EXHIBIT 99.1

 

 

 

Thursday,  October 25, 2018

 

 

Contact:

Tom Cherry, President

Jason Long, Chief Financial Officer 

 

(804) 843-2360

 

C&F Financial Corporation

Announces Record Third Quarter Net Income

 

West Point, Va., October 25, 2018—C&F Financial Corporation (the Corporation) (NASDAQ:CFFI), the one-bank holding company for C&F Bank, today reported record consolidated net income of $5.1 million for the third quarter of 2018, or $1.46 per share assuming dilution, compared with $3.0 million, or $0.87 per share assuming dilution, for the third quarter of 2017. The Corporation reported consolidated net income of $14.1 million for the first nine months of 2018, or $4.02 per share assuming dilution, compared with $9.9 million, or $2.84 per share assuming dilution, for the first nine months of 2017.

 

The Corporation’s annualized returns on average equity (ROE) and on average assets (ROA) for the third quarter of 2018 were 13.81 percent and 1.35 percent, respectively, compared to 8.26 percent and 0.82 percent, respectively, for the third quarter of 2017.  For the first nine months of 2018, on an annualized basis, the Corporation’s ROE and ROA were 13.02 percent and 1.24 percent, respectively, compared to 9.25 percent and 0.91 percent, respectively, for the first nine months of 2017.  The increases in ROE and ROA for the third quarter and first nine months of 2018, compared to the same periods in 2017, resulted from higher earnings.

 

“For the second consecutive quarter, we are reporting the highest quarterly net income in our Corporation’s history,” said Tom Cherry, President of C&F Financial Corporation,  “as each of our major business segments reported higher net income for the third quarter of 2018 compared to the third quarter of 2017. Consolidated net income for the third quarter of 2018 increased 69% over the third quarter of 2017, driven primarily by lower net charge-offs at the consumer finance segment, higher interest income from loans at the retail banking segment and the lower federal corporate income tax rate. Consolidated net income for the first nine months of 2018 increased 42% over the first nine months of 2017.”

 

Retail Banking Segment.  C&F Bank, which comprises the retail banking segment, reported net income of $3.2 million for the third quarter of 2018, compared to net income of $2.1 million for the third quarter of 2017. For the first nine months of 2018, C&F Bank reported net income of $7.9 million, compared to $6.0 million for the first nine months of 2017.

 

In addition to the favorable effect of the lower federal corporate income tax rate, positive factors influencing net income of C&F Bank for the third quarter of 2018 included: (1) higher interest income from loans, primarily due to (a) improvement in the performance of certain Central Virginia Bank (CVB) loans acquired in 2013, as discussed below, (b) higher yields on variable rate loans resulting from rising interest rates and (c) loan growth and (2) higher yields on excess cash balances. Partially offsetting these factors were (1) higher operating expenses associated with C&F Bank continuing to (a) strengthen its technology infrastructure, (b) expand its product offerings and (c) promote brand awareness and (2) an increase in average rates on interest-bearing customer deposits. In addition to these factors that affected net income for the third quarter of 2018, net income of C&F Bank for the first nine months of 2018 was negatively affected by (1) lower yields on securities resulting from continued purchasing in 2018 of securities with lower yields than the overall portfolio and shorter expected durations than the original durations of securities that have been called or have matured and (2) higher operating expenses associated with C&F Bank expanding its market presence in Charlottesville, Virginia and enhancing compliance processes.

 

The recognition of interest income on purchased credit impaired (PCI) loans is based on our expectation of future payments of principal and interest. Expectations of the timing and amount of future payments on certain CVB loans acquired in 2013 that are PCI loans have improved during 2018, resulting in an acceleration of the recognition of interest income in the third quarter of 2018 compared to the third quarter of 2017. Interest income recognized on PCI loans was $1.5 million and $2.9 

1


 

million for the third quarter and first nine months of 2018, respectively, compared to $0.5 million and $2.2 million for the third quarter and first nine months of 2017, respectively.

 

Average loans, excluding loans to affiliates, increased $22.6 million or 3.2 percent during the third quarter of 2018 and $32.3 million or 4.6 percent during the first nine months of 2018, compared to the same periods in 2017. C&F Bank’s total nonperforming assets were $2.9 million at September  30, 2018, compared to $5.4 million at December 31, 2017. Nonperforming assets at September  30, 2018 consisted primarily of $2.7 million in nonaccrual loans, compared to $5.3 million at December 31, 2017.  The decline in nonaccrual loans since December 31, 2017 resulted primarily from a partial repayment of one commercial relationship.

 

Mortgage Banking Segment.  C&F Mortgage Corporation, which comprises the mortgage banking segment, reported net income of $490,000 for the third quarter of 2018, compared to net income of $454,000 for the third quarter of 2017. For the first nine months of 2018, C&F Mortgage Corporation reported net income of $1.7 million, compared to net income of $1.4 million for the first nine months of 2017.

 

In addition to the favorable effect of the lower federal corporate income tax rate, the increase in net income of the mortgage banking segment for the third quarter and first nine months of 2018 was due primarily to a decrease in operating expenses compared to the same periods in 2017, resulting from operational efficiencies and management of personnel costs, partially offset by lower gains on sales of loans resulting from lower loan production.  Loan production decreased by 7.7 percent and 3.3 percent in the third quarter and first nine months of 2018, respectively, compared to the same periods in 2017, reflecting mortgage industry trends.

 

Consumer Finance Segment.  C&F Finance Company, which comprises the consumer finance segment, reported net income of $1.8 million for the third quarter of 2018, compared to net income of $713,000 for the third quarter of 2017. For the first nine months of 2018, C&F Finance Company reported net income of $5.4 million, compared to net income of $3.3 million for the first nine months of 2017. 

 

In addition to the favorable effect of the lower federal corporate income tax rate, positive factors influencing net income of C&F Finance Company for the third quarter and first nine months of 2018 included (1) a decline in the provision for loan losses of $2.0 million and $4.0 million for the third quarter and first nine months of 2018, respectively, compared to the same periods in 2017, as a result of lower charge-offs and improving credit quality of the portfolio, as discussed below, and (2) lower personnel and operating expenses resulting from underwriting efficiencies and the purchase of loan contracts with higher credit metrics. Partially offsetting these factors were (1) lower loan yields resulting from competition in the non-prime automobile loan business and the acquisition of loan contracts with higher credit metrics, as well as relatively lower yields on boat and recreational vehicle (RV) loans and (2) higher-cost variable-rate borrowings resulting from increases in short-term interest rates since the first quarter of 2017.

 

The annualized net charge-off ratio for the first nine months of 2018 decreased to 3.84 percent from 5.49 percent for the first nine months of 2017. The decline reflects a lower number of charge-offs during the first nine months of 2018. At September 30, 2018, total delinquent loans as a percentage of total loans was 4.30 percent, compared to 5.17 percent at December 31, 2017 and 4.64 percent at September  30, 2017. At September  30, 2018, repossessed vehicles available for sale totaled $331,000, compared to $250,000 at December 31, 2017 and $580,000 at September  30, 2017. The allowance for loan losses was $23.6 million, or 7.86 percent of total loans at September  30, 2018, compared to $24.4 million, or 8.34 percent of total loans at December 31, 2017. If factors influencing the consumer finance segment result in a higher net charge-off ratio in the future, or if the consumer finance segment’s loan portfolio should grow, the segment may need to increase the level of its allowance for loan losses,  which would negatively affect future earnings.

 

During the first quarter of 2018, C&F Finance Company began the expansion of its indirect lending programs to include boats and RVs. These contracts are for prime loans made to individuals with higher credit scores and are priced at rates substantially lower than its non-prime automobile portfolio. While these loans may contribute to net interest margin compression, management expects they will require both a lower provision for loan losses and allowance for loan losses than the consumer finance segment’s non-prime automobile loans, contributing to a decrease in the overall level of the consumer finance segment’s allowance for loan losses as a percentage of total loans. At September 30, 2018, compared to

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December 31, 2017, the higher composition within the consumer finance segment’s loan portfolio of boat and RV loans accounted for 25 basis points of the 48 basis points decrease in this ratio.

 

Other Segments. Other segments, which principally includes the Corporation’s holding company operations and wealth management subsidiary, reported aggregate net losses of $316,000 and $978,000 for the third quarter and first nine months of 2018, compared to net losses of $251,000 and $784,000 for the third quarter and first nine months of 2017.  The higher net loss during 2018, compared to 2017, was primarily due to the lower federal corporate income tax rate, resulting in a lower federal income tax benefit at the holding company.

 

Capital and Dividends.  The Corporation declared a quarterly cash dividend of 36 cents per share during the third quarter of 2018, which was paid on October 1, 2018, and cash dividends of $1.38 per share during the four quarters ended September 30, 2018.  The third quarter dividend, which represented an increase of 2 cents per share, or 5.9, percent compared to the prior quarter’s dividend, equated to a payout ratio of 24.7 percent of third quarter earnings per share. Dividends declared for the four quarters ended September 30, 2018 equated to 45 percent of net income during the same period, which included a  $6.6 million reduction in net income due to the remeasurement of deferred income taxes during the fourth quarter of 2017.  The Board of Directors of the Corporation continually reviews the amount of cash dividends per share and the resulting dividend payout ratio in light of changes in economic conditions, current and future capital requirements, and expected future earnings.

 

About C&F Financial Corporation.  C&F Financial Corporation’s common stock is listed for trading on The Nasdaq Stock Market under the symbol CFFI.  The common stock closed at a price of $49.72 per share on October 24, 2018.  At September  30, 2018, the book value of the Corporation was $42.72 per share.

 

C&F Bank operates 26 retail bank branches and three commercial loan offices located throughout the Hampton to Charlottesville corridor in Virginia and offers full investment services through its subsidiary C&F Wealth Management, Inc. C&F Mortgage Corporation provides mortgage loan origination services through offices located in Virginia, Maryland, North Carolina, South Carolina and West Virginia. C&F Finance Company provides automobile, boat and RV loans through indirect lending programs offered in Alabama, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Maryland, Minnesota, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and West Virginia through its offices in Richmond and Hampton, Virginia, and in Nashville, Tennessee.

 

Additional information regarding the Corporation’s products and services, as well as access to its filings with the Securities and Exchange Commission, are available on the Corporation’s web site at http://www.cffc.com.

 

Use of Certain Non-GAAP Financial Measures. The accounting and reporting policies of the Corporation conform to generally accepted accounting principles (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 the following fully-taxable equivalent (FTE) measures: interest income on loans-FTE, interest income on securities-FTE, total interest income-FTE and net interest income-FTE.

 

Management believes that FTE measures provide users of the Corporation’s financial information a presentation of the performance of interest earning assets on a basis that is comparable within the banking industry. Management reviews interest income of the Corporation on an FTE basis. In this non-GAAP presentation, interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis. This measure ensures the comparability of net interest income arising from both taxable and tax-exempt sources.

 

These non-GAAP financial measures should not be considered an alternative to GAAP-basis financial statements, and other bank holding companies may define or calculate these or similar measures differently. A reconciliation of the non-GAAP financial measures used by the Corporation to evaluate and measure the Corporation’s performance to the most directly comparable GAAP financial measures is presented below.

 

Forward-Looking Statements.    Statements in this press release which express “belief,” “intention,” “expectation,” “potential” and similar expressions, identify forward-looking statements. These forward-looking statements are based on the beliefs of the Corporation’s management, as well as assumptions made by, and information currently available to, the Corporation’s management. These statements are inherently uncertain, and there can be no assurance that the underlying

3


 

assumptions will prove to be accurate. Actual results could differ materially from those anticipated or implied by such statements. Forward-looking statements in this release may include, without limitation, statements regarding expected future financial performance, strategic business initiatives and the anticipated effects thereof, including the expansion of the indirect lending program to include boats and RVs, margin compression, development of our digital platform, asset quality, adequacy of allowances for loan losses and the level of future charge-offs, capital levels, the effect of future market and industry trends and the effects of future interest rate fluctuations. Factors that could have a material adverse effect on the operations and future prospects of the Corporation include, but are not limited to, changes in: (1) interest rates, such as volatility in yields on U.S. Treasury bonds and increases or volatility in mortgage rates, (2) general business conditions, as well as conditions within the financial markets, (3) general economic conditions, including unemployment levels, (4) the legislative/regulatory climate, regulatory initiatives with respect to financial institutions, products and services, the Consumer Financial Protection Bureau (CFPB) and the regulatory and enforcement activities of the CFPB, and the application of the Basel III capital standards to the Corporation and C&F Bank, (5) the effect of the Tax Cuts and Jobs Act (the Act) and changes in the effect of the Act due to issuance of interpretive regulatory guidance or enactment of corrective or supplemental legislation, (6) monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, and the effect of these policies on interest rates and business in our markets, (7) the value of securities held in the Corporation’s investment portfolios, (8) the quality or composition of the loan portfolios and the value of the collateral securing those loans, (9) the inventory level and pricing of used automobiles, including sales prices of repossessed vehicles, (10) the level of net charge-offs on loans and the adequacy of our allowance for loan losses, (11) the level of indemnification losses related to mortgage loans sold, (12) demand for loan products, (13) deposit flows, (14) the strength of the Corporation’s counterparties and the economy in general, (15) competition from both banks and non-banks, including competition in the non-prime automobile finance markets, (16) demand for financial services in the Corporation’s market area, (17) reliance on third parties for key services, (18) the commercial and residential real estate markets, (19) demand in the secondary residential mortgage loan markets, (20) the Corporation’s branch and market expansions and technology initiatives, (21) cyber threats, attacks or events, (22) expansion of C&F Bank’s product offerings and (23) accounting principles, policies and guidelines, and elections by the Corporation thereunder. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this release.  For additional information on risk factors that could affect the forward-looking statements contained herein, see the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 and other reports filed with the Securities and Exchange Commission.

4


 

C&F Financial Corporation

Selected Financial Information

(in thousands, except for share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Condition

  

9/30/2018

  

12/31/2017

  

9/30/2017

 

 

 

(unaudited)

 

 

*

 

  (unaudited)  

 

Interest-bearing deposits in other banks

 

$

96,709

 

$

105,353

 

$

97,845

 

Investment securities - available for sale, at fair value

 

 

217,114

 

 

218,976

 

 

208,993

 

Loans held for sale, at fair value

 

 

45,979

 

 

55,384

 

 

49,377

 

Loans, net:

 

 

 

 

 

 

 

 

 

 

Retail Banking segment

 

 

723,552

 

 

721,726

 

 

716,412

 

Mortgage Banking segment

 

 

2,493

 

 

2,685

 

 

2,740

 

Consumer Finance segment

 

 

276,378

 

 

267,651

 

 

267,659

 

Restricted stock, at cost

 

 

3,247

 

 

3,298

 

 

3,298

 

Total assets

 

 

1,499,604

 

 

1,509,056

 

 

1,484,646

 

Deposits

 

 

1,158,455

 

 

1,171,429

 

 

1,142,621

 

Repurchase agreements

 

 

15,030

 

 

20,621

 

 

18,657

 

Borrowings

 

 

144,766

 

 

147,239

 

 

147,230

 

Shareholders' equity

 

 

149,659

 

 

141,702

 

 

147,006

 

 

 

________________________

*Derived from audited consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For The

 

 

For The

 

 

 

Quarter Ended

 

 

Nine Months Ended

 

Results of Operations

    

9/30/2018

  

    

9/30/2017

  

    

9/30/2018

    

9/30/2017

 

 

 

(unaudited)

 

 

(unaudited)

 

Interest income

 

$

23,691

 

 

$

22,703

 

 

$

69,086

 

$

67,147

 

Interest expense

 

 

2,803

 

 

 

2,491

 

 

 

8,043

 

 

7,106

 

Provision for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail Banking segment

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

200

 

Mortgage Banking segment

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 -

 

Consumer Finance segment

 

 

2,400

 

 

 

4,435

 

 

 

7,700

 

 

11,735

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains on sales of loans

 

 

1,752

 

 

 

2,156

 

 

 

6,399

 

 

6,718

 

Other

 

 

4,875

 

 

 

4,686

 

 

 

13,915

 

 

13,813

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

10,967

 

 

 

10,854

 

 

 

32,773

 

 

32,838

 

Other

 

 

7,707

 

 

 

7,517

 

 

 

23,201

 

 

21,912

 

Income tax expense

 

 

1,340

 

 

 

1,231

 

 

 

3,620

 

 

4,000

 

Net income

 

 

5,101

 

 

 

3,017

 

 

 

14,063

 

 

9,887

 

Earnings per share - assuming dilution

 

 

1.46

 

 

 

0.87

 

 

 

4.02

 

 

2.84

 

Earnings per share - basic

 

 

1.46

 

 

 

0.87

 

 

 

4.02

 

 

2.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fully-taxable equivalent (FTE) amounts*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income on loans-FTE

 

 

21,679

 

 

 

20,985

 

 

 

63,135

 

 

62,078

 

Interest income on securities-FTE

 

 

1,670

 

 

 

1,818

 

 

 

4,980

 

 

5,575

 

Total interest income-FTE

 

 

23,876

 

 

 

23,117

 

 

 

69,659

 

 

68,454

 

Net interest income-FTE

 

 

21,073

 

 

 

20,626

 

 

 

61,616

 

 

61,348

 

 

 

________________________

*For more information about these non-GAAP financial measures, please see “Use of Certain Non-GAAP Financial Measures” and “Reconciliation of Certain Non-GAAP Financial Measures.”

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For The

 

 

For The

 

 

 

Quarter Ended

 

 

Nine Months Ended

 

Segment Information

    

9/30/2018

  

    

9/30/2017

  

  

9/30/2018

    

9/30/2017

 

 

 

(unaudited)

 

 

(unaudited)

 

Net Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail Banking

 

$

3,158

 

 

$

2,101

 

 

$

7,914

 

$

6,022

 

Mortgage Banking

 

 

490

 

 

 

454

 

 

 

1,704

 

 

1,358

 

Consumer Finance

 

 

1,769

 

 

 

713

 

 

 

5,423

 

 

3,291

 

Other

 

 

(316)

 

 

 

(251)

 

 

 

(978)

 

 

(784)

 

Mortgage loan originations - Mortgage Banking

 

 

191,062

 

 

 

206,921

 

 

 

538,704

 

 

556,829

 

Mortgage loans sold - Mortgage Banking

 

 

200,137

 

 

 

204,870

 

 

 

548,109

 

 

559,479

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For The

 

 

For The

 

 

 

Quarter Ended

 

 

Nine Months Ended

 

Average Balances

    

9/30/2018

  

    

9/30/2017

  

  

9/30/2018

    

9/30/2017

 

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits in other banks

 

$

112,071

 

 

$

105,241

 

 

$

123,208

 

$

108,163

 

Investment securities - available for sale, at amortized cost

 

 

221,893

 

 

 

209,484

 

 

 

221,153

 

 

209,819

 

Loans held for sale, at fair value

 

 

47,948

 

 

 

42,484

 

 

 

40,312

 

 

37,234

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail Banking segment

 

 

733,932

 

 

 

711,351

 

 

 

731,785

 

 

699,492

 

Mortgage Banking segment

 

 

3,244

 

 

 

3,485

 

 

 

3,329

 

 

3,294

 

Consumer Finance segment

 

 

298,332

 

 

 

291,693

 

 

 

294,961

 

 

294,996

 

Restricted stock, at cost

 

 

3,316

 

 

 

3,443

 

 

 

3,324

 

 

3,431

 

Total earning assets

 

 

1,420,736

 

 

 

1,367,181

 

 

 

1,418,072

 

 

1,356,429

 

Total assets

 

 

1,513,044

 

 

 

1,465,971

 

 

 

1,509,527

 

 

1,453,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time, checking and savings deposits

 

 

894,348

 

 

 

885,936

 

 

 

908,644

 

 

888,942

 

Borrowings

 

 

166,295

 

 

 

166,185

 

 

 

166,763

 

 

165,411

 

Total interest-bearing liabilities

 

 

1,060,643

 

 

 

1,052,121

 

 

 

1,075,407

 

 

1,054,353

 

Demand deposits

 

 

276,555

 

 

 

242,383

 

 

 

263,037

 

 

232,338

 

Shareholders' equity

 

 

147,704

 

 

 

146,028

 

 

 

143,942

 

 

142,509

 

 

 

 

6


 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

    

9/30/2018

    

12/31/2017

    

9/30/2017

 

 

 

(unaudited)

 

*

 

(unaudited)

 

Retail Banking

 

 

 

 

 

 

 

 

 

 

Loans, excluding purchased and affiliate loans

 

$

694,036

 

$

686,605

 

$

674,036

 

Purchased performing loans1

 

 

38,166

 

 

42,793

 

 

47,284

 

Purchased credit impaired loans1

 

 

2,148

 

 

3,103

 

 

5,958

 

Total loans

 

$

734,350

 

$

732,501

 

$

727,278

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

2,614

 

$

5,111

 

$

6,151

 

Purchased performing-nonaccrual loans

 

 

102

 

 

161

 

 

1,992

 

Total nonaccrual loans2

 

 

2,716

 

 

5,272

 

 

8,143

 

Other real estate owned (OREO)

 

 

188

 

 

168

 

 

168

 

Total nonperforming assets

 

$

2,904

 

$

5,440

 

$

8,311

 

 

 

 

 

 

 

 

 

 

 

 

Accruing loans past due for 90 days or more3  

 

$

581

 

$

306

 

$

199

 

 

 

 

 

 

 

 

 

 

 

 

Troubled debt restructurings (TDRs), excluding purchased loans2

 

$

6,420

 

$

9,748

 

$

8,876

 

Purchased performing TDRs

 

 

536

 

 

1,148

 

 

2,977

 

Total TDRs2

 

$

6,956

 

$

10,896

 

$

11,853

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses (ALL)

 

$

10,798

 

$

10,775

 

$

10,866

 

Nonperforming assets to loans and OREO

 

 

0.40

%  

 

0.74

%  

 

1.14

%  

ALL to total loans, excluding purchased credit impaired loans

 

 

1.47

%  

 

1.48

%  

 

1.51

%  

ALL to total nonaccrual loans

 

 

397.57

%  

 

204.38

%  

 

133.44

%  

Annualized net charge-offs to average loans

 

 

 -

%  

 

0.08

%  

 

0.09

%  

 

 

 

 

 

 

 

 

 

 

 

Mortgage Banking

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

37

 

$

39

 

$

39

 

Total Loans

 

$

3,091

 

$

3,283

 

$

3,338

 

ALL

 

$

598

 

$

598

 

$

598

 

Nonperforming loans to total loans

 

 

1.20

%  

 

1.19

%  

 

1.17

%  

ALL to loans

 

 

19.35

%  

 

18.22

%  

 

17.91

%  

 

 

 

 

 

 

 

 

 

 

 

Consumer Finance

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

1,025

 

$

764

 

$

797

 

Repossessed automobiles available for sale

 

$

331

 

$

250

 

$

580

 

Accruing loans past due for 90 days or more

 

$

 -

 

$

 -

 

$

 -

 

Total loans

 

$

299,941

 

$

292,004

 

$

292,530

 

ALL

 

$

23,563

 

$

24,353

 

$

24,871

 

Nonaccrual loans to total loans

 

 

0.34

%  

 

0.26

%  

 

0.27

%  

ALL to total loans

 

 

7.86

%  

 

8.34

%  

 

8.50

%  

Annualized net charge-offs to average total loans

 

 

3.84

%  

 

5.82

%  

 

5.49

%  

 

________________________

*  Derived from audited consolidated financial statements.

1

The loans acquired from CVB are tracked in two separate categories: “purchased performing” and “purchased credit impaired.” The remaining discount for the purchased performing loans was $2.0 million at 9/30/18, $2.3 million at 12/31/17 and $2.5 million at 9/30/17. The remaining discount for the purchased credit impaired loans was $8.1 million at 9/30/18,  $9.8 million at 12/31/17 and $9.9 million at 9/30/17.

2

Total nonaccrual loans include nonaccrual TDRs of $1.2 million at 9/30/18, $3.9 million at 12/31/17 and $6.6 million at 9/30/17.

3

Accruing loans past due for 90 days or more include purchased credit impaired loans of $78 thousand at 9/30/18, $90 thousand at 12/31/17 and $151 thousand at 9/30/17.

 

7


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Of and For The

 

 

As Of and For The

 

 

 

Quarter Ended

 

 

Nine Months Ended

 

Other Data and Ratios

    

9/30/2018

 

  

9/30/2017

 

  

9/30/2018

    

9/30/2017

 

 

 

(unaudited)

 

 

(unaudited)

 

Annualized return on average assets

 

 

1.35

%

 

 

0.82

%

 

 

1.24

%  

 

0.91

%

Annualized return on average equity

 

 

13.81

%

 

 

8.26

%

 

 

13.02

%  

 

9.25

%

Annualized net interest margin

 

 

5.88

%

 

 

5.98

%

 

 

5.81

%  

 

6.05

%

Dividends declared per share

 

$

0.36

 

 

$

0.33

 

 

$

1.04

 

$

0.99

 

Weighted average shares outstanding - assuming dilution

 

 

3,503,371

 

 

 

3,487,170

 

 

 

3,502,550

 

 

3,485,830

 

Weighted average shares outstanding - basic

 

 

3,503,371

 

 

 

3,487,170

 

 

 

3,502,550

 

 

3,485,725

 

Market value per share at period end

 

$

58.75

 

 

$

55.00

 

 

$

58.75

 

$

55.00

 

Book value per share at period end

 

$

42.72

 

 

$

42.16

 

 

$

42.72

 

$

42.16

 

Price to book value ratio at period end

 

 

1.38

 

 

 

1.30

 

 

 

1.38

 

 

1.30

 

Price to annualized earnings ratio at period end

 

 

10.17

 

 

 

16.03

 

 

 

10.95

 

 

14.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum Capital

Capital Ratios1

 

9/30/2018

 

12/31/2017

 

9/30/2017

  

Requirements2

 

 

(unaudited)

 

*

 

(unaudited)

 

 

 

 

C&F Financial Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk-weighted assets)

 

 

15.4

%

 

14.4

%

 

14.6

%

 

8.0

%

Tier 1 capital (to risk-weighted assets)

 

 

14.1

%

 

13.2

%

 

13.4

%

 

6.0

%

Common equity tier 1 capital (to risk-weighted assets)

 

 

12.0

%

 

11.1

%

 

11.2

%

 

4.5

%

Tier 1 capital (to average assets)

 

 

11.1

%

 

10.5

%

 

10.8

%

 

4.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C&F Bank

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk-weighted assets)

 

 

15.2

%

 

14.2

%

 

14.7

%

 

8.0

%

Tier 1 capital (to risk-weighted assets)

 

 

13.9

%

 

13.0

%

 

13.4

%

 

6.0

%

Common equity tier 1 capital (to risk-weighted assets)

 

 

13.9

%

 

13.0

%

 

13.4

%

 

4.5

%

Tier 1 capital (to average assets)

 

 

11.0

%

 

10.4

%

 

10.8

%

 

4.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

________________________

* Derived from audited financial statements.

1All ratios at September  30, 2018 are estimates and subject to change pending regulatory filings.  All ratios at September  30, 2017 are presented as filed.

2The ratios presented for minimum capital requirements are those to be considered adequately capitalized.

8


 

C&F Financial Corporation

Reconciliation of Certain Non-GAAP Financial Measures

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For The

 

 

For The

 

 

 

Quarter Ended

 

 

Nine Months Ended

 

 

 

9/30/2018

  

    

9/30/2017

  

    

9/30/2018

    

9/30/2017

 

 

 

(unaudited)

 

 

(unaudited)

 

Fully Taxable Equivalent Net Interest Income (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income on loans

 

$

21,673

 

 

$

20,971

 

 

$

63,116

 

$

62,036

 

FTE adjustment

 

 

 6

 

 

 

14

 

 

 

19

 

 

42

 

FTE interest income on loans

 

$

21,679

 

 

$

20,985

 

 

$

63,135

 

$

62,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income on securities

 

$

1,491

 

 

$

1,418

 

 

$

4,426

 

$

4,310

 

FTE adjustment

 

 

179

 

 

 

400

 

 

 

554

 

 

1,265

 

FTE interest income on securities

 

$

1,670

 

 

$

1,818

 

 

$

4,980

 

$

5,575

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income

 

$

23,691

 

 

$

22,703

 

 

$

69,086

 

$

67,147

 

FTE adjustment

 

 

185

 

 

 

414

 

 

 

573

 

 

1,307

 

FTE interest income

 

$

23,876

 

 

$

23,117

 

 

$

69,659

 

$

68,454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

20,888

 

 

$

20,212

 

 

$

61,043

 

$

60,041

 

FTE adjustment

 

 

185

 

 

 

414

 

 

 

573

 

 

1,307

 

FTE net interest income

 

$

21,073

 

 

$

20,626

 

 

$

61,616

 

$

61,348

 

 

________________________

(1)

Assuming a tax rate of 21% for the quarter and nine months ended September 30, 2018 and 34% for the quarter and nine months ended September  30, 2017.  

9


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