corporation’s debt securities, all of which are classified as available for sale, are summarized in the following tables. The Corporation has elected to exclude accrued interest receivable, totaling $2.96 million and $2.67 million at March 31, 2026 and December 31, 2025, respectively, from the amortized cost basis of securities.
March 31, 2026
Gross
Amortized
Unrealized
Cost
Gains
Losses
Fair Value
U.S. Treasury securities
4,995
(87)
4,908
U.S. government agencies and corporations
58,605
(4,955)
53,650
227,286
1,516
(8,379)
220,423
Obligations of states and political subdivisions
159,871
938
(2,935)
157,874
Corporate and other debt securities
34,633
173
(1,042)
33,764
485,390
2,627
(17,398)
December 31, 2025
4,992
(105)
4,887
60,605
(4,895)
55,710
211,653
2,009
(7,830)
205,832
158,158
1,417
(2,484)
157,091
35,628
150
(1,187)
34,591
471,036
3,576
(16,501)
9
The amortized cost and estimated fair value of securities at March 31, 2026, 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
83,458
81,410
Due after one year through five years
186,654
179,712
Due after five years through ten years
145,474
140,549
Due after ten years
69,804
68,948
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, 2026 and 2025, 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
The Corporation pledges securities primarily to secure municipal deposits and lines of credit that provide liquidity to the Corporation and C&F Bank. Securities with an aggregate amortized cost of $124.05 million and an aggregate fair value of $119.12 million were pledged at March 31, 2026. Securities with an aggregate amortized cost of $138.43 million and an aggregate fair value of $130.88 million were pledged at December 31, 2025.
Securities in an unrealized loss position at March 31, 2026, by duration of the period of the unrealized loss, are shown below.
Less Than 12 Months
12 Months or More
Fair
Value
Loss
Value
87
4,955
41,854
97,260
7,949
139,114
8,379
46,082
548
43,429
2,387
89,511
2,935
13,076
56
14,014
986
27,090
1,042
101,012
1,034
213,261
16,364
314,273
17,398
There were 517 debt securities with a fair value below the amortized cost basis, totaling $314.27 million of aggregate fair value as of March 31, 2026. The Corporation concluded that a credit loss did not exist in its securities portfolio at March 31, 2026, and no allowance for credit losses has been recognized based on the fact that as of March 31, 2026 (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, 2025, by duration of the period of the unrealized loss, are shown below.
105
4,895
12,949
84
107,826
7,746
120,775
7,830
7,451
79
64,534
2,405
71,985
2,484
13,009
119
15,932
1,068
28,941
1,187
33,409
282
248,889
16,219
282,298
16,501
The Corporation’s investment in restricted stock totaled $3.35 million at March 31, 2026 and $3.68 million at December 31, 2025 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, 2026 and no impairment has been recognized.
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 following table. The Corporation has elected to exclude accrued interest receivable, totaling $8.78 million and $9.04 million at March 31, 2026 and December 31, 2025, respectively, from the recorded balance of loans.
March 31,
Commercial real estate
870,643
835,432
Commercial business
118,627
115,710
Construction - commercial real estate
75,262
99,604
Land acquisition and development
82,475
66,248
Builder lines
31,058
37,938
Construction - consumer real estate
32,540
29,288
Residential mortgage
316,677
319,536
Equity lines
76,920
76,460
Other consumer
10,204
10,085
Consumer finance - automobiles
405,473
406,312
Consumer finance - marine and recreational vehicles
55,173
57,963
Subtotal
2,075,052
2,054,576
Less allowance for credit losses
(39,665)
(39,677)
Loans, net
Other consumer loans included $269,000 and $240,000 of demand deposit overdrafts at March 31, 2026 and December 31, 2025, respectively.
11
The following table shows the aging of the Corporation’s loan portfolio, by class, at March 31, 2026.
30-59
60-89
90+
90+ Days
Days
Past Due and
Past Due
Current1
Total Loans
Accruing
162
109
271
118,356
1,435
123
905
2,463
314,214
88
125
17
142
76,778
35
10,169
12,655
1,477
890
15,022
390,451
393
23
416
54,757
14,805
1,709
1,835
18,349
2,056,703
The table above includes nonaccrual loans that are current of $104,000, 30-59 days past due of $79,000, 60-89 days past due of $99,000 and 90+ days past due of $1.73 million.
The following table shows the aging of the Corporation’s loan portfolio, by class, at December 31, 2025.
262
835,170
115,702
1,019
111
813
1,943
317,593
155
243
76,217
10,068
16,741
2,129
1,022
19,892
386,420
429
37
466
57,497
18,369
2,604
1,858
22,831
2,031,745
The table above includes nonaccrual loans that are current of $219,000, 30-59 days past due of $17,000, 60-89 days past due of $86,000 and 90+ days past due of $1.84 million.
The following table shows the Corporation’s recorded balance of loans on nonaccrual status as of March 31, 2026 and December 31, 2025. The Corporation recognized $13,000 in interest income on loans on nonaccrual status as of March 31, 2026 and had no reversals of interest income upon placing loans on nonaccrual status during the three months ended March 31, 2026. All nonaccrual loans at March 31, 2026 and December 31, 2025 had an allowance for credit losses, with none individually evaluated.
12
1,097
1,135
2,012
2,157
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 that were modified during the three months ended March 31, 2026 and 2025.
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, 2026 and 2025 of loans to borrowers experiencing financial difficulties that were modified during the previous twelve months and all were current as of March 31, 2026.
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 recreational vehicle (RV) loans.
The following table shows the allowance for credit losses activity by loan portfolio for the three months ended March 31, 2026 and 2025.
Consumer
Commercial
Finance
Balance at December 31, 2025
13,239
4,179
22,259
39,677
Provision charged to operations
146
3,300
3,450
Loans charged off
(65)
(4,626)
(4,691)
Recoveries of loans previously charged off
26
1,168
1,229
Balance at March 31, 2026
13,411
4,153
22,101
39,665
Balance at December 31, 2024
13,347
4,032
22,708
40,087
69
81
2,900
3,050
(61)
(4,073)
(4,134)
997
1,040
Balance at March 31, 2025
13,425
4,086
22,532
40,043
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)
The following table 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, 2026:
Revolving
Term Loans Recorded Balance by Origination Year
Loans
Recorded
Converted
2024
2023
2022
Prior
Balance
to Term1
Commercial real estate:
Loan Rating
Pass
29,748
72,456
114,721
130,789
160,904
361,830
870,573
Special Mention
70
361,900
Commercial business:
6,536
8,790
7,213
9,434
12,853
34,694
38,838
160
118,518
107
Substandard Nonaccrual
34,803
0
14
Construction - commercial real estate:
3,424
7,885
47,184
13,582
3,187
Land acquisition and development:
16,040
23,716
37,595
371
4,753
Builder lines:
4,976
19,435
4,978
446
1,018
205
Construction - consumer real estate:
2,934
27,061
Residential mortgage:
11,717
41,452
55,529
43,281
68,735
94,199
314,913
161
21
82
343
607
Substandard
97
800
104
96
55,787
44,102
68,921
94,698
Equity lines:
490
75,535
801
76,826
94
895
Other consumer:
1,952
4,111
2,103
1,108
580
308
42
Total:
77,327
204,906
271,868
198,640
247,648
496,479
114,415
1,086
1,612,369
520
878
98
1,099
272,126
199,461
247,834
497,157
1,180
1,614,406
The following table 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, 2025:
2021
72,184
110,069
120,853
162,934
120,074
249,017
229
835,360
72
249,089
9,557
7,623
13,091
11,841
26,507
36,875
15
10,384
54,141
31,892
18,966
41,178
5,733
27,069
8,855
826
784
404
24,158
5,130
44,390
57,382
46,606
71,350
33,087
64,871
317,686
22
202
347
655
113
833
189
57,495
47,461
71,623
33,289
65,278
493
75,165
701
76,359
101
802
5,157
2,512
1,318
670
300
211,865
286,890
211,664
252,387
165,084
347,325
112,086
977
1,588,278
419
828
287,003
212,519
252,660
165,286
347,804
1,590,301
The following table 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, 2026:
to Term
Consumer finance - automobiles:
Credit rating1
Very good
6,915
20,282
13,090
5,417
3,803
955
50,462
Good
14,165
42,919
25,800
14,942
15,416
4,252
117,494
Fairly good
12,399
45,770
27,028
20,605
19,898
8,241
133,941
7,193
28,267
17,053
12,529
11,958
6,974
83,974
Marginal
1,330
6,710
3,392
2,460
2,789
2,921
19,602
42,002
143,948
86,363
55,953
53,864
23,343
Consumer finance - marine and recreational vehicles:
1,302
5,893
4,695
10,246
14,396
36,532
1,426
3,755
5,391
5,301
2,364
18,237
164
171
16
2,728
9,648
10,250
15,718
16,829
21,584
18,983
10,112
14,049
15,351
86,994
44,345
29,555
20,333
20,717
6,616
135,731
20,769
20,069
8,310
134,345
146,676
96,011
66,203
69,582
40,172
460,646
The following table 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, 2025:
22,600
14,758
6,212
4,543
1,123
49,347
46,079
28,573
17,066
17,449
4,853
519
114,539
48,871
29,704
23,209
23,345
9,043
1,397
135,569
29,774
18,942
14,528
14,266
7,011
1,815
86,336
6,960
3,751
2,893
3,243
2,626
1,048
20,521
154,284
95,728
63,908
62,846
24,656
4,890
1,339
6,231
4,999
10,700
6,473
8,789
38,531
1,442
3,937
5,533
5,604
1,066
1,441
19,023
165
32
39
409
2,781
10,168
10,697
16,477
7,571
10,269
23,939
20,989
11,211
15,243
7,596
8,900
87,878
47,521
32,510
22,599
23,053
5,919
1,960
133,562
23,374
23,518
9,075
1,436
135,978
157,065
105,896
74,605
79,323
32,227
15,159
464,275
The following table details the current period gross charge-offs of loans by year of origination for the three months ended March 31, 2026.
Current Period Gross Charge-offs by Origination Year
Other consumer1
556
968
1,248
1,242
482
4,496
28
64
130
561
1,003
1,279
1,306
500
4,691
The following table details the current period gross charge-offs of loans by year of origination for the three months ended March 31, 2025.
55
593
1,004
1,616
587
196
3,996
52
77
51
603
1,017
1,668
597
198
4,134
As of March 31, 2026 and December 31, 2025, 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, 2026 and December 31, 2025. There were no changes in the recorded balance of goodwill during the three months ended March 31, 2026 or 2025.
The Corporation had $884,000 and $909,000 of other intangible assets as of March 31, 2026 and December 31, 2025, 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
(827)
(802)
Other amortizable intangibles
1,405
(1,405)
3,116
(2,232)
(2,207)
Amortization expense was $25,000 and $63,000 for the three months ended March 31, 2026 and 2025, 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, 2026 through December 31, 2026, to repurchase up to $5.0 million of the Corporation’s common stock (the 2026 Repurchase Program). During the three months ended
18
March 31, 2026, the Corporation repurchased 4,279 of its common stock under the 2026 Repurchase Program. As of March 31, 2026, there was $4.7 million remaining available for repurchases of the Corporation’s common stock under the 2026 Repurchase Program. The Corporation did not repurchase any of its common stock during the three months ended March 31, 2025 under the Corporation’s previous share repurchase program, effective January 1, 2025 through December 31, 2025 (the 2025 Repurchase Program).
Additionally, during the three months ended March 31, 2026 and 2025, the Corporation withheld 4,167 shares and 5,357 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 Loss, Net
Changes in each component of accumulated other comprehensive loss were as follows for the three months ended March 31, 2026 and 2025.
Securities
Defined
Cash
Available
Benefit
Flow
For Sale
Plan
Hedges
Accumulated other comprehensive (loss) income at December 31, 2025
(10,212)
(1,258)
304
Other comprehensive (loss) income arising during the period
(1,846)
(1,764)
Related income tax effects
388
(21)
367
61
(1,397)
Reclassifications into net income
(17)
(2)
(19)
(1)
(14)
Accumulated other comprehensive (loss) income at March 31, 2026
(11,670)
(1,271)
364
Accumulated other comprehensive (loss) income at December 31, 2024
(23,693)
(1,797)
886
Other comprehensive income (loss) arising during the period
5,835
(387)
5,448
(1,225)
100
(1,125)
(287)
4,323
(12)
Other comprehensive income (loss), net of tax
Accumulated other comprehensive (loss) income at March 31, 2025
(19,083)
(1,806)
598
19
The following table provides information regarding reclassifications from accumulated other comprehensive loss into net income for the three months ended March 31, 2026 and 2025.
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
(3)
Cash flow hedges:
Amortization of hedging gains into net income
Interest expense - Trust preferred capital notes
Earnings Per Share (EPS)
The components of the Corporation’s EPS calculations are as follows:
Weighted average shares outstanding—basic and diluted
3,248,485
3,234,935
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:
Weighted-
Average
Grant Date
Shares
Unvested, December 31, 2025
100,578
65.57
Granted
10,235
74.14
Vested
(10,123)
67.99
Forfeited
(210)
71.73
Unvested, March 31, 2026
100,480
66.18
Unvested, December 31, 2024
119,778
54.56
86.03
(12,810)
53.20
(1,710)
56.96
Unvested, March 31, 2025
113,808
57.04
The fair value of shares that vested during the three months ended March 31, 2026 and 2025 was $746,000 and $1.02 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 $514,000 ($377,000 after income taxes) and $461,000 ($271,000 after income taxes) for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, there was $3.90 million of total unrecognized compensation cost related to restricted stock granted under the plans, which is expected to be recognized through 2031, with a weighted-average remaining service period of 3 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
353
346
Other components of net periodic benefit cost:
Interest cost
228
218
Expected return on plan assets
(410)
(369)
Amortization of prior service credit
Recognized net actuarial losses
Other components of net periodic benefit cost, included in other noninterest expense
(199)
(163)
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, 2026 and December 31, 2025, the Corporation’s entire securities portfolio was comprised of investments in
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), London Stock Exchange Group (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 category 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 “Investment income from other equity interests” on the Consolidated Statements of 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, 2026 and December 31, 2025, the combined fair value of these investments was $1.63 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 $71,000 and $59,000 for the three months ended March 31, 2026 and 2025, 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, 2026 and December 31, 2025, the fair value of these investments was $4.41 million and $4.43 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 “Investment income from other equity interests” on the Consolidated Statements of Income and resulted in the recognition of unrealized gains of $301,000 and $148,000 for the three months ended March 31, 2026 and 2025, respectively. 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.
Rabbi trust assets. The Corporation’s rabbi trust holds assets intended to be used to fund the liability associated with its deferred compensation plan. The assets held by the rabbi trust are invested at the direction of the individual participants,
generally in marketable investment securities such as common stocks and mutual funds or short-term investments (e.g., cash), and are measured at fair value. Rabbi trust assets and the associated deferred compensation plan liability are included in other assets and other liabilities, respectively, in the Consolidated Balance Sheets. The Corporation’s rabbi trust assets are classified as Level 1.
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.
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, 2026 or December 31, 2025.
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
4,414
Rabbi trust assets
17,109
Derivatives
IRLC
1,284
Interest rate swaps on loans
2,485
602
535,524
552,632
Liabilities:
129
2,614
24
4,428
17,510
574
2,503
507,125
524,635
208
2,711
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. 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. At December 31, 2025, OREO was comprised of a property previously used by the Bank as a branch, which was consolidated into a nearby branch in 2024.
Collateral dependent loans. When a borrower is experiencing financial difficulty and repayment is expected substantially through the sale of the collateral, the loan is individually evaluated for purposes of estimating the allowance for credit losses and may be recorded at the fair value of the underlying collateral less estimated costs to sell. The level of the allowance for credit losses is recorded to reflect the net amount expected to be collected. The Corporation obtains an appraisal from independent licensed appraisers with relevant industry experience. When a collateral dependent loan is measured at fair value based solely on observable market prices or a current appraisal without further adjustments for unobservable inputs, the nonrecurring fair value measurement is classified as Level 2. The Corporation may adjust the appraised value based on recent sales of similar properties or general market conditions when appropriate and as such, records the collateral dependent loan where the borrower is experiencing financial difficulty as a nonrecurring fair value measurement classified as Level 3. At March 31, 2026 and December 31, 2025, the Corporation had no collateral dependent loans where the borrower is experiencing financial difficulty.
25
The following table presents the balances of assets measured at fair value on a nonrecurring basis at December 31, 2025. There were no assets measured at fair value on a nonrecurring basis at March 31, 2026.
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, 2026 Classified as
Total Fair
Value
Financial assets:
Cash and short-term investments
79,202
1,775
2,035,695
Financial liabilities:
Demand and savings deposits
1,476,152
922,137
95,501
91,933
Fair Value Measurements at December 31, 2025 Classified as
79,916
2,008,199
1,449,356
895,898
105,493
102,881
Forward sales of TBA securities
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 4.1 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, 2026
Community
Mortgage
Banking
Eliminations
Consolidated
26,172
540
12,218
216
10,335
1,102
Net interest income before allocation
15,837
(1,102)
Net interest allocation1
5,784
(232)
(5,552)
21,621
6,666
Gain on sales of loans
2,729
(184)
Other noninterest income
1,705
(300)
6,005
Net revenue
26,117
4,742
6,820
(1,402)
(18)
36,259
10,117
2,262
2,032
Occupancy expense
1,854
215
2,473
321
640
380
31
420
112
360
474
Provision for indemnifications
Other segment items2
1,157
415
93
1,836
Total noninterest expense
17,080
3,522
3,628
103
Income (loss) before taxes
8,737
1,220
(1,505)
Income tax expense (benefit)
1,627
310
(27)
(360)
Net income (loss)
7,110
910
(1,145)
Other data:
Capital expenditures
320
322
831
30
Three Months Ended March 31, 2025
23,384
339
12,123
10,381
13,003
(597)
5,754
(72)
(5,682)
18,757
267
6,441
1,985
(138)
4,230
1,136
177
222
(39)
5,726
22,987
3,388
6,618
(375)
32,583
9,279
1,792
1,977
435
1,830
213
2,342
226
290
724
91
80
384
140
230
411
1,215
436
1,918
16,232
2,809
3,405
630
6,655
579
313
(1,005)
1,210
148
(312)
5,445
431
(693)
236
875
33
At March 31, 2026:
2,695,814
64,422
466,309
33,027
(445,824)
Total loans held for investment, net
1,596,841
438,546
Total loans held for sale
56,598
(478)
2,415,510
(16,054)
At December 31, 2025:
2,651,694
51,275
469,942
31,218
(435,635)
1,569,530
442,016
3,353
44,286
(3,375)
2,359,650
(13,927)
29
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 $495.69 million at March 31, 2026 and $443.28 million at December 31, 2025, 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
1,600
1,800
1,750
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 $21.57 million at March 31, 2026 and $22.21 million at December 31, 2025.
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, 2026 and 2025, the Corporation recorded net reversals of provision for indemnifications of $35,000 and $25,000, respectively, which is included in “Noninterest Expenses – Other” on the Consolidated Statements of Income.
No indemnification payments were made during the three months ended March 31, 2026 and 2025. The allowance for indemnifications was $1.12 million and $1.16 million at March 31, 2026 and December 31, 2025, 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 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.
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, 2026, 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, 2026, the mortgage banking segment had $90.93 million of IRLCs and $56.12 million of unpaid principal on mortgage loans held for sale for which it managed interest rate risk using best-efforts forward sales contracts for $147.05 million in mortgage loans.
At December 31, 2025, the mortgage banking segment had $44.64 million of IRLCs and $40.91 million of unpaid principal on mortgage loans held for sale for which it managed interest rate risk using best-efforts forward sales contracts for $85.55 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
82,972
2,343
Matched interest rate swaps with counterparty
Mortgage banking contracts:
IRLCs
90,933
83,462
224
2,279
44,642
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, 2026 and December 31, 2025, 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.”
Licenses and taxes expense
305
Telecommunication expenses
298
Postage and courier expenses
276
260
Travel and educational expenses
266
Other components of net periodic pension cost
All other noninterest expenses
866
879
NOTE 14: Subsequent Events
On May 7, 2026, the Corporation announced that it had completed the sale (the Transaction) of its membership interest in Bearing Insurance Group, LLC to an unaffiliated third party, effective May 1, 2026. The Corporation’s equity investment is included in “Other Assets” in the Consolidated Balance Sheets. Based solely on information available to the Corporation on the date hereof, the Corporation estimates that a pre-tax gain of approximately $8.3 million will be recognized on the Transaction, which will be included in the Corporation’s financial results for the second quarter of 2026.
Following the completion of the Transaction, the Corporation executed a strategic restructuring of a portion of its securities available for sale portfolio which will result in a pre-tax loss of approximately $7.1 million, which will be included in the Corporation’s financial results for the second quarter of 2026. The Corporation sold securities available for sale with a book value of $72.6 million and purchased approximately $67.8 million of securities available for sale.
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)
Consolidated net income
Earnings per share - basic and diluted
Return on average assets
0.97
%
0.84
Return on average equity
10.19
9.35
Return on average tangible common equity (ROTCE)1
11.28
10.65
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 $1.4 million for the first quarter of 2026 compared to the same period in 2025 due primarily to higher net income at the community banking and mortgage banking segments, partially offset by a net loss at the consumer finance 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 2026 are as follows.
Subsequent to March 31, 2026, the Corporation completed the sale (Transaction) of its membership interest in Bearing Insurance Group, LLC to an unaffiliated third party, effective May 1, 2026. Following the completion of Transaction, the Corporation executed a strategic restructuring of a portion of its securities available for sale portfolio. For more information on these transactions, each of which will impact the Corporation’s financial results for the second quarter of 2026, see Part I, Item 1, “Financial Statements” under the heading “Note 14: Subsequent Events” in this Quarterly Report on Form 10-Q.
Capital Management and Dividends
Total equity was $266.1 million at March 31, 2026 compared to $262.3 million at December 31, 2025. Under regulatory capital standards, the Corporation’s tier 1 risk-based capital and total risk-based capital ratios at March 31, 2026 were 12.1 percent and 15.1 percent, respectively, compared to 12.2 percent and 15.2 percent, respectively, at December 31, 2025. At March 31, 2026, the book value per share of the Corporation’s common stock was $81.73 and tangible book value per share, which is a non-GAAP financial measure, was $73.70, compared to $80.64 and $72.60, respectively, at December 31, 2025.
Total consolidated equity increased $3.8 million at March 31, 2026 compared to December 31, 2025 due primarily to net income, partially offset by dividends paid on the Corporation’s common stock and higher net unrealized losses in the market value of securities available for sale, which are recognized as a component of other comprehensive income. 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, increased to $11.7 million at March 31, 2026, compared to $10.2 million at December 31, 2025 due primarily to fluctuations in debt security market interest rates.
The Corporation’s Board of Directors declared a quarterly cash dividend of 48 cents per share during the first quarter of 2026, which was paid on April 1, 2026. This dividend represents a payout ratio of 23.1 percent of earnings per share for the first quarter of 2026. 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, effective January 1, 2026 through December 31, 2026, that was authorized by the Board of Directors to repurchase up to $5.0 million of the Corporation’s common stock (the 2026 Repurchase Program). During the first quarter of 2026, the Corporation repurchased 4,279 shares, or $309,000, of its common stock under the 2026 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 the twelve-month forecast of the national unemployment rate, which we believe to be indicative of risk factors related to the collectability of commercial and consumer loans. Forecasts of the national unemployment rate are derived from the Federal Open Markets Committee of the Federal Reserve Board. For periods beyond those for which reasonable and supportable forecasts are available, projections are based on a reversion of the national unemployment rate from the last forecast to a historical average level over the following six months. In addition, management’s estimate of expected credit losses is based on the remaining life of loans held for investment, which is affected in part by changes in expected prepayment behavior and in the nature and volume of the loan portfolio. Management also assesses the risk of credit losses arising from external factors, such as changes in general market, economic and business conditions and the value of underlying collateral, to make qualitative adjustments 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. These factors outside of the Corporation’s control are difficult to predict and can have significant impacts on the level of allowance that is required, which can be different than the level recorded based on the then-existing loan portfolio, unemployment rate forecast and other external factors that were used in the qualitative adjustments at that time.
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 during the twelve-month forecast period and changes in current conditions or reasonably expected future conditions affecting the collectability of loans. Given the relationship between external variables used in the forecast and the qualitative adjustments made based on the assessment of available information relevant to assessing collectability that is not captured in the forecast, it is difficult to estimate the impact of a change in any one individual variable on the allowance for credit losses. The impact of a change in an assumption or input may be amplified by or partially offset by the impact of a change in another assumption or input.
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, 2025.
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, 2026 and 2025. 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 for all periods presented.
TABLE 2: Average Balances, Income and Expense, Yields and Rates
Income/
Yield/
Expense
Rate
Loans:
Community banking segment
1,602,769
22,004
5.57
1,467,555
19,966
5.52
Mortgage banking segment
38,738
5.65
20,968
6.56
Consumer finance segment
464,541
10.67
465,526
10.56
Total loans
2,106,048
34,762
6.69
1,954,049
32,428
6.73
Securities:
Taxable
344,936
2,686
3.11
339,450
2.58
Tax-exempt
131,702
1,385
4.21
119,033
1,153
3.87
Total securities
476,638
4,071
3.42
458,483
2.92
79,426
3.32
55,830
3.65
Total earning assets
2,662,112
39,484
6.01
2,468,362
36,276
5.95
Allowance for credit losses
(40,516)
(40,605)
Total non-earning assets
170,659
154,554
2,792,255
2,582,311
Liabilities and Equity
Interest-bearing deposits:
Interest-bearing demand deposits
351,066
621
0.72
332,341
600
0.67
Savings and money market deposit accounts
550,647
1,642
1.21
489,217
1,205
1.00
908,808
3.39
821,949
3.93
Total interest-bearing deposits
1,810,521
9,849
2.21
1,643,507
9,769
2.40
Borrowings:
Repurchase agreements
28,192
1.59
Other borrowings
112,324
1,588
5.66
93,597
4.69
Total borrowings
121,789
1,209
3.97
Total interest-bearing liabilities
1,922,845
2.41
1,765,296
2.51
558,877
545,346
43,770
40,874
2,525,492
2,351,516
266,763
230,795
28,047
25,298
Interest rate spread
3.60
3.44
Interest expense to average earning assets
1.74
1.79
Net interest margin
4.27
4.16
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 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, 2026 from 2025
Increase (Decrease)
Due to
Increase
Volume
(Decrease)
Interest income:
1,855
2,038
(52)
253
201
122
95
Securities - available for sale:
457
127
232
(48)
197
149
767
2,441
3,208
Interest expense:
274
163
437
(1,165)
787
(378)
(56)
(112)
249
242
(686)
1,145
459
Change in net interest income
1,453
1,296
2,749
Net interest income, on a taxable-equivalent basis, for the first quarter of 2026 increased to $28.0 million compared to $25.3 million for the same period in 2025 due primarily to higher average balances of interest-earning assets and higher net interest margin. Annualized net interest margin increased 11 basis points to 4.27 percent for the first quarter of 2026 compared to the same period of 2025 due primarily to higher average interest rates on securities and lower average interest rates on deposits, partially offset by higher average cost of borrowings. The Federal Reserve Bank (FRB) target federal funds interest rate was at an upper limit of 4.50 percent at December 31, 2024 until the FRB began decreasing it in September 2025, decreasing it to 3.75 percent by December 31, 2025, where it remained during the first quarter of 2026. The yield on interest-earning assets increased by 6 basis points for the first quarter of 2026 compared to the same period in 2025. The cost of interest-bearing liabilities decreased by 10 basis points for the first quarter of 2026 compared to the same period in 2025. Average earning assets increased $193.8 million for the first quarter of 2026 compared to the same period in 2025. Average interest-bearing liabilities increased $157.5 million for the first quarter of 2026 compared to the same period in 2025. Average noninterest-bearing demand deposits increased $13.5 million for the first quarter of 2026 compared to the same period in 2025.
Average loans, which includes both loans held for investment and loans held for sale, increased $152.0 million to $2.11 billion for the first quarter of 2026 compared to the same period in 2025. Average loans at the community banking segment increased $135.2 million, or 9.2 percent, for the first quarter of 2026 compared to the same period in 2025 due primarily to growth in the commercial real estate, land acquisition and development, and equity lines segments of the loan portfolio. Average loans at the consumer finance segment decreased $1.0 million, or less than one percent, for the first quarter of 2026 compared to the same period in 2025 due primarily to a decrease in marine and recreational vehicle loans as the third party administrator of that program significantly decreased sales of those loans to outside parties during 2025, which led to the consumer finance segment ending future purchases under the program during the third quarter of 2025. The marine and recreational vehicle (RV) portfolio is expected to run off over the next several years as scheduled borrower payments are made on the existing loans. Average loans at the mortgage banking segment, which consist of loans held for sale, increased $17.8 million, or 84.7 percent, for the first quarter of 2026 compared to the same period in 2025.
38
The community banking segment average loan yield increased 5 basis points to 5.57 percent for the first quarter of 2026 compared to the same period in 2025 due primarily to renewals of fixed rate loans originated during periods of lower interest rates. The consumer finance segment average loan yield increased 11 basis points to 10.67 percent for the first quarter of 2026 compared to the same period in 2025 due primarily to a mix shift in the loan portfolio with the termination of the marine and RV loans program and the portfolio composition in general shifting towards originations within the past three years, when interest rates were higher, as balances on loans originated prior to that in periods of lower interest rates decline. The mortgage banking segment average loan yield decreased 91 basis points to 5.65 percent for the first quarter of 2026 compared to the same period in 2025 due to fluctuations in mortgage interest rates.
Average securities available for sale increased $18.2 million to $476.6 million for the first quarter of 2026 compared to the same period in 2025 due primarily to purchases of corporate debt and mortgage-backed securities outpacing maturities, calls and paydowns. The average yield on the securities portfolio on a taxable-equivalent basis increased 50 basis points to 3.42 percent for the first quarter of 2026 compared to the same period in 2025 due primarily to purchases of securities during recent periods at higher average yields relative to the average yield of the portfolio as a whole.
Average interest-bearing deposits in other banks, consisting primarily of excess cash reserves maintained at the FRB, increased $23.6 million to $79.4 million for the first quarter of 2026 compared to the same period in 2025. The average yield on interest-bearing deposits in other banks decreased 33 basis points for the first quarter of 2026 due primarily to the decreases in the federal funds interest rate beginning in September 2025.
Average savings and money market and interest-bearing demand deposits combined increased $80.2 million to $901.7 million for the first quarter of 2026 compared to the same period in 2025. Average noninterest-bearing demand deposits increased $13.5 million to $558.9 million for the first quarter of 2026 compared to the same period in 2025. Average time deposits increased $86.9 million to $908.8 million for the first quarter of 2026 compared to the same period in 2025. The average cost of interest-bearing deposits decreased 19 basis points to 2.21 percent for the first quarter of 2026 compared to the same period in 2025 due primarily to decreases in interest rates paid on time deposits. A portion of the increases in average deposits was due to the wind-down of the repurchase agreement program with certain commercial deposit customers during the third quarter of 2025. The average balance of these repurchase agreements was $28.2 million at March 31, 2025.
Average borrowings decreased $9.5 million to $112.3 million for the first quarter of 2026 compared to the same period in 2025 due primarily the wind-down of the repurchase agreement program, partially offset by higher average balances of subordinated debt. The average cost of borrowings increased 169 basis points for the first quarter of 2026 compared to the same period in 2025 due primarily to higher rates paid on subordinated debt and a shift in the mix of borrowings. The Corporation issued new subordinated notes with an aggregate principal amount of $40.0 million in the second quarter of 2025, which initially bear interest at a fixed rate of 7.50%, and concurrently repurchased its previously issued subordinated notes with aggregate principal amount of $20.0 million, which were to transition from a fixed rate of 4.875% to a floating rate at the then current three-month SOFR plus 475.5 basis points during the third quarter of 2025.
The Corporation believes that the effects of declining market interest rates, if continued in 2026, 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 majority of the Corporation’s time deposits have repriced within the past year and while some further declines in the cost of deposits are anticipated as certain time deposits reprice following the Federal Reserve’s lowering of the target federal funds interest rate during the third and fourth quarters of 2025, significant further decreases are not expected unless there are additional decreases in market interest rates or shifts in the mix of deposits. 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 with higher interest rates. The interest rate environment has grown increasingly uncertain during the first quarter of 2026 and the ultimate effect of market factors, including monetary policy actions taken by the Federal Reserve, 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.
Noninterest Income
TABLE 4: Noninterest Income
Unrealized (loss) gain on investments held in rabbi trust
211
366
507
Total noninterest income increased $977,000, or 12.9 percent, for the first quarter of 2026 compared to the same period in 2025 due primarily to higher volume of mortgage loan production at the mortgage banking segment which resulted in higher gains on sales of loans and higher mortgage banking fee income, higher mortgage lender services income, and higher investment income from other equity interests, 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
14,669
13,272
(Decrease) increase in nonqualified deferred compensation plan liabilities
Total salaries and employee benefits
Other expenses:
Total other noninterest expenses
Total noninterest expenses increased $1.3 million, or 5.4 percent, in the first quarter of 2026 compared to the same period in 2025 due primarily to higher salaries and employee benefits due to the addition of a seasoned lending team with the expansion into Southwest Virginia in the third quarter of 2025, annual compensation adjustments, and higher commissions from increased volume of mortgage loan production, as well as higher data processing and loan processing and collection expenses, partially offset by fluctuations in deferred compensation liabilities.
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 18.6 percent for the first quarter of 2026 compared to 17.3 percent for the same period in 2025 due primarily to a higher share of income at the mortgage banking segment, which is subject to state income taxes, and lower income tax windfall related to the amount deductible upon vesting of restricted stock awards.
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
21,321
18,657
Noninterest income:
1,038
1,007
497
312
Noninterest expense:
Other expenses
The community banking segment reported net income of $7.1 million for the first quarter of 2026 compared to $5.4 million for the same period in 2025 due primarily to:
partially offset by:
Net interest income for the community banking segment increased by $2.9 million to $21.6 million for the first quarter of 2026 compared to the same period in 2025 due primarily to an increase in net interest margin and higher average balances of earning assets. Average interest-earning asset yields were higher for the first quarter of 2026 compared to the same period in 2025 due primarily to higher average interest rates on securities available for sale. The average cost of interest-
bearing liabilities were lower for the first quarter of 2026 compared to the same period in 2025 due primarily to decreases in 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 provision for credit losses of $300,000 for the first quarter of 2026 compared to provision for credit losses of $100,000 for the same period in 2025. Management believes that the level of the allowance for credit losses is adequate to reflect the net amount expected to be collected.
Noninterest income increased for the first quarter of 2026 compared to the same period in 2025 due primarily to higher investment income from other equity interests and higher interchange income. Noninterest expenses increased for the first quarter of 2026 compared to the same period in 2025 due primarily to higher salaries and employee benefits and higher data processing expenses.
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
882
592
Mortgage lender services fee income
541
Other income
4,434
3,121
The mortgage banking segment reported net income of $910,000 for the first quarter of 2026 compared to $431,000 for the same period in 2025 due primarily to:
43
The following table presents mortgage loan originations and mortgage loans sold for the periods indicated.
TABLE 8: Mortgage Loan Originations
Mortgage loan originations:
Purchases
142,526
101,640
Refinancings
37,076
12,110
Total mortgage loan originations1
179,602
113,750
Lock-adjusted originations2
223,066
142,340
Mortgage banking segment loan originations increased 57.9 percent for the first quarter of 2026 compared to the same period in 2025 as the mortgage interest rate environment has become more favorable, which led to an increase in both purchases and refinancings. 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 56.7 percent for the first quarter of 2026 compared to the same period in 2025. Locked loan commitments were $90.9 million at March 31, 2026 compared to $44.6 million and $71.8 million at December 31, 2025 and March 31, 2025, respectively. Mortgage banking segment loan 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 from 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 to $820,000 for the first quarter of 2026 compared to $541,000 for the same period in 2025 due primarily to increased mortgage loan volume in the industry.
During the first quarter of 2026, the mortgage banking segment recorded net reversals of provision for indemnification losses of $35,000 compared to net reversals of provision for indemnification losses of $25,000 for the same period in 2025. The release of indemnification reserves in 2026 and 2025 was due primarily to lower volume of mortgage loan originations in recent years compared to years prior when the indemnification reserve was increased due to higher volume coming out of the pandemic, 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.
44
Consumer Finance: The following table presents the consumer finance operating results for the periods indicated.
TABLE 9: Consumer Finance Segment Operating Results
3,366
3,541
The consumer finance segment reported a net loss of $81,000 for the first quarter of 2026 compared to net income of $226,000 for the same period in 2025 due primarily to:
Average loans decreased $1.0 million, or less than one percent, for the first quarter of 2026 compared to the same period in 2025 due primarily to a decrease in marine and recreational vehicle loans as the third party administrator of that program significantly decreased sales of those loans to outside parties during 2025, which led to the consumer finance segment ending future purchases under the program during the third quarter of 2025. The marine and recreational vehicle portfolio is expected to run off over the next several years as scheduled borrower payments are made on the existing loans. All interest expense at the consumer finance segment is from fixed and variable rate borrowings from the community banking segment. These transactions are eliminated to reach consolidated totals.
The consumer finance segment recorded $3.3 million in provision for credit losses for the first quarter of 2026 compared to $2.9 million for the same period in 2025. Net charge-offs increased due primarily to an increase in delinquent loans and repossessions. 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, 2026:
Average loans2
1,200,935
401,834
2,067,310
Ratio of annualized net (recoveries) charge-offs to average loans
(0.01)
0.03
2.98
For the three months ended March 31, 2025:
1,088,690
380,535
1,934,751
(0.00)
2.64
0.64
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:
58
57
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. The Corporation concluded that a credit loss did not exist in its securities portfolio at March 31, 2026, and no allowance for credit losses has been recognized. 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
48
TABLE 14: Credit Quality Indicators
Loans by credit quality indicators as of March 31, 2026 were as follows:
Special
Mention
Nonaccrual
Total1
Very Good
Fairly Good
Loans by credit quality indicators as of December 31, 2025 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, 2026 and December 31, 2025. The mortgage banking segment did not have any nonperforming assets as March 31, 2026 or December 31, 2025.
49
TABLE 15: Consolidated Credit Ratios
Total loans1
Nonaccrual loans
Allowance for credit losses (ACL)
Nonaccrual loans to total loans
0.10
ACL to total loans
1.91
1.93
ACL to nonaccrual loans
1,971.42
1,839.45
TABLE 16: Nonperforming Assets
Community Banking Segment
ACL
17,564
17,418
0.07
1.09
1.10
1,598.18
1,534.63
Annualized year-to-date net charge-offs to average total loans
0.00
0.01
Consumer Finance Segment
913
Repossessed assets
937
0.20
0.22
4.80
4.79
2,420.70
2,177.98
2.59
The community banking segment’s nonaccrual loans were $1.1 million at both March 31, 2026 and December 31, 2025. The community banking segment recorded a provision for credit losses of $300,000 for the first quarter of 2026 compared to a provision for credit losses of $100,000 for the same period in 2025. At March 31, 2026, the allowance for credit losses increased to $17.6 million compared to $17.4 million at December 31, 2025. The allowance for credit losses as a percentage of total loans decreased to 1.09 percent at March 31, 2026 from 1.10 percent at December 31, 2025. 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 $913,000 at March 31, 2026 compared to $1.0 million at December 31, 2025. 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
50
(i.e. the deficiency) is charged against the allowance for credit losses. At March 31, 2026, repossessed vehicles available for sale totaled $879,000 compared to $937,000 at December 31, 2025.
The consumer finance segment experienced net charge-offs at an annualized rate of 2.98 percent of average total loans for the first quarter of 2026 compared to 2.64 percent for the same period of 2025 due primarily to an increase in delinquent loans and repossessions. At March 31, 2026, total delinquent loans as a percentage of total loans was 3.35 percent compared to 4.38 percent at December 31, 2025 and 3.05 percent at March 31, 2025. The allowance for credit losses was $22.1 million, or 4.80 percent of total loans, at March 31, 2026 compared to $22.3 million, or 4.79 percent of total loans, at December 31, 2025.
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 1.34 percent of average automobile loans outstanding during the first quarter of 2026 compared to 2.50 percent during the fourth quarter of 2025 and 1.75 percent during the first quarter of 2025.
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 were also purchased on an indirect basis through a referral program administered by a third party. The marine and RV loan contracts were for “prime” loans averaging less than $50,000 made to individuals with higher credit scores. The third party administrator of that program significantly decreased sales of those loans to outside parties during 2025, which led to the consumer finance segment ending future purchases during the third quarter of 2025. The marine and RV portfolio is expected to run off over the next several years as scheduled borrower payments are made on the existing loans.
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, however, we cannot provide any assurances regarding the level of the consumer finance segment’s net charge-off ratio 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, 2026, the Corporation had total assets of $2.8 billion, an increase of $45.3 million since December 31, 2025. The increase was attributable primarily to growth in loans held for investment, loans held for sale and available for sale securities, 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 2026, loans held for investment increased $20.5 million to $2.04 billion at March 31, 2026 due primarily to growth in commercial real estate and land acquisition and development loans, partially offset by a decrease in construction loans at the community banking segment.
TABLE 18: Commercial Real Estate and Construction Commercial Real Estate Loans
% of Commercial Real Estate and Construction Commercial Real Estate Loans
% of Total
Multifamily
175,804
18.6
8.5
Retail
159,662
16.9
7.7
Office
122,183
12.9
5.9
1-4 family investment properties
105,083
11.1
5.1
Hotels
102,136
10.8
4.9
Industrial/warehouse
87,322
9.2
4.2
Mini-storage
69,409
7.3
3.3
Medical office
45,284
4.8
2.2
79,022
8.4
3.8
945,905
45.6
177,215
19.0
8.6
162,677
17.4
7.9
123,274
13.2
6.0
99,526
10.6
100,858
85,479
9.1
66,983
7.2
43,447
4.6
2.1
75,577
8.1
3.7
935,036
45.5
53
TABLE 19: Maturity/Repricing Schedule of Loans Held for Investment
Variable Rate:
Within 1 year
357,547
77,892
435,439
1 to 5 years
87,732
748
88,480
5 to 15 years
7,498
After 15 years
Fixed Rate:
117,658
7,897
4,559
130,114
412,923
110,058
220,517
743,498
213,705
167,037
235,570
616,312
13,542
40,169
53,711
1,210,605
403,801
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, 2026 and December 31, 2025, 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 2026, securities available for sale increased $12.5 million to $470.6 million at March 31, 2026 due primarily to an increase in mortgage-backed securities, partially offset by a decrease in U.S. government agencies and corporations securities. Net unrealized losses in the market value of securities available for sale increased to $14.8 million at March 31, 2026 compared to $12.9 million at December 31, 2025.
For more information about the Corporation’s securities available for sale, including information about securities in an unrealized loss position at March 31, 2026 and December 31, 2025, 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 was 3.7 years as of March 31, 2026.
TABLE 21: Maturity of Securities
Weighted
Yield 1
U.S. Treasury securities:
Maturing within 1 year
1.38
Total U.S. Treasury securities
U.S. government agencies and corporations:
6,607
1.63
Maturing after 1 year, but within 5 years
32,459
1.40
Maturing after 5 years, but within 10 years
18,438
2.04
Maturing after 10 years
1,101
2.46
Total U.S. government agencies and corporations
1.65
Mortgage-backed securities:
31,870
2.74
93,064
2.89
61,906
3.28
40,446
4.52
Total mortgage-backed securities
3.27
States and municipals:1
30,486
3.78
50,202
2.90
50,926
4.50
28,257
4.73
Total states and municipals
3.90
Corporate and other debt securities:
9,500
10,929
6.43
14,204
7.06
Total corporate and other debt securities
5.82
Total securities:
3.01
2.84
3.92
4.57
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 2026, deposits increased $53.7 million to $2.40 billion at March 31, 2026 due primarily to increases in time deposits and noninterest-bearing demand deposits. The increase in deposits was due in part to higher average balances within deposit accounts and the opening of new deposit accounts. The Corporation had $143.5 million in municipal deposits at March 31, 2026 compared to $162.4 million at December 31, 2025.
The Corporation had $18.0 million and $25.0 million in brokered time deposits outstanding at March 31, 2026 and December 31, 2025, respectively. 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 2026, borrowings decreased $10.0 million to $103.3 million at March 31, 2026 due primarily to the repayment of FHLB advances during the first quarter of 2026.
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 $428.9 million at March 31, 2026 compared to $406.4 million at December 31, 2025. The Corporation’s funding sources, including capacity, amount outstanding and amount available at March 31, 2026 are presented in Table 22. The Corporation’s capacity decreased $3.4 million from December 31, 2025 due primarily to fluctuations in loans pledged to the FRB and FHLB and the Corporation’s amount available increased $6.6 million from December 31, 2025 due primarily to the repayment of FHLB advances during the first quarter of 2026.
TABLE 22: Funding Sources
Capacity
Outstanding
Unsecured federal funds agreements
75,000
Borrowings from FHLB
282,641
30,000
252,641
Borrowings from FRB
353,760
711,401
681,401
276,703
40,000
236,703
363,100
714,803
674,803
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, 2026, the Corporation’s uninsured deposits were approximately $745.7 million, or 31.1 percent of total deposits. Excluding intercompany cash holdings and municipal deposits which are secured with pledged securities, amounts uninsured were approximately $578.4 million, or 24.1 percent of total deposits as of March 31, 2026, compared to $527.8 million, or 22.5 percent of total deposits as of December 31, 2025. The Corporation’s liquid assets and borrowing availability as of March 31, 2026 totaled $1.1 billion, exceeding uninsured deposits, excluding intercompany cash holdings and secured municipal deposits, by $531.9 million.
The Corporation’s internal policy limits brokered deposits to 20 percent of total deposits, representing approximately $577.4 million of additional net availability for additional brokered deposits as of March 31, 2026.
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, 2025.
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 was not subject to regulatory capital requirements at March 31, 2026. The following tables reflect 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, 2026 for the Corporation were $2.31 billion and for the Bank were $2.28 billion. Total risk-weighted assets at December 31, 2025 for the Corporation were $2.26 billion and for the Bank were $2.23 billion. As of March 31, 2026, the Bank met all capital adequacy requirements to which it is subject.
TABLE 23: Regulatory Capital
Minimum Capital
Well Capitalized
Actual
Requirements
Amount
Ratio
The Corporation
Total risk-based capital ratio
348,629
15.1
184,653
8.0
Tier 1 risk-based capital ratio
279,622
12.1
138,490
Common Equity Tier 1 capital ratio
254,622
11.0
103,867
4.5
Tier 1 leverage ratio
10.1
111,230
4.0
The Bank
334,896
14.7
182,430
228,037
10.0
306,232
13.4
136,822
102,617
148,224
6.5
110,342
137,928
5.0
342,856
15.2
180,649
274,469
12.2
135,487
249,469
101,615
110,060
330,859
14.8
178,421
223,026
302,815
13.6
133,816
100,362
144,967
109,173
136,466
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 $40.0 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, 2025.
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, 2026 and December 31, 2025.
The Corporation’s capital resources are impacted by its share repurchase programs. The Board of Directors authorized a program, effective January 1, 2026 through December 31, 2026, to repurchase up to $5.0 million of the Corporation’s common stock (the 2026 Repurchase Program). Repurchases under the 2026 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 2026 Repurchase Program. During the three months ended March 31, 2026, the Corporation repurchased 4,279 shares, or $309,000, of its common stock under the 2026 Repurchase Program. As of March 31, 2026, there was $4.7 million remaining available for repurchases of the Corporation’s common stock under the 2026 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 and fees on loans-FTE, interest and dividends 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
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
(896)
(1,118)
Average noncontrolling interest
(590)
(637)
Average tangible common equity
240,086
203,849
Amortization of intangibles
62
Net income attributable to noncontrolling interest
(47)
Net tangible income attributable to C&F Financial Corporation
6,772
5,430
Annualized return on average equity, as reported
Annualized return on average tangible common equity
59
Fully Taxable Equivalent Net Interest Income1
FTE adjustment
FTE interest and fees on loans
3,780
3,104
291
FTE interest and dividends on securities
338
288
FTE interest income
FTE net interest income
(Dollars in thousands except for per share amounts)
Tangible Book Value Per Share
Less goodwill
Less other intangible assets
(884)
(909)
Tangible equity attributable to C&F Financial Corporation
239,395
235,653
Shares outstanding
3,248,149
3,245,972
Book value per share
81.73
80.64
Tangible book value per share
73.70
72.60
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 and share repurchases; deposit trends; charge-offs and delinquencies; changes in cost of funds and net interest margin and items affecting net interest margin; strategic business initiatives, including our expansion into Southwest Virginia, and the anticipated effects thereof; changes in interest rates and the effects thereof on net interest income; expected impact of unrealized losses on earnings and regulatory capital of the Corporation or the Bank; expected renewal of unsecured federal funds agreements; expected impact of unrealized losses on earnings and regulatory capital of the Corporation or the Bank; mortgage loan originations; expectations regarding the Bank’s regulatory risk-based capital requirement levels; competition; our loan portfolio; our digital services; the adoption of artificial intelligence; deposit trends; improving operational efficiencies; retention of qualified loan officers and expectations regarding new mortgage loan originations; higher quality automobile loan contracts; expectations regarding the runoff of the marine and recreational vehicle portfolio; 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 on 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 and conditions; the effects of future interest rate levels and fluctuations; cybersecurity risks; inflation; statements regarding the Transaction, including the Corporation’s expected gain to be recognized on the Transaction, and statements regarding the Corporation’s strategic restructuring of its securities available for sale portfolio following completion of the Transaction. 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, 2025 and other reports filed with the SEC 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.
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, 2026, for hypothetical changes in net interest income over the next twelve months are presented in the following table.
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
(11,543)
(9.23)
(11,464)
(9.41)
-200 BP shock
(8,047)
(6.43)
(7,971)
(6.54)
-100 BP shock
(3,697)
(2.95)
(3,669)
(3.01)
+100 BP shock
1,165
0.93
1,233
1.01
+200 BP shock
2,282
1.82
2,177
+300 BP shock
3,319
2.65
3,010
2.47
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. As of March 31, 2026, the Corporation’s net interest income sensitivity to both an increase and decrease in market interest rates is similar to its position as of December 31, 2025 as the shifts in the mix of earning assets and in the mix of deposits and borrowings had minimal impact over the first three months of 2026.
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 following table.
Static EVE Change (dollars in thousands)
Hypothetical Change in EVE
(42,802)
(9.30)
(44,627)
(10.12)
(21,508)
(4.67)
(22,242)
(5.05)
(5,448)
(1.18)
(6,307)
(1.43)
(1,784)
(0.39)
(1,088)
(0.25)
(6,369)
(1.38)
(5,618)
(1.27)
(12,359)
(2.69)
(11,934)
(2.71)
These results as of March 31, 2026 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, 2026, the Corporation’s EVE is slightly less sensitive to a decrease in market interest rates and slightly more sensitive to an increase in market interest rates as compared to its position as of December 31, 2025 due primarily to changes in the duration of both assets and liabilities as a result of shifts in the mix of earning assets and in the mix of deposits and borrowings.
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, 2026 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, 2026 that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
In the normal course of business, the Corporation is subject to various legal and administrative proceedings and claims. Legal and administrative proceedings are subject to inherent uncertainties and unfavorable rulings could occur, and the timing and outcome of any legal or administrative proceeding cannot be predicted with certainty. As of March 31, 2026, the Corporation is not involved in any material pending or threatened legal proceedings other than proceedings occurring in the ordinary course of business.
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, 2025.
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, 2026 through December 31, 2026, to repurchase up to $5.0 million of the Corporation’s common stock (the 2026 Repurchase Program). Repurchases under the 2026 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 2026 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 2026 Repurchase Program. There were 4,279 shares repurchased under the 2026 Repurchase Program during the first quarter of 2026 for an aggregate cost of $309,000 under the 2026 Repurchase Program.
The following table summarizes repurchases of the Corporation’s common stock that occurred during the three months ended March 31, 2026.
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
Period
Shares Purchased1
per Share
Programs
January 1, 2026 - January 31, 2026
5,000,000
February 1, 2026 - February 28, 2026
596
77.07
March 1, 2026 - March 31, 2026
7,850
72.47
4,279
4,691,170
8,446
72.79
ITEM 5. OTHER INFORMATION
During the three months ended March 31, 2026, 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
The following financial statements from the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, 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)
The cover page from the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, 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 11, 2026
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)