Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 04, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-23423 | |
Entity Registrant Name | C & F FINANCIAL CORP | |
Entity Incorporation, State or Country Code | VA | |
Entity Address, Address Line One | 3600 La Grange Parkway | |
Entity Address, City or Town | Toano | |
Entity Address, State or Province | VA | |
Entity Tax Identification Number | 54-1680165 | |
Entity Address, Postal Zip Code | 23168 | |
City Area Code | 804 | |
Local Phone Number | 843-2360 | |
Title of 12(b) Security | Common Stock, $1.00 par value per share | |
Trading Symbol | CFFI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 3,648,586 | |
Entity Central Index Key | 0000913341 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | [1] |
Assets | |||
Cash and due from banks | $ 15,774,000 | $ 21,148,000 | |
Interest-bearing deposits in other banks | 64,526,000 | 144,285,000 | |
Total cash and cash equivalents | 80,300,000 | 165,433,000 | |
Securities-available for sale at fair value, amortized cost of $241,178 and $187,759, respectively | 247,133,000 | 189,733,000 | |
Loans held for sale, at fair value | 180,137,000 | 90,500,000 | |
Loans, net of allowance for loan losses of $36,094 and $32,873, respectively | 1,292,896,000 | 1,082,318,000 | |
Restricted stock, at cost | 3,209,000 | 3,257,000 | |
Corporate premises and equipment, net | 39,458,000 | 35,261,000 | |
Other real estate owned, net of valuation allowance of $88 and $88, respectively | 1,103,000 | 1,103,000 | |
Accrued interest receivable | 8,104,000 | 6,776,000 | |
Goodwill | 25,191,000 | 14,425,000 | |
Other intangible assets, net | 2,457,000 | 912,000 | |
Bank-owned life insurance | 19,862,000 | 16,044,000 | |
Net deferred tax asset | 12,425,000 | 11,219,000 | |
Other assets | 70,929,000 | 40,451,000 | |
Total assets | 1,983,204,000 | 1,657,432,000 | |
Deposits | |||
Noninterest-bearing demand deposits | 464,703,000 | 296,985,000 | |
Savings and interest-bearing demand deposits | 688,545,000 | 572,209,000 | |
Time deposits | 492,541,000 | 422,056,000 | |
Total deposits | 1,645,789,000 | 1,291,250,000 | |
Short-term borrowings | 22,648,000 | 16,360,000 | |
Long-term borrowings | 43,390,000 | 119,529,000 | |
Trust preferred capital notes | 25,298,000 | 25,281,000 | |
Accrued interest payable | 1,210,000 | 1,291,000 | |
Other liabilities | 61,604,000 | 38,442,000 | |
Total liabilities | 1,799,939,000 | 1,492,153,000 | |
Commitments and contingent liabilities (Note 11) | |||
Equity | |||
Common stock ($1.00 par value, 8,000,000 shares authorized, 3,647,447 and 3,438,126 shares issued and outstanding, respectively, includes 137,705 and 142,020 of unvested shares, respectively) | 3,510,000 | 3,296,000 | |
Additional paid-in capital | 21,055,000 | 9,503,000 | |
Retained earnings | 158,799,000 | 154,248,000 | |
Accumulated other comprehensive loss, net | (638,000) | (2,249,000) | |
Equity attributable to C&F Financial Corporation | 182,726,000 | 164,798,000 | |
Noncontrolling interest | 539,000 | 481,000 | |
Total equity | 183,265,000 | 165,279,000 | |
Total liabilities and equity | $ 1,983,204,000 | $ 1,657,432,000 | |
[1] | Derived from audited consolidated financial statements. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
Available-for-sale securities, amortized cost | $ 241,178 | $ 187,759 |
Loans, allowance for loan losses | 36,094 | 32,873 |
Other real estate owned, valuation allowance | $ 88 | $ 88 |
Common stock par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 8,000,000 | 8,000,000 |
Common stock, shares issued | 3,647,447 | 3,438,126 |
Common stock, shares outstanding | 3,647,447 | 3,438,126 |
Common stock, unvested shares | 137,705 | 142,020 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest income | ||||
Interest and fees on loans | $ 22,204 | $ 22,323 | $ 45,101 | $ 43,243 |
Interest on interest-bearing deposits and federal funds sold | 52 | 582 | 650 | 1,171 |
Interest and dividends on securities | ||||
U.S. government agencies and corporations | 120 | 101 | 246 | 202 |
Mortgage-backed securities | 543 | 567 | 1,063 | 1,178 |
Tax-exempt obligations of states and political subdivisions | 513 | 556 | 1,009 | 1,139 |
Taxable obligations of states and political subdivisions | 108 | 93 | 200 | 186 |
Other | 44 | 54 | 93 | 108 |
Total interest income | 23,584 | 24,276 | 48,362 | 47,227 |
Interest expense | ||||
Savings and interest-bearing deposits | 355 | 597 | 941 | 1,199 |
Time deposits | 2,131 | 1,624 | 4,430 | 2,930 |
Borrowings | 557 | 1,120 | 1,558 | 2,231 |
Trust preferred capital notes | 287 | 310 | 576 | 595 |
Total interest expense | 3,330 | 3,651 | 7,505 | 6,955 |
Net interest income | 20,254 | 20,625 | 40,857 | 40,272 |
Provision for loan losses | 3,600 | 1,810 | 6,250 | 4,205 |
Net interest income after provision for loan losses | 16,654 | 18,815 | 34,607 | 36,067 |
Noninterest income | ||||
Gains on sales of loans | 4,605 | 2,955 | 8,281 | 5,091 |
Mortgage banking fee income | 1,986 | 1,267 | 3,291 | 2,037 |
Interchange income | 1,141 | 1,071 | 2,230 | 2,029 |
Service charges on deposit accounts | 639 | 944 | 1,641 | 1,862 |
Wealth management services income, net | 748 | 475 | 1,333 | 924 |
Other service charges and fees | 394 | 417 | 769 | 715 |
Net gains on sales, maturities and calls of available for sale securities | 3 | 1 | 7 | 5 |
Other | 2,312 | 1,072 | 1,024 | 2,642 |
Total noninterest income | 11,828 | 8,202 | 18,576 | 15,305 |
Noninterest expenses | ||||
Salaries and employee benefits | 14,354 | 11,495 | 25,171 | 23,402 |
Occupancy | 2,567 | 2,148 | 4,894 | 4,338 |
Other | 6,871 | 5,906 | 13,812 | 11,486 |
Total noninterest expenses | 23,792 | 19,549 | 43,877 | 39,226 |
Income before income taxes | 4,690 | 7,468 | 9,306 | 12,146 |
Income tax expense | 947 | 1,626 | 1,924 | 2,533 |
Net income | 3,743 | 5,842 | 7,382 | 9,613 |
Less net (loss) income attributable to noncontrolling interest | (3) | (1) | 58 | (1) |
Net income attributable to C&F Financial Corporation | $ 3,746 | $ 5,843 | $ 7,324 | $ 9,614 |
Net income per share - basic and diluted (in dollars per share) | $ 1.03 | $ 1.69 | $ 2.01 | $ 2.77 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||
Net income | $ 3,743 | $ 5,842 | $ 7,382 | $ 9,613 | |
Defined benefit plan: | |||||
Reclassification of recognized net actuarial losses into net income | [1],[2] | 57 | 52 | 99 | 94 |
Related income tax effects | (12) | (11) | (21) | (20) | |
Amortization of prior service credit into net income | [1],[2] | (17) | (17) | (34) | (34) |
Related income tax effects | 3 | 3 | 7 | 7 | |
Defined benefit plan, net of tax | 31 | 27 | 51 | 47 | |
Cash flow hedges: | |||||
Unrealized holding losses arising during the period | (154) | (102) | (2,128) | (210) | |
Related income tax effects | 39 | 26 | 547 | 54 | |
Amortization of hedging gains into net income | [3] | (3) | (6) | ||
Related income tax effects | 1 | 2 | |||
Cash flow hedges, net of tax | (117) | (76) | (1,585) | (156) | |
Securities available for sale: | |||||
Unrealized holding gains arising during the period | 1,779 | 1,547 | 3,988 | 3,373 | |
Related income tax effects | (373) | (325) | (837) | (708) | |
Reclassification of net realized gains into net income | [4] | (3) | (1) | (7) | (5) |
Related income tax effects | 1 | 1 | |||
Securities available for sale, net of tax | 1,403 | 1,221 | 3,145 | 2,661 | |
Other comprehensive income, net of tax | 1,317 | 1,172 | 1,611 | 2,552 | |
Comprehensive income | 5,060 | 7,014 | 8,993 | 12,165 | |
Less comprehensive (loss) income attributable to noncontrolling interest | (3) | (1) | 58 | (1) | |
Comprehensive income attributable to C&F Financial Corporation | $ 5,063 | $ 7,015 | $ 8,935 | $ 12,166 | |
[1] | These items are included in the computation of net periodic benefit cost and are included in “Noninterest income – Other” on the Consolidated Statements of Income. See “Note 8: Employee Benefit Plans,” for additional information. | ||||
[2] | These items are included in the computation of net periodic benefit cost and are included in “Noninterest income – Other” on the Consolidated Statements of Income. See “Note 8: Employee Benefit Plans,” for additional information. | ||||
[3] | These items are included in “Interest expense – Trust preferred capital notes” on the Consolidated Statements of Income. | ||||
[4] | These items are included in “Net gains on sales, maturities and calls of available for sale securities” on the Consolidated Statements of Income. |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss, Net | Noncontrolling Interest | Total | |
Balance, beginning of the period at Dec. 31, 2018 | $ 3,358 | $ 12,752 | $ 140,520 | $ (4,672) | $ 151,958 | ||
Balance, end of period at Mar. 31, 2019 | 3,337 | 11,362 | 143,003 | (3,292) | $ 490 | 154,900 | |
Balance, beginning of the period at Dec. 31, 2018 | 3,358 | 12,752 | 140,520 | (4,672) | 151,958 | ||
Comprehensive income: | |||||||
Net income (loss) | 9,614 | (1) | 9,613 | ||||
Other comprehensive income | 2,552 | 2,552 | |||||
Issuance of noncontrolling interest | 490 | 490 | |||||
Share-based compensation | 767 | 767 | |||||
Restricted stock vested | 16 | (16) | |||||
Common stock issued | 1 | 69 | 70 | ||||
Common stock purchased | (70) | (3,465) | (3,535) | ||||
Cash dividends declared | (2,564) | (2,564) | |||||
Balance, end of period at Jun. 30, 2019 | 3,305 | 10,107 | 147,570 | (2,120) | 489 | 159,351 | |
Balance, beginning of the period at Mar. 31, 2019 | 3,337 | 11,362 | 143,003 | (3,292) | 490 | 154,900 | |
Comprehensive income: | |||||||
Net income (loss) | 5,843 | (1) | 5,842 | ||||
Other comprehensive income | 1,172 | 1,172 | |||||
Share-based compensation | 310 | 310 | |||||
Restricted stock vested | 1 | (1) | |||||
Common stock issued | 34 | 34 | |||||
Common stock purchased | (33) | (1,598) | (1,631) | ||||
Cash dividends declared | (1,276) | (1,276) | |||||
Balance, end of period at Jun. 30, 2019 | 3,305 | 10,107 | 147,570 | (2,120) | 489 | 159,351 | |
Balance, beginning of the period at Dec. 31, 2019 | 3,296 | 9,503 | 154,248 | (2,249) | 481 | 165,279 | [1] |
Comprehensive income: | |||||||
Net income (loss) | 7,324 | 58 | 7,382 | ||||
Other comprehensive income | 1,611 | 1,611 | |||||
Share-based compensation | 701 | 701 | |||||
Restricted stock vested | 16 | (16) | |||||
Acquisition of Peoples Bankshares, Incorporated | 210 | 11,402 | 11,612 | ||||
Common stock issued | 2 | 69 | 71 | ||||
Common stock purchased | (14) | (604) | (618) | ||||
Cash dividends declared | (2,773) | (2,773) | |||||
Balance, end of period at Jun. 30, 2020 | 3,510 | 21,055 | 158,799 | (638) | 539 | 183,265 | |
Balance, beginning of the period at Mar. 31, 2020 | 3,509 | 20,710 | 156,438 | (1,955) | 542 | 179,244 | |
Comprehensive income: | |||||||
Net income (loss) | 3,746 | (3) | 3,743 | ||||
Other comprehensive income | 1,317 | 1,317 | |||||
Share-based compensation | 312 | 312 | |||||
Common stock issued | 1 | 33 | 34 | ||||
Cash dividends declared | (1,385) | (1,385) | |||||
Balance, end of period at Jun. 30, 2020 | $ 3,510 | $ 21,055 | $ 158,799 | $ (638) | $ 539 | $ 183,265 | |
[1] | Derived from audited consolidated financial statements. |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
CONSOLIDATED STATEMENTS OF EQUITY | ||||
Cash dividends declared - common stock (in dollars per share) | $ 0.38 | $ 0.37 | $ 0.76 | $ 0.74 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | ||
Operating activities: | |||
Net income | $ 7,382,000 | $ 9,613,000 | |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Depreciation | 1,791,000 | 1,826,000 | |
Provision for loan losses | 6,250,000 | 4,205,000 | |
Share-based compensation | 701,000 | 767,000 | |
Pension expense | 396,000 | 324,000 | |
Accretion of certain acquisition-related discounts, net | (1,972,000) | (1,638,000) | |
Amortization of intangible assets | 166,000 | 141,000 | |
Net realized gains on sales, maturities and calls of securities available for sale | (7,000) | (5,000) | |
Net realized losses on sale of corporate premises and equipment | 509,000 | 11,000 | |
Accretion of discounts and amortization of premiums on securities, net | 941,000 | 811,000 | |
Income from bank-owned life insurance | (206,000) | (168,000) | |
Proceeds from sales of loans held for sale | 624,112,000 | 342,531,000 | |
Origination of loans held for sale | (698,740,000) | (385,581,000) | |
Gains on sales of loans held for sale | (8,281,000) | (5,091,000) | |
Other losses, net | 305,000 | 23,000 | |
Change in other assets and liabilities: | |||
Accrued interest receivable | (898,000) | 207,000 | |
Other assets | 929,000 | 1,731,000 | |
Accrued interest payable | (341,000) | 356,000 | |
Other liabilities | 208,000 | 2,425,000 | |
Net cash used in operating activities | (66,755,000) | (27,512,000) | |
Investing activities: | |||
Acquisition of Peoples Bankshares, Incorporated | 19,101,000 | ||
Disposition of assets related to business combination | 8,004,000 | ||
Proceeds from sales, maturities and calls of securities available for sale and payments on mortgage-backed securities | 70,780,000 | 33,639,000 | |
Purchases of securities available for sale | (107,964,000) | (16,594,000) | |
Purchases of time deposits, net | (6,464,000) | ||
Repayments on loans held for investment by non-bank affiliates | 62,462,000 | 60,675,000 | |
Purchases of loans held for investment by non-bank affiliates | (53,013,000) | (77,356,000) | |
Net increase in community banking loans held for investment | (102,276,000) | (14,717,000) | |
Proceeds from sales of other real estate owned | 281,000 | 521,000 | |
Purchases of corporate premises and equipment | (3,453,000) | (1,471,000) | |
Changes in collateral posted with other financial institutions, net | (9,270,000) | (2,100,000) | |
Other investing activities, net | 38,000 | 8,000 | |
Net cash used in investing activities | (121,774,000) | (17,395,000) | |
Financing activities: | |||
Net increase (decrease) in demand and savings deposits | 189,256,000 | (21,409,000) | |
Net (decrease) increase in time deposits | (6,394,000) | 49,957,000 | |
Net increase in short-term borrowings | 6,288,000 | 1,927,000 | |
Repayments of long-term borrowings | (82,553,000) | ||
Repurchases of common stock | (355,000) | (3,288,000) | |
Cash dividends paid | (2,773,000) | (2,564,000) | |
Other financing activities, net | (73,000) | (74,000) | |
Net cash provided by financing activities | 103,396,000 | 24,549,000 | |
Net decrease in cash and cash equivalents | (85,133,000) | (20,358,000) | |
Cash and cash equivalents at beginning of periods | 165,433,000 | [1] | 115,013,000 |
Cash and cash equivalents at end of period | 80,300,000 | 94,655,000 | |
Supplemental cash flow disclosures: | |||
Interest paid | 8,010,000 | 6,581,000 | |
Income taxes paid | 2,130,000 | 546,000 | |
Supplemental disclosure of noncash investing and financing activities | |||
Value of shares withheld at vesting for employee taxes | 263,000 | 247,000 | |
Liabilities assumed to acquire right of use assets at lease commencement | $ 2,778,000 | 1,048,000 | |
Issuance of noncontrolling interest | $ 490,000 | ||
[1] | Derived from audited consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | C&F FINANCIAL CORPORATION AND SUBSIDIARIES NOTE S TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1: Summary of Significant Accounting Policies Principles of Consolidation: The unaudited consolidated financial statements include the accounts of C&F Financial Corporation (the Corporation) and 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. The accounting and reporting policies of the Corporation conform to U.S. GAAP and to predominant practices within the banking industry. Nature of Operations: C&F Bank has five wholly-owned subsidiaries: C&F Mortgage Corporation (C&F Mortgage), C&F Finance Company (C&F Finance), C&F Wealth Management Corporation (C&F Wealth Management), C&F Insurance Services, Inc. and CVB Title Services, Inc., all incorporated under the laws of the Commonwealth of Virginia. C&F Mortgage, organized in September 1995, was formed to originate and sell residential mortgages and through its subsidiary, Certified Appraisals LLC, provides ancillary mortgage loan production services for residential appraisals. C&F Mortgage owns a 51 percent interest in C&F Select LLC, which was organized in January 2019 and is also engaged in the business of originating and selling residential mortgages. C&F Finance, acquired in September 2002, is a finance company purchasing automobile, marine and recreational vehicle (RV) loans through indirect lending programs. C&F Wealth Management, organized in April 1995, is a full-service brokerage firm offering a comprehensive range of wealth management services and insurance products through third-party service providers. C&F Insurance Services, Inc., was organized in July 1999, for the primary purpose of owning an equity interest in an independent insurance agency that operates in Virginia and North Carolina. CVB Title Services, Inc. was organized for the primary purpose of owning an equity interest in a full service title and settlement agency. Business segment data is presented in Note 10. Basis of Presentation: The outbreak of the novel coronavirus and the resulting COVID-19 pandemic has caused a significant disruption in economic activity worldwide, including in market areas served by the Corporation. Estimates for the allowance for loan losses at June 30, 2020 include losses related to the pandemic. The Corporation expects that the pandemic will continue to have an effect on its results of operations, including resulting in additional provision for loan losses in future periods. It is unknown how long these conditions will last and what the ultimate financial impact will be to the Corporation. Depending on the severity of the economic consequences of the pandemic, the Corporation’s goodwill may become impaired. Reclassification: Business Combination: Derivative Financial Instruments: Leases: The Corporation’s leases comprise primarily operating leases of real estate and office equipment in which the Corporation or one of its subsidiaries is the lessee. In the second quarter of 2020, the Corporation entered into a new lease of real estate which is classified as a finance lease. The right of use asset and lease liability were measured at June 30, December 31, (Dollars in thousands) 2020 2019 Operating leases: Right of use assets $ 2,491 $ 2,785 Lease liabilities 2,597 2,813 Finance leases: Right of use assets $ 2,172 $ — Lease liabilities 2,185 — Income Taxes: Share-Based Compensation: A summary of activity for restricted stock awards during the first six months of 2020 and 2019 is presented below: 2020 Weighted- Average Grant Date Shares Fair Value Unvested, December 31, 2019 142,020 $ 48.88 Granted 14,650 53.22 Vested (16,230) 39.97 Forfeited (2,735) 5.89 Unvested, June 30, 2020 137,705 50.33 2019 Weighted- Average Grant Date Shares Fair Value Unvested, December 31, 2018 139,455 $ 45.75 Granted 16,100 51.73 Vested (16,290) 41.08 Forfeited (410) 53.28 Unvested, June 30, 2019 138,855 46.97 Paycheck Protection Program: Recently Adopted Accounting Pronouncements: On January 1, 2020, the Corporation adopted Accounting Standards Update (ASU) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” Recent Significant Accounting Pronouncements: In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief Financial Instruments—Credit losses (Topic 326), Derivatives and hedging (Topic 815), and Leases (Topic 842)—Effective dates, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) Codification Improvements to Financial Instruments The new standard will be effective for the Corporation beginning on January 1, 2023. Early adoption of the new standard is permitted. The amendments of ASC 326, upon adoption, will be applied on a modified retrospective basis, with the cumulative effect of adopting the new standard being recorded as an adjustment to opening retained earnings in the period of adoption. The Corporation has established a working group to prepare for and implement changes related to ASC 326 and has gathered historical loan loss data for purposes of evaluating appropriate portfolio segmentation and modeling methods under the standard. The Corporation has performed procedures to validate the historical loan loss data to ensure its suitability and reliability for purposes of developing an estimate of expected credit losses under ASC 326. The Corporation has engaged a vendor to assist in modeling expected lifetime losses under ASC 326, and is continuing to develop and refine an approach to estimating the allowance for credit losses. The adoption of ASC 326 will result in significant changes to the Corporation’s consolidated financial statements, which may include changes in the level of the allowance for credit losses that will be considered adequate, a reduction in total equity and regulatory capital of C&F Bank, differences in the timing of recognizing changes to the allowance for credit losses and expanded disclosures about the allowance for credit losses. The Corporation has not yet determined an estimate of the effect of these changes. The adoption of the standard will also result in significant changes in the Corporation’s internal control over financial reporting related to the allowance for credit losses. In August 2018, the FASB issued ASU 2018-14, “Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” 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. |
Business Combination
Business Combination | 6 Months Ended |
Jun. 30, 2020 | |
Business Combination | |
Business Combination | NOTE 2: Business Combination On January 1, 2020, the Corporation completed its acquisition of Peoples. Peoples shareholders received 0.5366 shares of the Corporation’s common stock and $27.00 in cash for each share of Peoples common stock, with cash paid in lieu of any fractional shares of the Corporation’s common stock. In connection with the transaction, the Corporation paid aggregate cash consideration of $10.58 million and issued 209,871 shares of its common stock to the shareholders of Peoples. The Corporation accounted for the acquisition using the acquisition method of accounting in accordance with ASC 805, Business Combinations The following table presents as of January 1, 2020 the total consideration paid by the Corporation in connection with the acquisition of Peoples, the fair values of the assets acquired and liabilities assumed, and the resulting goodwill. Amounts Recognized as of (Dollars in thousands) January 1, 2020 Purchase price: Cash paid $ 10,579 Common stock issued 11,612 Total purchase price $ 22,191 Identifiable assets acquired: Cash and cash equivalents $ 29,680 Securities available for sale 17,169 Loans 124,195 Accrued interest receivable 430 Corporate premises and equipment 3,105 Other real estate owned 281 Core deposit intangible asset 1,711 Bank-owned life insurance 3,591 Investment in small business investment company 1,493 Other receivables 5,234 Other assets 3,658 Total identifiable assets acquired 190,547 Identifiable liabilities assumed: Demand and savings deposits 94,798 Time deposits 77,018 Borrowings 4,245 Accrued interest payable 260 Salaries, benefits and deferred compensation 2,054 Other liabilities 747 Total identifiable liabilities assumed 179,122 Net identifiable assets assumed $ 11,425 Goodwill resulting from acquisition $ 10,766 In connection with the acquisition, the Corporation recorded approximately $10.77 million of goodwill and $1.71 million of other intangible assets related to the core deposits of Peoples. The goodwill arising from the acquisition of Peoples is not deductible for income taxes. The core deposit intangible asset (CDI) will be amortized over a period of 15 years using a declining balance method. Loans acquired from Peoples had aggregate outstanding principal of $131.92 million and an estimated fair value of $124.20 million. The discount between the outstanding principal balance and fair value represents expected credit losses and adjustments for market interest rates. Under the acquisition method, the allowance for loan losses recorded in the books of Peoples in the amount of $2.87 million was not carried over into the books of the Corporation. Loans that have evidence of deterioration in credit quality since origination are categorized as purchased credit impaired (PCI). PCI loans acquired from Peoples included medical student loans with an outstanding principal balance of $4.28 million and a fair value of $635,000 at January 1, 2020, which were purchased by Peoples and the performance of which was previously backed by surety bonds. The surety bonds were terminated in 2018 when the issuer of the bond was placed into liquidation by its insurance regulator, and replacement surety bond coverage has not been obtained. Information about PCI loans acquired from Peoples as of January 1, 2020 is as follows: (Dollars in thousands) January 1, 2020 Contractual principal and interest due $ 20,310 Nonaccretable difference (7,679) Expected cash flows 12,631 Accretable yield (3,372) Purchase credit impaired loans - estimated fair value $ 9,259 Fair values of the major categories of assets acquired and liabilities assumed were determined as follows: Loans: Core Deposit Intangible: Deposits: The following table presents certain unaudited pro forma information as if the acquisition had taken place on January 1, 2019. These results combine the historical results of Peoples and the Corporation for the period prior to the merger. While certain adjustments were made for estimated effects resulting from the application of the acquisition method, including certain fair value adjustments, this pro forma information is not indicative of what would have occurred had the acquisition actually taken place on January 1, 2019. Pro forma adjustments for the three and six months ended June 30, 2019 include the net impact of accretion of loan discounts related to market interest rates, amortization of premiums on deposits and borrowings, amortization of intangible assets and related income taxes. Unaudited pro forma net income for the three and six months ended June 30, 2019 include after tax merger related expenses of $28,000 recorded by Peoples, or $(0.01) per share. Additionally, the Corporation expects to achieve further operational cost savings and other efficiencies as a result of the acquisition which are not reflected in the unaudited pro forma amounts below. Unaudited Pro Forma Unaudited Pro Forma Three Months Ended Six Months Ended (Dollars in thousands, except per share amounts) June 30, 2019 June 30, 2019 Total revenues (net interest income plus nonintererest income) $ 30,808 $ 59,463 Net income $ 5,969 $ 10,258 Net income per share, basic and diluted $ 1.63 $ 2.78 The revenue and earnings amounts specific to Peoples since the acquisition date that are included in the consolidated results for 2020 are not readily determinable. The disclosures of these amounts are impracticable due to the merging of certain processes and systems at the acquisition date. Merger related expenses associated with the acquisition of Peoples were $439,000 ($347,000 after income taxes) for the three months ended June 30, 2020, $1.40 million ($1.13 million after income taxes) for the six months ended June 30, 2020 and $2.10 million ($1.78 million after income taxes) in the aggregate through June 30, 2020. There were no merger related expenses during the three and six months ended June 30, 2019. These costs included the integration of systems and operations and legal and consulting expenses, which have been expensed as incurred. The Corporation believes that any further merger related expenses incurred in future periods will not be significant to the Corporation as a whole. |
Securities
Securities | 6 Months Ended |
Jun. 30, 2020 | |
Securities | |
Securities | NOTE 3: Securities The Corporation’s debt securities, all of which are classified as available for sale, are summarized as follows: June 30, 2020 Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value U.S. government agencies and corporations $ 37,068 $ 153 $ (16) $ 37,205 Mortgage-backed securities 102,749 3,500 — 106,249 Obligations of states and political subdivisions 101,361 2,321 (3) 103,679 $ 241,178 $ 5,974 $ (19) $ 247,133 December 31, 2019 Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value U.S. government agencies and corporations $ 21,454 $ 3 $ (17) $ 21,440 Mortgage-backed securities 85,649 979 (43) 86,585 Obligations of states and political subdivisions 80,656 1,111 (59) 81,708 $ 187,759 $ 2,093 $ (119) $ 189,733 The amortized cost and estimated fair value of securities at June 30, 2020, 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. June 30, 2020 Amortized (Dollars in thousands) Cost Fair Value Due in one year or less $ 63,267 $ 63,568 Due after one year through five years 139,191 143,546 Due after five years through ten years 36,488 37,698 Due after ten years 2,232 2,321 $ 241,178 $ 247,133 The following table presents the gross realized gains and losses on and the proceeds from the sales, maturities and calls of securities. During the six months ended June 30, 2020, $5.99 million in proceeds were related to sales of assets acquired in the acquisition of Peoples. There were no sales of securities during the three and six months ended June 30, 2019. Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Realized gains from sales, maturities and calls of securities: Gross realized gains $ 3 $ 1 $ 7 $ 5 Gross realized losses — — — — Net realized gains $ 3 $ 1 $ 7 $ 5 Proceeds from sales, maturities, calls and paydowns of securities $ 31,717 $ 17,982 $ 70,780 $ 33,639 The Corporation pledges securities primarily to secure public deposits and repurchase agreements. Securities with an aggregate amortized cost of $118.55 million and an aggregate fair value of $122.58 million were pledged at June 30, 2020. Securities with an aggregate amortized cost of $126.22 million and an aggregate fair value of $127.47 million were pledged at December 31, 2019. Securities in an unrealized loss position at June 30, 2020, by duration of the period of the unrealized loss, are shown below. Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Loss Value Loss Value Loss U.S. government agencies and corporations $ 14,320 $ 16 $ — $ — $ 14,320 $ 16 Mortgage-backed securities — — — — — — Obligations of states and political subdivisions 1,412 3 — — 1,412 3 Total temporarily impaired securities $ 15,732 $ 19 $ — $ — $ 15,732 $ 19 There were 11 debt securities totaling $15.73 million of aggregate fair value considered temporarily impaired at June 30, 2020. The primary cause of the temporary impairments in the Corporation’s investments in debt securities was fluctuations in interest rates. 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. At June 30, 2020, all of the Corporation’s obligations of states and political subdivisions that were in a net unrealized loss position were rated “A” or better by Standard & Poor's or Moody's Investors Service. The Corporation considers these to meet regulatory credit quality standards, meaning that the securities have low risk of default by the obligor and the full and timely repayment of principal and interest is expected over the expected life of the investment. Because 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 unrealized losses, the Corporation does not consider these investments to be other-than-temporarily impaired at June 30, 2020 and no other-than-temporary impairment loss has been recognized in net income. Securities in an unrealized loss position at December 31, 2019, by duration of the period of the unrealized loss, are shown below. Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Loss Value Loss Value Loss U.S. government agencies and corporations $ 6,256 $ 11 $ 4,094 $ 6 $ 10,350 $ 17 Mortgage-backed securities 4,099 7 10,166 36 14,265 43 Obligations of states and political subdivisions 9,187 53 1,368 6 10,555 59 Total temporarily impaired securities $ 19,542 $ 71 $ 15,628 $ 48 $ 35,170 $ 119 The Corporation’s investment in restricted stock totaled $3.21 million at June 30, 2020 and consisted of Federal Home Loan Bank (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 the FHLBs. 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 other-than-temporarily impaired at June 30, 2020 and no impairment has been recognized. |
Loans
Loans | 6 Months Ended |
Jun. 30, 2020 | |
Loans | |
Loans | NOTE 4: Loans Major classifications of loans are summarized as follows: June 30, December 31, (Dollars in thousands) 2020 2019 Real estate – residential mortgage $ 205,011 $ 181,295 Real estate – construction 1 72,094 54,246 Commercial, financial and agricultural 2 682,817 500,812 Equity lines 52,697 52,083 Consumer 15,722 13,756 Consumer finance 300,649 312,999 1,328,990 1,115,191 Less allowance for loan losses (36,094) (32,873) Loans, net $ 1,292,896 $ 1,082,318 1 Includes the Corporation’s real estate construction lending and consumer real estate lot lending. 2 Includes the Corporation’s commercial real estate lending, land acquisition and development lending, builder line lending and commercial business lending. Consumer loans included $173,000 and $449,000 of demand deposit overdrafts at June 30, 2020 and December 31, 2019, respectively. Loans acquired in business combinations are recorded in the Consolidated Balance Sheets at fair value at the acquisition date under the acquisition method of accounting. The outstanding principal balance and the carrying amount at June 30, 2020 and December 31, 2019 of loans acquired in business combinations were as follows: June 30, 2020 December 31, 2019 Acquired Loans - Acquired Loans - Acquired Loans - Acquired Loans - Purchased Purchased Acquired Loans - Purchased Purchased Acquired Loans - (Dollars in thousands) Credit Impaired Performing Total Credit Impaired Performing Total Outstanding principal balance $ 18,591 $ 116,971 $ 135,562 $ 6,262 $ 27,839 $ 34,101 Carrying amount Real estate – residential mortgage $ 1,814 $ 22,448 $ 24,262 $ 107 $ 7,035 $ 7,142 Real estate – construction — 3,762 3,762 — — — Commercial, financial and agricultural 1 5,452 74,254 79,706 563 11,338 11,901 Equity lines 77 11,767 11,844 35 8,046 8,081 Consumer 488 2,317 2,805 — 3 3 Total acquired loans $ 7,831 $ 114,548 $ 122,379 $ 705 $ 26,422 $ 27,127 1 Includes acquired loans classified by the Corporation as commercial real estate lending and commercial business lending. The following table presents a summary of the change in the accretable yield of loans classified as purchased credit impaired (PCI): Six Months Ended June 30, (Dollars in thousands) 2020 2019 Accretable yield, balance at beginning of period $ 4,721 $ 5,987 Additions 3,372 — Accretion (1,687) (1,760) Reclassification of nonaccretable difference due to improvement in expected cash flows 923 727 Other changes, net 115 349 Accretable yield, balance at end of period $ 7,444 $ 5,303 Loans on nonaccrual status were as follows: June 30, December 31, (Dollars in thousands) 2020 2019 Real estate – residential mortgage $ 980 $ 1,526 Commercial, financial and agricultural: Commercial business lending — 11 Equity lines 244 229 Consumer 542 118 Consumer finance 369 611 Total loans on nonaccrual status $ 2,135 $ 2,495 The past due status of loans as of June 30, 2020 was as follows: 90+ Days 30 - 59 Days 60 - 89 Days 90+ Days Total Past Due and (Dollars in thousands) Past Due Past Due Past Due Past Due PCI Current 1 Total Loans Accruing Real estate – residential mortgage $ 537 $ 285 $ 880 $ 1,702 $ 1,814 $ 201,495 $ 205,011 $ 291 Real estate – construction: Construction lending — — — — — 56,382 56,382 — Consumer lot lending — — — — — 15,712 15,712 — Commercial, financial and agricultural: Commercial real estate lending 232 — — 232 5,452 415,999 421,683 — Land acquisition and development lending — — — — — 38,121 38,121 — Builder line lending — — — — — 22,172 22,172 — Commercial business lending — — — — — 200,841 200,841 — Equity lines 47 — 50 97 76 52,524 52,697 — Consumer — 57 — 57 489 15,176 15,722 — Consumer finance 5,096 705 369 6,170 — 294,479 300,649 — Total $ 5,912 $ 1,047 $ 1,299 $ 8,258 $ 7,831 $ 1,312,901 $ 1,328,990 $ 291 1 For the purposes of the table above, “Current” includes loans that are 1-29 days past due. The table above includes nonaccrual loans that are current of $649,000, 60-89 days past due of $19,000 and 90+ days past due of $1.04 million, as well as nonaccrual loans that are PCI of $427,000. The past due status of loans as of December 31, 2019 was as follows: 90+ Days 30 - 59 Days 60 - 89 Days 90+ Days Total Past Due and (Dollars in thousands) Past Due Past Due Past Due Past Due PCI Current 1 Total Loans Accruing Real estate – residential mortgage $ 1,428 $ 161 $ 1,016 $ 2,605 $ 107 $ 178,583 $ 181,295 $ — Real estate – construction: Construction lending — — — — — 40,943 40,943 — Consumer lot lending — — — — — 13,303 13,303 — Commercial, financial and agricultural: Commercial real estate lending — — — — 563 325,991 326,554 — Land acquisition and development lending — — — — — 42,891 42,891 — Builder line lending — — — — — 26,373 26,373 — Commercial business lending 73 18 — 91 — 104,903 104,994 — Equity lines 229 56 223 508 35 51,540 52,083 109 Consumer 20 10 — 30 — 13,726 13,756 — Consumer finance 11,034 1,420 611 13,065 — 299,934 312,999 — Total $ 12,784 $ 1,665 $ 1,850 $ 16,299 $ 705 $ 1,098,187 $ 1,115,191 $ 109 1 For the purposes of the table above, “Current” includes loans that are 1-29 days past due. The table above includes nonaccrual loans that are current of $547,000, 30-59 days past due of $197,000, 60-89 days past due of $10,000 and 90+ days past due of $1.74 million. There were no loan modifications during the three months ended June 30, 2020 classified as a troubled debt restructuring (TDR). There was one loan modification during the six months ended June 30, 2020 that was classified as a TDR. This TDR was an equity line with a recorded investment of $84,000 at the time of its modification and included modifications of the loan’s payment structure. There was one loan modification during the three and six months ended June 30, 2019 that was classified as a TDR. This TDR was a consumer loan with a recorded investment of $121,000 at the time of its modification and included a modification of the loan’s interest rate. All TDRs are considered impaired loans and are individually evaluated in the determination of the allowance for loan losses. A TDR payment default occurs when, within 12 months of the original TDR modification, either a full or partial charge-off occurs or a TDR becomes 90 days or more past due. The specific reserve associated with a TDR is reevaluated when a TDR payment default occurs. There were no TDR payment defaults during the three and six months ended June 30, 2020 and 2019. In response to the effects of the COVID-19 pandemic, including economic disruption and adverse impacts to commercial and consumer borrowers, the Bank has accommodated certain borrowers by granting short-term payment deferrals or periods of interest-only payments of up to six months in each case. As of June 30, 2020, the Bank had provided short-term payment deferrals on 200 loans with an aggregate balance of $94.91 million. Generally, a short-term payment deferral does not result in a loan modification being classified as a TDR. Management cannot predict the overall impact of the COVID-19 pandemic on its loan portfolio or the extent of payment deferrals or other modifications that may be granted. Impaired loans, which included TDRs of $3.79 million, and the related allowance at June 30, 2020 were as follows: Recorded Recorded Investment Investment Average Unpaid in Loans in Loans Balance- Interest Principal without with Related Impaired Income (Dollars in thousands) Balance Specific Reserve Specific Reserve Allowance Loans Recognized Real estate – residential mortgage $ 2,892 $ 1,072 $ 1,677 $ 69 $ 2,875 $ 44 Commercial, financial and agricultural: Commercial real estate lending 1,401 — 1,401 72 1,409 37 Equity lines 121 113 — — 120 1 Consumer 126 — 114 107 115 — Total $ 4,540 $ 1,185 $ 3,192 $ 248 $ 4,519 $ 82 Impaired loans, which included TDRs of $4.35 million, and the related allowance at December 31, 2019 were as follows: Recorded Recorded Investment Investment Average Unpaid in Loans in Loans Balance- Interest Principal without with Related Impaired Income (Dollars in thousands) Balance Specific Reserve Specific Reserve Allowance Loans Recognized Real estate – residential mortgage $ 3,891 $ 2,192 $ 1,479 $ 72 $ 3,506 $ 155 Commercial, financial and agricultural: Commercial real estate lending 1,459 4 1,447 77 1,581 82 Equity lines 31 31 — — 32 2 Consumer 130 — 121 118 123 — Total $ 5,511 $ 2,227 $ 3,047 $ 267 $ 5,242 $ 239 |
Allowance for Loan Losses
Allowance for Loan Losses | 6 Months Ended |
Jun. 30, 2020 | |
Allowance for Loan Losses | |
Allowance for Loan Losses | NOTE 5: Allowance for Loan Losses The following table presents the changes in the allowance for loan losses by major classification during the six months ended June 30, 2020: Real Estate Commercial, Residential Real Estate Financial & Equity Consumer (Dollars in thousands) Mortgage Construction Agricultural Lines Consumer Finance Total Allowance for loan losses: Balance at December 31, 2019 $ 2,080 $ 681 $ 7,121 $ 733 $ 465 $ 21,793 $ 32,873 Provision charged to operations 285 302 1,724 56 33 3,850 6,250 Loans charged off (4) — (18) — (133) (5,422) (5,577) Recoveries of loans previously charged off 64 — 2 — 105 2,377 2,548 Balance at June 30, 2020 $ 2,425 $ 983 $ 8,829 $ 789 $ 470 $ 22,598 $ 36,094 The following table presents the changes in the allowance for loan losses by major classification during the six months ended June 30, 2019: Real Estate Commercial, Residential Real Estate Financial & Equity Consumer (Dollars in thousands) Mortgage Construction Agricultural Lines Consumer Finance Total Allowance for loan losses: Balance at December 31, 2018 $ 2,246 $ 727 $ 6,688 $ 1,106 $ 257 $ 22,999 $ 34,023 Provision (credited) charged to operations (68) 23 218 (225) 162 4,095 4,205 Loans charged off (45) — (29) — (162) (6,966) (7,202) Recoveries of loans previously charged off 9 — 3 — 115 2,248 2,375 Balance at June 30, 2019 $ 2,142 $ 750 $ 6,880 $ 881 $ 372 $ 22,376 $ 33,401 The following table presents, as of June 30, 2020, the balance of the allowance for loan losses and the balance of loans by impairment methodology. Real Estate Commercial, Residential Real Estate Financial & Equity Consumer (Dollars in thousands) Mortgage Construction Agricultural Lines Consumer Finance Total Allowance balance attributable to loans: Individually evaluated for impairment $ 69 $ — $ 72 $ — $ 107 $ — $ 248 Collectively evaluated for impairment 2,356 983 8,757 789 363 22,598 35,846 Acquired loans - PCI — — — — — — — Total allowance $ 2,425 $ 983 $ 8,829 $ 789 $ 470 $ 22,598 $ 36,094 Loans: Individually evaluated for impairment $ 2,749 $ — $ 1,401 $ 113 $ 114 $ — $ 4,377 Collectively evaluated for impairment 200,448 72,094 675,964 52,508 15,119 300,649 1,316,782 Acquired loans - PCI 1,814 — 5,452 76 489 — 7,831 Total loans $ 205,011 $ 72,094 $ 682,817 $ 52,697 $ 15,722 $ 300,649 $ 1,328,990 The following table presents, as of December 31, 2019, the balance of the allowance for loan losses, the allowance by impairment methodology, total loans and loans by impairment methodology. Real Estate Commercial, Residential Real Estate Financial & Equity Consumer (Dollars in thousands) Mortgage Construction Agricultural Lines Consumer Finance Total Allowance balance attributable to loans: Individually evaluated for impairment $ 72 $ — $ 77 $ — $ 118 $ — $ 267 Collectively evaluated for impairment 2,008 681 7,044 733 347 21,793 32,606 Acquired loans - PCI — — — — — — — Total allowance $ 2,080 $ 681 $ 7,121 $ 733 $ 465 $ 21,793 $ 32,873 Loans: Individually evaluated for impairment $ 3,671 $ — $ 1,451 $ 31 $ 121 $ — $ 5,274 Collectively evaluated for impairment 177,517 54,246 498,798 52,017 13,635 312,999 1,109,212 Acquired loans - PCI 107 — 563 35 — — 705 Total loans $ 181,295 $ 54,246 $ 500,812 $ 52,083 $ 13,756 $ 312,999 $ 1,115,191 Loans by credit quality indicators as of June 30, 2020 were as follows: Special Substandard (Dollars in thousands) Pass Mention Substandard Nonaccrual Total 1 Real estate – residential mortgage $ 201,678 $ 1,511 $ 842 $ 980 $ 205,011 Real estate – construction: Construction lending 56,382 — — — 56,382 Consumer lot lending 15,712 — — — 15,712 Commercial, financial and agricultural: Commercial real estate lending 393,105 26,125 2,453 — 421,683 Land acquisition and development lending 30,575 7,546 — — 38,121 Builder line lending 22,172 — — — 22,172 Commercial business lending 196,755 4,086 — — 200,841 Equity lines 52,340 105 8 244 52,697 Consumer 15,119 61 — 542 15,722 $ 983,838 $ 39,434 $ 3,303 $ 1,766 $ 1,028,341 1 At June 30, 2020, the Corporation did not have any loans classified as Doubtful or Loss. Included in the table above are loans purchased in connection with the acquisition of Peoples of $93.84 million pass rated, $1.77 million special mention, $2.91 million substandard and $427,000 substandard nonaccrual. Non- (Dollars in thousands) Performing Performing Total Consumer finance $ 300,280 $ 369 $ 300,649 Loans by credit quality indicators as of December 31, 2019 were as follows: Special Substandard (Dollars in thousands) Pass Mention Substandard Nonaccrual Total 1 Real estate – residential mortgage $ 177,049 $ 1,839 $ 881 $ 1,526 $ 181,295 Real estate – construction: Construction lending 40,943 — — — 40,943 Consumer lot lending 13,303 — — — 13,303 Commercial, financial and agricultural: Commercial real estate lending 323,218 3,266 70 — 326,554 Land acquisition and development lending 33,870 9,021 — — 42,891 Builder line lending 25,995 378 — — 26,373 Commercial business lending 104,291 692 — 11 104,994 Equity lines 51,662 181 11 229 52,083 Consumer 13,632 6 — 118 13,756 $ 783,963 $ 15,383 $ 962 $ 1,884 $ 802,192 1 At December 31, 2019, the Corporation did not have any loans classified as Doubtful or Loss. Non- (Dollars in thousands) Performing Performing Total Consumer finance $ 312,388 $ 611 $ 312,999 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | NOTE 6: Goodwill and Other Intangible Assets The carrying amount of goodwill was $25.19 million and $14.43 million at June 30, 2020 and December 31, 2019, respectively. The following table presents the changes in goodwill during the six months ended June 30, 2020. There were no changes in the recorded balance of goodwill during the three and six months ended June 30, 2019. Community Consumer (Dollars in thousands) Banking Finance Total Balance as of January 1, 2020 $ 3,702 $ 10,723 $ 14,425 Acquisition of Peoples Bankshares, Incorporated 10,766 — 10,766 Balance at June 30, 2020 $ 14,468 $ 10,723 $ 25,191 The Corporation had $2.46 million and $912,000 of other intangible assets as of June 30, 2020 and December 31, 2019, respectively. Other intangible assets were recognized in connection with the core deposits acquired from Peoples 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: June 30, December 31, 2020 2019 Gross Gross Carrying Accumulated Carrying Accumulated (Dollars in thousands) Amount Amortization Amount Amortization Amortized intangible assets: Core deposit intangibles $ 1,711 $ (86) $ — $ — Other intangibles 1,405 (573) 1,405 (493) Total $ 3,116 $ (659) $ 1,405 $ (493) Amortization expense was $83,000 and $63,000 for the three months ended June 30, 2020 and 2019, respectively and $166,000 and $141,000 for the six months ended June 30, 2020 and 2019, respectively. |
Equity, Other Comprehensive Inc
Equity, Other Comprehensive Income and Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Equity, Other Comprehensive Income and Earnings Per Share | |
Equity, Other Comprehensive Income and Earnings Per Share | NOTE 7: Equity, Other Comprehensive Income and Earnings Per Share Equity and Noncontrolling Interest During the six months ended June 30, 2020, the Corporation repurchased 8,963 shares of its common stock for an aggregate cost of $355,000 under share repurchase programs authorized by its Board of Directors. During the three and six months ended June 30, 2019, the Corporation repurchased 32,779 and 65,186 shares of its common stock, respectively, for an aggregate cost of $1.62 million and $3.29 million under the share repurchase programs. The Corporation did not repurchase any of its common stock during the three months ended June 30, 2020. Additionally during the six months ended June 30, 2020 and 2019, the Corporation withheld 5,069 shares and 4,842 shares of its common stock, respectively, from employees to satisfy tax withholding obligations upon vesting of restricted stock. The Corporation’s current share repurchase program expired on May 31, 2020 and has not been renewed or extended at this time. In the first quarter of 2019, C&F Select LLC, a subsidiary of C&F Mortgage, issued a 49 percent ownership interest to an unrelated investor. In exchange for this noncontrolling interest in C&F Select LLC, C&F Bank received a note receivable from the investor for $490,000, which is included in loans in the Consolidated Balance Sheets and is secured by cash deposits at C&F Bank. Accumulated Other Comprehensive Loss, Net The following table presents the cumulative balances of the components of accumulated other comprehensive loss, net of deferred taxes of $303,000 and $604,000 as of June 30, 2020 and December 31, 2019, respectively. June 30, December 31, (Dollars in thousands) 2020 2019 Net unrealized gains on securities $ 4,705 $ 1,560 Net unrecognized losses on cash flow hedges (1,654) (69) Net unrecognized losses on defined benefit plan (3,689) (3,740) Total accumulated other comprehensive loss, net $ (638) $ (2,249) Earnings Per Share (EPS) The components of the Corporation’s EPS calculations are as follows: Three Months Ended June 30, (Dollars in thousands) 2020 2019 Net income attributable to C&F Financial Corporation $ 3,746 $ 5,843 Weighted average shares outstanding — 3,647,707 3,463,277 Six Months Ended June 30, (Dollars in thousands) 2020 2019 Net income attributable to C&F Financial Corporation $ 7,324 $ 9,614 Weighted average shares outstanding — 3,646,161 3,473,875 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. |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2020 | |
Employee Benefit Plans | |
Employee Benefit Plans | 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. Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Components of net periodic benefit cost: Service cost, included in salaries and employee benefits $ 415 $ 316 $ 801 $ 609 Other components of net periodic benefit cost: Interest cost 140 151 275 304 Expected return on plan assets (371) (319) (745) (649) Amortization of prior service credit (17) (17) (34) (34) Amortization of net obligation at transition — — — — Recognized net actuarial losses 57 52 99 94 Other components of net periodic benefit cost, included in other noninterest income (191) (133) (405) (285) Net periodic benefit cost $ 224 $ 183 $ 396 $ 324 |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value of Assets and Liabilities | |
Fair Value of Assets and Liabilities | 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. U.S. GAAP requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. U.S. 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: ● Level 1—Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 assets and liabilities include debt securities traded in an active exchange market, as well as U.S. Treasury securities. ● Level 2—Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3—Valuation is determined using model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect the Corporation’s estimates of assumptions that market participants would use in pricing the respective asset or liability. Valuation techniques may include the use of pricing models, discounted cash flow models and similar techniques. U.S. 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. evaluated based upon a hierarchy of security specific information and market data regarding that security or securities with similar characteristics. Investments in small business investment company funds. Loans held for sale. Derivative asset - IRLCs. Derivative asset/liability – interest rate swaps on loans. Derivative asset/liability – cash flow hedges. Derivative asset/liability – forward sales of TBA securities. The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis. June 30, 2020 Fair Value Measurements Using Assets/Liabilities at (Dollars in thousands) Level 1 Level 2 Level 3 Fair Value Assets: Securities available for sale U.S. government agencies and corporations $ — $ 37,205 $ — $ 37,205 Mortgage-backed securities — 106,249 — 106,249 Obligations of states and political subdivisions — 103,679 — 103,679 Total securities available for sale — 247,133 — 247,133 Loans held for sale — 180,137 — 180,137 Derivatives IRLC — 3,701 — 3,701 Interest rate swaps on loans — 9,743 — 9,743 Total assets $ — $ 440,714 $ — $ 440,714 Liabilities: Derivatives Interest rate swaps on loans $ — $ 9,743 $ — $ 9,743 Cash flow hedges — 2,273 — 2,273 Forward sales of TBA securities — 93 — 93 Total liabilities $ — $ 12,109 $ — $ 12,109 December 31, 2019 Fair Value Measurements Using Assets/Liabilities at (Dollars in thousands) Level 1 Level 2 Level 3 Fair Value Assets: Securities available for sale U.S. government agencies and corporations $ — $ 21,440 $ — $ 21,440 Mortgage-backed securities — 86,585 — 86,585 Obligations of states and political subdivisions — 81,708 — 81,708 Total securities available for sale — 189,733 — 189,733 Loans held for sale — 90,500 — 90,500 Derivatives IRLC — 1,083 — 1,083 Interest rate swaps on loans — 2,462 — 2,462 Total assets $ — $ 283,778 $ — $ 283,778 Liabilities: Derivatives Interest rate swaps on loans $ — $ 2,462 $ — $ 2,462 Cash flow hedges — 145 — 145 Forward sales of TBA securities — 25 — 25 Total liabilities $ — $ 2,632 $ — $ 2,632 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 U.S. 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. Impaired loans. Impaired loans that are measured based on expected future cash flows discounted at the loan’s effective interest rate rather than the market rate of interest, are not recorded at fair value and are therefore excluded from fair value disclosure requirements. OREO. The following table presents the balances of assets measured at fair value on a nonrecurring basis. At June 30, 2020 there were no impaired loans that were measured at fair value. June 30, 2020 Fair Value Measurements Using Assets at Fair (Dollars in thousands) Level 1 Level 2 Level 3 Value Other real estate owned, net $ — $ — $ 268 $ 268 Total $ — $ — $ 268 $ 268 December 31, 2019 Fair Value Measurements Using Assets at Fair (Dollars in thousands) Level 1 Level 2 Level 3 Value Impaired loans, net $ — $ — $ 102 $ 102 Other real estate owned, net — — 268 268 Total $ — $ — $ 370 $ 370 The following table presents quantitative information about Level 3 fair value measurements for financial assets measured at fair value on a nonrecurring basis: Fair Value Measurements at June 30, 2020 (Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Inputs Range (Weighted Average) 1 Other real estate owned, net $ 268 Appraisals Discount to reflect current market conditions and estimated selling costs 33% -75% (45%) Total $ 268 1 The weighted average of unobservable inputs is calculated based on the relative asset fair values. Fair Value of Financial Instruments FASB ASC 825, Financial Instruments 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. Carrying Fair Value Measurements at June 30, 2020 Using Total Fair (Dollars in thousands) Value Level 1 Level 2 Level 3 Value Financial assets: Cash and short-term investments $ 80,300 $ 80,300 $ — $ — $ 80,300 Securities available for sale 247,133 — 247,133 — 247,133 Loans, net 1,292,896 — — 1,299,598 1,299,598 Loans held for sale 180,137 — 180,137 — 180,137 Derivatives IRLC 3,701 — 3,701 — 3,701 Interest rate swaps on loans 9,743 — 9,743 — 9,743 Bank-owned life insurance 19,862 — 19,862 — 19,862 Accrued interest receivable 8,104 8,104 — — 8,104 Financial liabilities: Demand deposits 1,153,248 1,153,248 — — 1,153,248 Time deposits 492,541 — 501,932 — 501,932 Borrowings 91,336 — 92,667 — 92,667 Derivatives Cash flow hedges 2,273 — 2,273 — 2,273 Interest rate swaps on loans 9,743 — 9,743 — 9,743 Forward sales of TBA securities 93 — 93 — 93 Accrued interest payable 1,210 1,210 — — 1,210 Carrying Fair Value Measurements at December 31, 2019 Using Total Fair (Dollars in thousands) Value Level 1 Level 2 Level 3 Value Financial assets: Cash and short-term investments $ 165,433 $ 165,433 $ — $ — $ 165,433 Securities available for sale 189,733 — 189,733 — 189,733 Loans, net 1,082,318 — — 1,082,783 1,082,783 Loans held for sale 90,500 — 90,500 — 90,500 Derivatives IRLC 1,083 — 1,083 — 1,083 Interest rate swaps on loans 2,462 — 2,462 — 2,462 Bank-owned life insurance 16,044 — 16,044 — 16,044 Accrued interest receivable 6,776 6,776 — — 6,776 Financial liabilities: Demand deposits 869,194 869,194 — — 869,194 Time deposits 422,056 — 423,605 — 423,605 Borrowings 161,170 — 154,964 — 154,964 Derivatives Cash flow hedges 145 — 145 — 145 Interest rate swaps on loans 2,462 — 2,462 — 2,462 Forward sales of TBA securities 25 — 25 25 Accrued interest payable 1,291 1,291 — — 1,291 |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2020 | |
Business Segments | |
Business Segments | NOTE 10: Business Segments The Corporation operates in a decentralized fashion in three principal business segments: community banking, mortgage banking and consumer finance. Revenues from community banking operations consist primarily of interest earned on loans and investment securities and fees earned on deposit accounts and debit card interchange activity. Previously, the community banking segment was referred to as the retail banking segment. Mortgage banking operating revenues consist principally of gains on sales of loans in the secondary market, mortgage banking fee income related to loan originations, and interest earned on mortgage loans held for sale. Revenues from consumer finance consist primarily of interest earned on purchased retail installment sales contracts. C&F Wealth Management derives revenues from offering wealth management services and insurance products through third-party service providers. The Corporation’s revenues and expenses are comprised primarily of interest expense associated with the Corporation’s trust preferred capital notes, general corporate expenses, and changes in the value of the rabbi trust and deferred compensation liability related to its nonqualified deferred compensation plan. The results of C&F Wealth Management and the Corporation are not significant to the Corporation on a consolidated basis and are included in “Other.” Three Months Ended June 30, 2020 Community Mortgage Consumer (Dollars in thousands) Banking Banking Finance Other Eliminations Consolidated Revenues: Interest income $ 14,894 $ 1,097 $ 9,689 $ — $ (2,096) $ 23,584 Gains on sales of loans — 4,605 — — — 4,605 Other noninterest income 2,221 2,387 80 2,535 — 7,223 Total operating income 17,115 8,089 9,769 2,535 (2,096) 35,412 Expenses: Provision for loan losses 1,400 — 2,200 — — 3,600 Interest expense 2,718 280 2,090 338 (2,096) 3,330 Salaries and employee benefits 7,640 2,272 2,134 2,308 — 14,354 Depreciation and amortization 829 73 45 43 — 990 Other noninterest expenses 5,020 2,166 1,057 205 — 8,448 Total operating expenses 17,607 4,791 7,526 2,894 (2,096) 30,722 Income (loss) before income taxes (492) 3,298 2,243 (359) — 4,690 Income tax expense (benefit) (560) 977 605 (75) — 947 Net income (loss) $ 68 $ 2,321 $ 1,638 $ (284) $ — $ 3,743 Total assets $ 1,860,367 $ 192,987 $ 301,372 $ 21,834 $ (393,356) $ 1,983,204 Capital expenditures $ 1,568 $ 32 $ 305 $ — $ — $ 1,905 Three Months Ended June 30, 2019 Community Mortgage Consumer (Dollars in thousands) Banking Banking Finance Other Eliminations Consolidated Revenues: Interest income $ 15,419 $ 669 $ 10,365 $ 2 $ (2,179) $ 24,276 Gains on sales of loans — 2,955 — — — 2,955 Other noninterest income 2,893 1,335 110 909 — 5,247 Total operating income 18,312 4,959 10,475 911 (2,179) 32,478 Expenses: Provision for loan losses 110 — 1,700 — — 1,810 Interest expense 2,493 409 2,618 310 (2,179) 3,651 Salaries and employee benefits 6,873 1,611 2,069 942 — 11,495 Depreciation and amortization 758 59 50 (35) — 832 Other noninterest expenses 4,382 1,276 1,361 203 — 7,222 Total operating expenses 14,616 3,355 7,798 1,420 (2,179) 25,010 Income (loss) before income taxes 3,696 1,604 2,677 (509) — 7,468 Income tax expense (benefit) 625 422 728 (149) — 1,626 Net income (loss) $ 3,071 $ 1,182 $ 1,949 $ (360) $ — $ 5,842 Total assets $ 1,386,332 $ 101,554 $ 309,705 $ 19,696 $ (249,291) $ 1,567,996 Capital expenditures $ 566 $ 52 $ 32 $ 67 $ — $ 717 Six Months Ended June 30, 2020 Community Mortgage Consumer (Dollars in thousands) Banking Banking Finance Other Eliminations Consolidated Revenues: Interest income $ 30,809 $ 1,758 $ 19,790 $ — $ (3,995) $ 48,362 Gains on sales of loans — 8,281 — — — 8,281 Other noninterest income 4,853 3,998 197 1,247 — 10,295 Total operating income 35,662 14,037 19,987 1,247 (3,995) 66,938 Expenses: Provision for loan losses 2,400 — 3,850 — — 6,250 Interest expense 5,862 585 4,376 677 (3,995) 7,505 Salaries and employee benefits 15,700 4,117 4,377 977 — 25,171 Depreciation and amortization 1,635 145 91 86 — 1,957 Other noninterest expenses 10,020 3,817 2,398 514 — 16,749 Total operating expenses 35,617 8,664 15,092 2,254 (3,995) 57,632 Income (loss) before income taxes 45 5,373 4,895 (1,007) — 9,306 Income tax expense (benefit) (593) 1,509 1,327 (319) — 1,924 Net income (loss) $ 638 $ 3,864 $ 3,568 $ (688) $ — $ 7,382 Total assets $ 1,860,367 $ 192,987 $ 301,372 $ 21,834 $ (393,356) $ 1,983,204 Capital expenditures $ 2,320 $ 326 $ 807 $ — $ — $ 3,453 Six Months Ended June 30, 2019 Community Mortgage Consumer (Dollars in thousands) Banking Banking Finance Other Eliminations Consolidated Revenues: Interest income $ 29,743 $ 1,019 $ 20,510 $ 4 $ (4,049) $ 47,227 Gains on sales of loans — 5,091 — — — 5,091 Other noninterest income 5,331 2,173 239 2,471 — 10,214 Total operating income 35,074 8,283 20,749 2,475 (4,049) 62,532 Expenses: Provision for loan losses 110 — 4,095 — — 4,205 Interest expense 4,668 572 5,169 595 (4,049) 6,955 Salaries and employee benefits 13,851 2,758 4,254 2,539 — 23,402 Depreciation and amortization 1,593 121 102 10 — 1,826 Other noninterest expenses 8,450 2,458 2,684 406 — 13,998 Total operating expenses 28,672 5,909 16,304 3,550 (4,049) 50,386 Income (loss) before income taxes 6,402 2,374 4,445 (1,075) — 12,146 Income tax expense (benefit) 1,041 625 1,211 (344) — 2,533 Net income (loss) $ 5,361 $ 1,749 $ 3,234 $ (731) $ — $ 9,613 Total assets $ 1,386,332 $ 101,554 $ 309,705 $ 19,696 $ (249,291) $ 1,567,996 Capital expenditures $ 1,288 $ 76 $ 40 $ 67 $ — $ 1,471 During the three months ended June 30, 2020, the Corporation recorded merger related expenses of $439,000 ($347,000 after income taxes), in connection with its acquisition of Peoples, all of which was allocated to the community banking segment and recorded as $50,000 of salaries and benefits expense and $389,000 of other noninterest expense. During the six months ended June 30, 2020, the Corporation recorded merger related expenses of $1.40 million ($1.13 million after income taxes), in connection with its acquisition of Peoples, of which $1.30 million ($1.03 million after income taxes) was allocated to the community banking segment and recorded as $119,000 of salaries and benefits expense, $879,000 of other noninterest expense and a loss on disposal of equipment of $298,000 included in other noninterest income. The remainder was recorded as other noninterest expense at the holding company. 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. The community banking segment charges the mortgage banking segment interest 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 variable rate notes that carry interest at one-month LIBOR plus 200 basis points, with a floor of 3.5 percent and fixed rate notes that carry interest at rates ranging from 2.0 percent to 8.0 percent. The community banking segment acquires certain residential real estate loans from the mortgage banking segment at prices similar to those paid by third-party investors. These transactions are eliminated to reach consolidated totals. Certain corporate overhead costs incurred by the community banking segment are not allocated to the mortgage banking, consumer finance and other segments. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingent Liabilities | |
Commitments and Contingent Liabilities | 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 $303.92 million at June 30, 2020 and $256.15 million at December 31, 2019, which does not include IRLCs at the mortgage banking segment, which are discussed in Note 12. 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 $17.18 million at June 30, 2020 and $16.60 million at December 31, 2019. The mortgage banking segment sells substantially all of the residential mortgage loans it originates 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 significant 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 evaluation of potential losses is inherently subjective. A schedule of expected losses on loans with claims or indemnifications is maintained to ensure the reserve is adequate to cover estimated losses. For the three and six months ended June 30, 2020, the Corporation recorded $156,000 and $163,000 of provision for indemnifications, compared to no provision for indemnifications for the three and six months ended June 30, 2019, respectively. The allowance for indemnifications was $2.64 million at June 30, 2020 and $2.48 million at December 31, 2019. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | NOTE 12: Derivative Financial Instruments The Corporation uses derivative financial instruments primarily to manage risks to the Corporation associated with changing interest rates, and to assist customers with their risk management objectives. The Corporation designates certain interest rate swaps as hedging instruments in qualifying cash flow hedges. The changes in fair value of these designated hedging instruments is reported as a component of other comprehensive income. Derivative contracts that are not designated in a qualifying hedging relationship include customer accommodation loan swaps and contracts related to mortgage banking activities. Cash flow hedges 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. Unrealized gains or losses recorded in other comprehensive income 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 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. Loan swaps Mortgage banking At June 30, 2020, the mortgage banking segment had $232.97 million of IRLCs and $166.01 million of unpaid principal on mortgage loans held for sale for which it managed interest rate risk using best-efforts forward sales contracts for $398.98 million in mortgage loans. Also at June 30, 2020, the mortgage banking segment had $14.90 million of IRLCs and $8.84 million of unpaid principal on mortgage loans held for sale for which it managed interest rate risk using forward sales of $20.75 million of TBA securities and mandatory-delivery forward sales contracts for $1.60 million in mortgage loans. At December 31, 2019, the mortgage banking segment had $63.35 million of IRLCs and $65.77 million of unpaid principal on mortgage loans held for sale for which it managed interest rate risk using best-efforts forward sales contracts for $129.12 million in mortgage loans. Also at December 31, 2019, the mortgage banking segment had $11.72 million of IRLCs and $21.98 million of unpaid principal on mortgage loans held for sale for which it managed interest rate risk using forward sales of $24.0 million of TBA securities and mandatory-delivery forward sales contracts for $6.73 million in mortgage loans. The following tables summarize key elements of the Corporation’s derivative instruments other than forward sales of mortgage loans. The fair values of forward sales of mortgage loans were not material to the consolidated financial statements of the Corporation at June 30, 2020 or December 31, 2019. June 30, 2020 Notional (Dollars in thousands) Amount Assets Liabilities Cash flow hedges: Interest rate swap contracts $ 25,000 $ — $ 2,273 Not designated as hedges: Customer-related interest rate swap contracts: Matched interest rate swaps with borrower 85,282 9,743 — Matched interest rate swaps with counterparty 85,282 — 9,743 Mortgage banking contracts: IRLCs 247,871 3,701 — Forward sales of TBA securities 20,750 — 93 December 31, 2019 Notional (Dollars in thousands) Amount Assets Liabilities Cash flow hedges: Interest rate swap contracts $ 25,000 $ — $ 145 Not designated as hedges: Customer-related interest rate swap contracts: Matched interest rate swaps with borrower 74,266 2,454 8 Matched interest rate swaps with counterparty 74,266 8 2,454 Mortgage banking contracts: IRLCs 75,073 1,083 — Forward sales of TBA securities 24,000 — 25 The Corporation is required to maintain cash collateral with dealer counterparties for derivative instruments in a loss position, subject to certain thresholds and offsets. At June 30, 2020 and at December 31, 2019, $11.79 million and $2.52 million, respectively, of cash collateral was maintained with dealer counterparties and was included in “Other assets” in the Consolidated Balance Sheets. |
Other Noninterest Expenses
Other Noninterest Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Other Noninterest Expenses | |
Other Noninterest Expenses | NOTE 13: Other Noninterest Expenses The following table presents the significant components in the Consolidated Statements of Income line “Noninterest Expenses-Other.” Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Data processing fees $ 2,448 $ 1,974 $ 4,842 $ 3,896 Professional fees 738 789 1,718 1,353 Mortgage banking loan processing expenses 780 388 1,264 683 Telecommunication expenses 409 330 781 648 Marketing and advertising expenses 348 435 838 808 Travel and educational expenses 100 304 544 706 All other noninterest expenses 2,048 1,686 3,825 3,392 Total other noninterest expenses $ 6,871 $ 5,906 $ 13,812 $ 11,486 The table above includes merger related expenses for the three months ended June 30, 2020 of $308,000, of which $263,000 was included in data processing fees, $22,000 was included in professional fees, and $23,000 was included in all other noninterest expenses and includes merger related expenses for the six months ended June 30, 2020 of $898,000, of which $501,000 was included in data processing fees, $336,000 was included in professional fees, and $61,000 was included in all other noninterest expenses. There were no merger related expenses during the three and six months ended June 30, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation: The unaudited consolidated financial statements include the accounts of C&F Financial Corporation (the Corporation) and 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. The accounting and reporting policies of the Corporation conform to U.S. GAAP and to predominant practices within the banking industry. |
Nature of Operations | Nature of Operations: C&F Bank has five wholly-owned subsidiaries: C&F Mortgage Corporation (C&F Mortgage), C&F Finance Company (C&F Finance), C&F Wealth Management Corporation (C&F Wealth Management), C&F Insurance Services, Inc. and CVB Title Services, Inc., all incorporated under the laws of the Commonwealth of Virginia. C&F Mortgage, organized in September 1995, was formed to originate and sell residential mortgages and through its subsidiary, Certified Appraisals LLC, provides ancillary mortgage loan production services for residential appraisals. C&F Mortgage owns a 51 percent interest in C&F Select LLC, which was organized in January 2019 and is also engaged in the business of originating and selling residential mortgages. C&F Finance, acquired in September 2002, is a finance company purchasing automobile, marine and recreational vehicle (RV) loans through indirect lending programs. C&F Wealth Management, organized in April 1995, is a full-service brokerage firm offering a comprehensive range of wealth management services and insurance products through third-party service providers. C&F Insurance Services, Inc., was organized in July 1999, for the primary purpose of owning an equity interest in an independent insurance agency that operates in Virginia and North Carolina. CVB Title Services, Inc. was organized for the primary purpose of owning an equity interest in a full service title and settlement agency. Business segment data is presented in Note 10. |
Basis of Presentation | Basis of Presentation: The outbreak of the novel coronavirus and the resulting COVID-19 pandemic has caused a significant disruption in economic activity worldwide, including in market areas served by the Corporation. Estimates for the allowance for loan losses at June 30, 2020 include losses related to the pandemic. The Corporation expects that the pandemic will continue to have an effect on its results of operations, including resulting in additional provision for loan losses in future periods. It is unknown how long these conditions will last and what the ultimate financial impact will be to the Corporation. Depending on the severity of the economic consequences of the pandemic, the Corporation’s goodwill may become impaired. |
Reclassification | Reclassification: |
Business Combination | Business Combination: |
Derivative Financial Instruments | Derivative Financial Instruments: |
Leases | Leases: The Corporation’s leases comprise primarily operating leases of real estate and office equipment in which the Corporation or one of its subsidiaries is the lessee. In the second quarter of 2020, the Corporation entered into a new lease of real estate which is classified as a finance lease. The right of use asset and lease liability were measured at June 30, December 31, (Dollars in thousands) 2020 2019 Operating leases: Right of use assets $ 2,491 $ 2,785 Lease liabilities 2,597 2,813 Finance leases: Right of use assets $ 2,172 $ — Lease liabilities 2,185 — |
Income Taxes | Income Taxes: |
Share-Based Compensation | Share-Based Compensation: A summary of activity for restricted stock awards during the first six months of 2020 and 2019 is presented below: 2020 Weighted- Average Grant Date Shares Fair Value Unvested, December 31, 2019 142,020 $ 48.88 Granted 14,650 53.22 Vested (16,230) 39.97 Forfeited (2,735) 5.89 Unvested, June 30, 2020 137,705 50.33 2019 Weighted- Average Grant Date Shares Fair Value Unvested, December 31, 2018 139,455 $ 45.75 Granted 16,100 51.73 Vested (16,290) 41.08 Forfeited (410) 53.28 Unvested, June 30, 2019 138,855 46.97 |
Paycheck Protection Program | Paycheck Protection Program: |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements: On January 1, 2020, the Corporation adopted Accounting Standards Update (ASU) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” |
Recent Significant Accounting Pronouncements | Recent Significant Accounting Pronouncements: In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief Financial Instruments—Credit losses (Topic 326), Derivatives and hedging (Topic 815), and Leases (Topic 842)—Effective dates, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) Codification Improvements to Financial Instruments The new standard will be effective for the Corporation beginning on January 1, 2023. Early adoption of the new standard is permitted. The amendments of ASC 326, upon adoption, will be applied on a modified retrospective basis, with the cumulative effect of adopting the new standard being recorded as an adjustment to opening retained earnings in the period of adoption. The Corporation has established a working group to prepare for and implement changes related to ASC 326 and has gathered historical loan loss data for purposes of evaluating appropriate portfolio segmentation and modeling methods under the standard. The Corporation has performed procedures to validate the historical loan loss data to ensure its suitability and reliability for purposes of developing an estimate of expected credit losses under ASC 326. The Corporation has engaged a vendor to assist in modeling expected lifetime losses under ASC 326, and is continuing to develop and refine an approach to estimating the allowance for credit losses. The adoption of ASC 326 will result in significant changes to the Corporation’s consolidated financial statements, which may include changes in the level of the allowance for credit losses that will be considered adequate, a reduction in total equity and regulatory capital of C&F Bank, differences in the timing of recognizing changes to the allowance for credit losses and expanded disclosures about the allowance for credit losses. The Corporation has not yet determined an estimate of the effect of these changes. The adoption of the standard will also result in significant changes in the Corporation’s internal control over financial reporting related to the allowance for credit losses. In August 2018, the FASB issued ASU 2018-14, “Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of operating and finance lease | June 30, December 31, (Dollars in thousands) 2020 2019 Operating leases: Right of use assets $ 2,491 $ 2,785 Lease liabilities 2,597 2,813 Finance leases: Right of use assets $ 2,172 $ — Lease liabilities 2,185 — |
Summary of activity for restricted stock awards | 2020 Weighted- Average Grant Date Shares Fair Value Unvested, December 31, 2019 142,020 $ 48.88 Granted 14,650 53.22 Vested (16,230) 39.97 Forfeited (2,735) 5.89 Unvested, June 30, 2020 137,705 50.33 2019 Weighted- Average Grant Date Shares Fair Value Unvested, December 31, 2018 139,455 $ 45.75 Granted 16,100 51.73 Vested (16,290) 41.08 Forfeited (410) 53.28 Unvested, June 30, 2019 138,855 46.97 |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Schedule of acquired loans | June 30, 2020 December 31, 2019 Acquired Loans - Acquired Loans - Acquired Loans - Acquired Loans - Purchased Purchased Acquired Loans - Purchased Purchased Acquired Loans - (Dollars in thousands) Credit Impaired Performing Total Credit Impaired Performing Total Outstanding principal balance $ 18,591 $ 116,971 $ 135,562 $ 6,262 $ 27,839 $ 34,101 Carrying amount Real estate – residential mortgage $ 1,814 $ 22,448 $ 24,262 $ 107 $ 7,035 $ 7,142 Real estate – construction — 3,762 3,762 — — — Commercial, financial and agricultural 1 5,452 74,254 79,706 563 11,338 11,901 Equity lines 77 11,767 11,844 35 8,046 8,081 Consumer 488 2,317 2,805 — 3 3 Total acquired loans $ 7,831 $ 114,548 $ 122,379 $ 705 $ 26,422 $ 27,127 1 Includes acquired loans classified by the Corporation as commercial real estate lending and commercial business lending. |
Peoples Bankshares, Incorporated (Peoples) | |
Schedule of total consideration paid, the fair values of assets acquired and liabilities assumed, and the resulting goodwill | Amounts Recognized as of (Dollars in thousands) January 1, 2020 Purchase price: Cash paid $ 10,579 Common stock issued 11,612 Total purchase price $ 22,191 Identifiable assets acquired: Cash and cash equivalents $ 29,680 Securities available for sale 17,169 Loans 124,195 Accrued interest receivable 430 Corporate premises and equipment 3,105 Other real estate owned 281 Core deposit intangible asset 1,711 Bank-owned life insurance 3,591 Investment in small business investment company 1,493 Other receivables 5,234 Other assets 3,658 Total identifiable assets acquired 190,547 Identifiable liabilities assumed: Demand and savings deposits 94,798 Time deposits 77,018 Borrowings 4,245 Accrued interest payable 260 Salaries, benefits and deferred compensation 2,054 Other liabilities 747 Total identifiable liabilities assumed 179,122 Net identifiable assets assumed $ 11,425 Goodwill resulting from acquisition $ 10,766 |
Schedule of acquired loans | (Dollars in thousands) January 1, 2020 Contractual principal and interest due $ 20,310 Nonaccretable difference (7,679) Expected cash flows 12,631 Accretable yield (3,372) Purchase credit impaired loans - estimated fair value $ 9,259 |
Schedule of unaudited pro forma amounts | Unaudited Pro Forma Unaudited Pro Forma Three Months Ended Six Months Ended (Dollars in thousands, except per share amounts) June 30, 2019 June 30, 2019 Total revenues (net interest income plus nonintererest income) $ 30,808 $ 59,463 Net income $ 5,969 $ 10,258 Net income per share, basic and diluted $ 1.63 $ 2.78 |
Securities (Tables)
Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Securities | |
Summary of available for sale debt securities | June 30, 2020 Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value U.S. government agencies and corporations $ 37,068 $ 153 $ (16) $ 37,205 Mortgage-backed securities 102,749 3,500 — 106,249 Obligations of states and political subdivisions 101,361 2,321 (3) 103,679 $ 241,178 $ 5,974 $ (19) $ 247,133 December 31, 2019 Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value U.S. government agencies and corporations $ 21,454 $ 3 $ (17) $ 21,440 Mortgage-backed securities 85,649 979 (43) 86,585 Obligations of states and political subdivisions 80,656 1,111 (59) 81,708 $ 187,759 $ 2,093 $ (119) $ 189,733 |
Schedule of amortized cost and estimated fair value of securities, by the earlier of contractual maturity or expected maturity | June 30, 2020 Amortized (Dollars in thousands) Cost Fair Value Due in one year or less $ 63,267 $ 63,568 Due after one year through five years 139,191 143,546 Due after five years through ten years 36,488 37,698 Due after ten years 2,232 2,321 $ 241,178 $ 247,133 |
Schedule of gross realized gains and losses and the proceeds | Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Realized gains from sales, maturities and calls of securities: Gross realized gains $ 3 $ 1 $ 7 $ 5 Gross realized losses — — — — Net realized gains $ 3 $ 1 $ 7 $ 5 Proceeds from sales, maturities, calls and paydowns of securities $ 31,717 $ 17,982 $ 70,780 $ 33,639 |
Schedule of securities in an unrealized loss position | Securities in an unrealized loss position at June 30, 2020, by duration of the period of the unrealized loss, are shown below. Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Loss Value Loss Value Loss U.S. government agencies and corporations $ 14,320 $ 16 $ — $ — $ 14,320 $ 16 Mortgage-backed securities — — — — — — Obligations of states and political subdivisions 1,412 3 — — 1,412 3 Total temporarily impaired securities $ 15,732 $ 19 $ — $ — $ 15,732 $ 19 Securities in an unrealized loss position at December 31, 2019, by duration of the period of the unrealized loss, are shown below. Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Loss Value Loss Value Loss U.S. government agencies and corporations $ 6,256 $ 11 $ 4,094 $ 6 $ 10,350 $ 17 Mortgage-backed securities 4,099 7 10,166 36 14,265 43 Obligations of states and political subdivisions 9,187 53 1,368 6 10,555 59 Total temporarily impaired securities $ 19,542 $ 71 $ 15,628 $ 48 $ 35,170 $ 119 |
Loans (Tables)
Loans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Loans | |
Summary of major classifications of loans | June 30, December 31, (Dollars in thousands) 2020 2019 Real estate – residential mortgage $ 205,011 $ 181,295 Real estate – construction 1 72,094 54,246 Commercial, financial and agricultural 2 682,817 500,812 Equity lines 52,697 52,083 Consumer 15,722 13,756 Consumer finance 300,649 312,999 1,328,990 1,115,191 Less allowance for loan losses (36,094) (32,873) Loans, net $ 1,292,896 $ 1,082,318 1 Includes the Corporation’s real estate construction lending and consumer real estate lot lending. 2 Includes the Corporation’s commercial real estate lending, land acquisition and development lending, builder line lending and commercial business lending. |
Schedule of acquired loans | June 30, 2020 December 31, 2019 Acquired Loans - Acquired Loans - Acquired Loans - Acquired Loans - Purchased Purchased Acquired Loans - Purchased Purchased Acquired Loans - (Dollars in thousands) Credit Impaired Performing Total Credit Impaired Performing Total Outstanding principal balance $ 18,591 $ 116,971 $ 135,562 $ 6,262 $ 27,839 $ 34,101 Carrying amount Real estate – residential mortgage $ 1,814 $ 22,448 $ 24,262 $ 107 $ 7,035 $ 7,142 Real estate – construction — 3,762 3,762 — — — Commercial, financial and agricultural 1 5,452 74,254 79,706 563 11,338 11,901 Equity lines 77 11,767 11,844 35 8,046 8,081 Consumer 488 2,317 2,805 — 3 3 Total acquired loans $ 7,831 $ 114,548 $ 122,379 $ 705 $ 26,422 $ 27,127 1 Includes acquired loans classified by the Corporation as commercial real estate lending and commercial business lending. |
Summary of change in the accretable yield of loans classified as purchased credit impaired (PCI) | Six Months Ended June 30, (Dollars in thousands) 2020 2019 Accretable yield, balance at beginning of period $ 4,721 $ 5,987 Additions 3,372 — Accretion (1,687) (1,760) Reclassification of nonaccretable difference due to improvement in expected cash flows 923 727 Other changes, net 115 349 Accretable yield, balance at end of period $ 7,444 $ 5,303 |
Schedule of loans on nonaccrual status | June 30, December 31, (Dollars in thousands) 2020 2019 Real estate – residential mortgage $ 980 $ 1,526 Commercial, financial and agricultural: Commercial business lending — 11 Equity lines 244 229 Consumer 542 118 Consumer finance 369 611 Total loans on nonaccrual status $ 2,135 $ 2,495 |
Schedule of past due status of loans | The past due status of loans as of June 30, 2020 was as follows: 90+ Days 30 - 59 Days 60 - 89 Days 90+ Days Total Past Due and (Dollars in thousands) Past Due Past Due Past Due Past Due PCI Current 1 Total Loans Accruing Real estate – residential mortgage $ 537 $ 285 $ 880 $ 1,702 $ 1,814 $ 201,495 $ 205,011 $ 291 Real estate – construction: Construction lending — — — — — 56,382 56,382 — Consumer lot lending — — — — — 15,712 15,712 — Commercial, financial and agricultural: Commercial real estate lending 232 — — 232 5,452 415,999 421,683 — Land acquisition and development lending — — — — — 38,121 38,121 — Builder line lending — — — — — 22,172 22,172 — Commercial business lending — — — — — 200,841 200,841 — Equity lines 47 — 50 97 76 52,524 52,697 — Consumer — 57 — 57 489 15,176 15,722 — Consumer finance 5,096 705 369 6,170 — 294,479 300,649 — Total $ 5,912 $ 1,047 $ 1,299 $ 8,258 $ 7,831 $ 1,312,901 $ 1,328,990 $ 291 1 For the purposes of the table above, “Current” includes loans that are 1-29 days past due. The table above includes nonaccrual loans that are current of $649,000, 60-89 days past due of $19,000 and 90+ days past due of $1.04 million, as well as nonaccrual loans that are PCI of $427,000. The past due status of loans as of December 31, 2019 was as follows: 90+ Days 30 - 59 Days 60 - 89 Days 90+ Days Total Past Due and (Dollars in thousands) Past Due Past Due Past Due Past Due PCI Current 1 Total Loans Accruing Real estate – residential mortgage $ 1,428 $ 161 $ 1,016 $ 2,605 $ 107 $ 178,583 $ 181,295 $ — Real estate – construction: Construction lending — — — — — 40,943 40,943 — Consumer lot lending — — — — — 13,303 13,303 — Commercial, financial and agricultural: Commercial real estate lending — — — — 563 325,991 326,554 — Land acquisition and development lending — — — — — 42,891 42,891 — Builder line lending — — — — — 26,373 26,373 — Commercial business lending 73 18 — 91 — 104,903 104,994 — Equity lines 229 56 223 508 35 51,540 52,083 109 Consumer 20 10 — 30 — 13,726 13,756 — Consumer finance 11,034 1,420 611 13,065 — 299,934 312,999 — Total $ 12,784 $ 1,665 $ 1,850 $ 16,299 $ 705 $ 1,098,187 $ 1,115,191 $ 109 1 For the purposes of the table above, “Current” includes loans that are 1-29 days past due. The table above includes nonaccrual loans that are current of $547,000, 30-59 days past due of $197,000, 60-89 days past due of $10,000 and 90+ days past due of $1.74 million. |
Schedule of impaired loans | Impaired loans, which included TDRs of $3.79 million, and the related allowance at June 30, 2020 were as follows: Recorded Recorded Investment Investment Average Unpaid in Loans in Loans Balance- Interest Principal without with Related Impaired Income (Dollars in thousands) Balance Specific Reserve Specific Reserve Allowance Loans Recognized Real estate – residential mortgage $ 2,892 $ 1,072 $ 1,677 $ 69 $ 2,875 $ 44 Commercial, financial and agricultural: Commercial real estate lending 1,401 — 1,401 72 1,409 37 Equity lines 121 113 — — 120 1 Consumer 126 — 114 107 115 — Total $ 4,540 $ 1,185 $ 3,192 $ 248 $ 4,519 $ 82 Impaired loans, which included TDRs of $4.35 million, and the related allowance at December 31, 2019 were as follows: Recorded Recorded Investment Investment Average Unpaid in Loans in Loans Balance- Interest Principal without with Related Impaired Income (Dollars in thousands) Balance Specific Reserve Specific Reserve Allowance Loans Recognized Real estate – residential mortgage $ 3,891 $ 2,192 $ 1,479 $ 72 $ 3,506 $ 155 Commercial, financial and agricultural: Commercial real estate lending 1,459 4 1,447 77 1,581 82 Equity lines 31 31 — — 32 2 Consumer 130 — 121 118 123 — Total $ 5,511 $ 2,227 $ 3,047 $ 267 $ 5,242 $ 239 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Allowance for Loan Losses | |
Schedule of changes in the allowance for loan losses | The following table presents the changes in the allowance for loan losses by major classification during the six months ended June 30, 2020: Real Estate Commercial, Residential Real Estate Financial & Equity Consumer (Dollars in thousands) Mortgage Construction Agricultural Lines Consumer Finance Total Allowance for loan losses: Balance at December 31, 2019 $ 2,080 $ 681 $ 7,121 $ 733 $ 465 $ 21,793 $ 32,873 Provision charged to operations 285 302 1,724 56 33 3,850 6,250 Loans charged off (4) — (18) — (133) (5,422) (5,577) Recoveries of loans previously charged off 64 — 2 — 105 2,377 2,548 Balance at June 30, 2020 $ 2,425 $ 983 $ 8,829 $ 789 $ 470 $ 22,598 $ 36,094 The following table presents the changes in the allowance for loan losses by major classification during the six months ended June 30, 2019: Real Estate Commercial, Residential Real Estate Financial & Equity Consumer (Dollars in thousands) Mortgage Construction Agricultural Lines Consumer Finance Total Allowance for loan losses: Balance at December 31, 2018 $ 2,246 $ 727 $ 6,688 $ 1,106 $ 257 $ 22,999 $ 34,023 Provision (credited) charged to operations (68) 23 218 (225) 162 4,095 4,205 Loans charged off (45) — (29) — (162) (6,966) (7,202) Recoveries of loans previously charged off 9 — 3 — 115 2,248 2,375 Balance at June 30, 2019 $ 2,142 $ 750 $ 6,880 $ 881 $ 372 $ 22,376 $ 33,401 |
Schedule of balance of the allowance for loan losses and the balance of loans by impairment methodology | The following table presents, as of June 30, 2020, the balance of the allowance for loan losses and the balance of loans by impairment methodology. Real Estate Commercial, Residential Real Estate Financial & Equity Consumer (Dollars in thousands) Mortgage Construction Agricultural Lines Consumer Finance Total Allowance balance attributable to loans: Individually evaluated for impairment $ 69 $ — $ 72 $ — $ 107 $ — $ 248 Collectively evaluated for impairment 2,356 983 8,757 789 363 22,598 35,846 Acquired loans - PCI — — — — — — — Total allowance $ 2,425 $ 983 $ 8,829 $ 789 $ 470 $ 22,598 $ 36,094 Loans: Individually evaluated for impairment $ 2,749 $ — $ 1,401 $ 113 $ 114 $ — $ 4,377 Collectively evaluated for impairment 200,448 72,094 675,964 52,508 15,119 300,649 1,316,782 Acquired loans - PCI 1,814 — 5,452 76 489 — 7,831 Total loans $ 205,011 $ 72,094 $ 682,817 $ 52,697 $ 15,722 $ 300,649 $ 1,328,990 The following table presents, as of December 31, 2019, the balance of the allowance for loan losses, the allowance by impairment methodology, total loans and loans by impairment methodology. Real Estate Commercial, Residential Real Estate Financial & Equity Consumer (Dollars in thousands) Mortgage Construction Agricultural Lines Consumer Finance Total Allowance balance attributable to loans: Individually evaluated for impairment $ 72 $ — $ 77 $ — $ 118 $ — $ 267 Collectively evaluated for impairment 2,008 681 7,044 733 347 21,793 32,606 Acquired loans - PCI — — — — — — — Total allowance $ 2,080 $ 681 $ 7,121 $ 733 $ 465 $ 21,793 $ 32,873 Loans: Individually evaluated for impairment $ 3,671 $ — $ 1,451 $ 31 $ 121 $ — $ 5,274 Collectively evaluated for impairment 177,517 54,246 498,798 52,017 13,635 312,999 1,109,212 Acquired loans - PCI 107 — 563 35 — — 705 Total loans $ 181,295 $ 54,246 $ 500,812 $ 52,083 $ 13,756 $ 312,999 $ 1,115,191 |
Schedule of loans by credit quality indicators | Loans by credit quality indicators as of June 30, 2020 were as follows: Special Substandard (Dollars in thousands) Pass Mention Substandard Nonaccrual Total 1 Real estate – residential mortgage $ 201,678 $ 1,511 $ 842 $ 980 $ 205,011 Real estate – construction: Construction lending 56,382 — — — 56,382 Consumer lot lending 15,712 — — — 15,712 Commercial, financial and agricultural: Commercial real estate lending 393,105 26,125 2,453 — 421,683 Land acquisition and development lending 30,575 7,546 — — 38,121 Builder line lending 22,172 — — — 22,172 Commercial business lending 196,755 4,086 — — 200,841 Equity lines 52,340 105 8 244 52,697 Consumer 15,119 61 — 542 15,722 $ 983,838 $ 39,434 $ 3,303 $ 1,766 $ 1,028,341 1 At June 30, 2020, the Corporation did not have any loans classified as Doubtful or Loss. Included in the table above are loans purchased in connection with the acquisition of Peoples of $93.84 million pass rated, $1.77 million special mention, $2.91 million substandard and $427,000 substandard nonaccrual. Non- (Dollars in thousands) Performing Performing Total Consumer finance $ 300,280 $ 369 $ 300,649 Loans by credit quality indicators as of December 31, 2019 were as follows: Special Substandard (Dollars in thousands) Pass Mention Substandard Nonaccrual Total 1 Real estate – residential mortgage $ 177,049 $ 1,839 $ 881 $ 1,526 $ 181,295 Real estate – construction: Construction lending 40,943 — — — 40,943 Consumer lot lending 13,303 — — — 13,303 Commercial, financial and agricultural: Commercial real estate lending 323,218 3,266 70 — 326,554 Land acquisition and development lending 33,870 9,021 — — 42,891 Builder line lending 25,995 378 — — 26,373 Commercial business lending 104,291 692 — 11 104,994 Equity lines 51,662 181 11 229 52,083 Consumer 13,632 6 — 118 13,756 $ 783,963 $ 15,383 $ 962 $ 1,884 $ 802,192 1 At December 31, 2019, the Corporation did not have any loans classified as Doubtful or Loss. Non- (Dollars in thousands) Performing Performing Total Consumer finance $ 312,388 $ 611 $ 312,999 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Other Intangible Assets | |
Schedule of changes in goodwill, by reporting unit | Community Consumer (Dollars in thousands) Banking Finance Total Balance as of January 1, 2020 $ 3,702 $ 10,723 $ 14,425 Acquisition of Peoples Bankshares, Incorporated 10,766 — 10,766 Balance at June 30, 2020 $ 14,468 $ 10,723 $ 25,191 |
Schedule of gross carrying amounts and accumulated amortization of other intangible assets | June 30, December 31, 2020 2019 Gross Gross Carrying Accumulated Carrying Accumulated (Dollars in thousands) Amount Amortization Amount Amortization Amortized intangible assets: Core deposit intangibles $ 1,711 $ (86) $ — $ — Other intangibles 1,405 (573) 1,405 (493) Total $ 3,116 $ (659) $ 1,405 $ (493) |
Equity, Other Comprehensive I_2
Equity, Other Comprehensive Income and Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity, Other Comprehensive Income and Earnings Per Share | |
Schedule of the components of accumulated other comprehensive loss, net of deferred taxes | June 30, December 31, (Dollars in thousands) 2020 2019 Net unrealized gains on securities $ 4,705 $ 1,560 Net unrecognized losses on cash flow hedges (1,654) (69) Net unrecognized losses on defined benefit plan (3,689) (3,740) Total accumulated other comprehensive loss, net $ (638) $ (2,249) |
Schedule of components earnings per share calculations | Three Months Ended June 30, (Dollars in thousands) 2020 2019 Net income attributable to C&F Financial Corporation $ 3,746 $ 5,843 Weighted average shares outstanding — 3,647,707 3,463,277 Six Months Ended June 30, (Dollars in thousands) 2020 2019 Net income attributable to C&F Financial Corporation $ 7,324 $ 9,614 Weighted average shares outstanding — 3,646,161 3,473,875 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Employee Benefit Plans | |
Schedule of net periodic benefit costs | Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Components of net periodic benefit cost: Service cost, included in salaries and employee benefits $ 415 $ 316 $ 801 $ 609 Other components of net periodic benefit cost: Interest cost 140 151 275 304 Expected return on plan assets (371) (319) (745) (649) Amortization of prior service credit (17) (17) (34) (34) Amortization of net obligation at transition — — — — Recognized net actuarial losses 57 52 99 94 Other components of net periodic benefit cost, included in other noninterest income (191) (133) (405) (285) Net periodic benefit cost $ 224 $ 183 $ 396 $ 324 |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value of Assets and Liabilities | |
Schedule of balances of financial assets and liabilities measured at fair value on a recurring basis | June 30, 2020 Fair Value Measurements Using Assets/Liabilities at (Dollars in thousands) Level 1 Level 2 Level 3 Fair Value Assets: Securities available for sale U.S. government agencies and corporations $ — $ 37,205 $ — $ 37,205 Mortgage-backed securities — 106,249 — 106,249 Obligations of states and political subdivisions — 103,679 — 103,679 Total securities available for sale — 247,133 — 247,133 Loans held for sale — 180,137 — 180,137 Derivatives IRLC — 3,701 — 3,701 Interest rate swaps on loans — 9,743 — 9,743 Total assets $ — $ 440,714 $ — $ 440,714 Liabilities: Derivatives Interest rate swaps on loans $ — $ 9,743 $ — $ 9,743 Cash flow hedges — 2,273 — 2,273 Forward sales of TBA securities — 93 — 93 Total liabilities $ — $ 12,109 $ — $ 12,109 December 31, 2019 Fair Value Measurements Using Assets/Liabilities at (Dollars in thousands) Level 1 Level 2 Level 3 Fair Value Assets: Securities available for sale U.S. government agencies and corporations $ — $ 21,440 $ — $ 21,440 Mortgage-backed securities — 86,585 — 86,585 Obligations of states and political subdivisions — 81,708 — 81,708 Total securities available for sale — 189,733 — 189,733 Loans held for sale — 90,500 — 90,500 Derivatives IRLC — 1,083 — 1,083 Interest rate swaps on loans — 2,462 — 2,462 Total assets $ — $ 283,778 $ — $ 283,778 Liabilities: Derivatives Interest rate swaps on loans $ — $ 2,462 $ — $ 2,462 Cash flow hedges — 145 — 145 Forward sales of TBA securities — 25 — 25 Total liabilities $ — $ 2,632 $ — $ 2,632 |
Schedule of balances of assets measured at fair value on a nonrecurring basis | June 30, 2020 Fair Value Measurements Using Assets at Fair (Dollars in thousands) Level 1 Level 2 Level 3 Value Other real estate owned, net $ — $ — $ 268 $ 268 Total $ — $ — $ 268 $ 268 December 31, 2019 Fair Value Measurements Using Assets at Fair (Dollars in thousands) Level 1 Level 2 Level 3 Value Impaired loans, net $ — $ — $ 102 $ 102 Other real estate owned, net — — 268 268 Total $ — $ — $ 370 $ 370 |
Schedule of quantitative information about Level 3 fair value measurements for financial assets measured at fair value on a nonrecurring basis | Fair Value Measurements at June 30, 2020 (Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Inputs Range (Weighted Average) 1 Other real estate owned, net $ 268 Appraisals Discount to reflect current market conditions and estimated selling costs 33% -75% (45%) Total $ 268 1 The weighted average of unobservable inputs is calculated based on the relative asset fair values. |
Schedule of carrying amounts and estimated fair values of financial instruments | Carrying Fair Value Measurements at June 30, 2020 Using Total Fair (Dollars in thousands) Value Level 1 Level 2 Level 3 Value Financial assets: Cash and short-term investments $ 80,300 $ 80,300 $ — $ — $ 80,300 Securities available for sale 247,133 — 247,133 — 247,133 Loans, net 1,292,896 — — 1,299,598 1,299,598 Loans held for sale 180,137 — 180,137 — 180,137 Derivatives IRLC 3,701 — 3,701 — 3,701 Interest rate swaps on loans 9,743 — 9,743 — 9,743 Bank-owned life insurance 19,862 — 19,862 — 19,862 Accrued interest receivable 8,104 8,104 — — 8,104 Financial liabilities: Demand deposits 1,153,248 1,153,248 — — 1,153,248 Time deposits 492,541 — 501,932 — 501,932 Borrowings 91,336 — 92,667 — 92,667 Derivatives Cash flow hedges 2,273 — 2,273 — 2,273 Interest rate swaps on loans 9,743 — 9,743 — 9,743 Forward sales of TBA securities 93 — 93 — 93 Accrued interest payable 1,210 1,210 — — 1,210 Carrying Fair Value Measurements at December 31, 2019 Using Total Fair (Dollars in thousands) Value Level 1 Level 2 Level 3 Value Financial assets: Cash and short-term investments $ 165,433 $ 165,433 $ — $ — $ 165,433 Securities available for sale 189,733 — 189,733 — 189,733 Loans, net 1,082,318 — — 1,082,783 1,082,783 Loans held for sale 90,500 — 90,500 — 90,500 Derivatives IRLC 1,083 — 1,083 — 1,083 Interest rate swaps on loans 2,462 — 2,462 — 2,462 Bank-owned life insurance 16,044 — 16,044 — 16,044 Accrued interest receivable 6,776 6,776 — — 6,776 Financial liabilities: Demand deposits 869,194 869,194 — — 869,194 Time deposits 422,056 — 423,605 — 423,605 Borrowings 161,170 — 154,964 — 154,964 Derivatives Cash flow hedges 145 — 145 — 145 Interest rate swaps on loans 2,462 — 2,462 — 2,462 Forward sales of TBA securities 25 — 25 25 Accrued interest payable 1,291 1,291 — — 1,291 |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Segments | |
Schedule of segment reporting information, by segment | Three Months Ended June 30, 2020 Community Mortgage Consumer (Dollars in thousands) Banking Banking Finance Other Eliminations Consolidated Revenues: Interest income $ 14,894 $ 1,097 $ 9,689 $ — $ (2,096) $ 23,584 Gains on sales of loans — 4,605 — — — 4,605 Other noninterest income 2,221 2,387 80 2,535 — 7,223 Total operating income 17,115 8,089 9,769 2,535 (2,096) 35,412 Expenses: Provision for loan losses 1,400 — 2,200 — — 3,600 Interest expense 2,718 280 2,090 338 (2,096) 3,330 Salaries and employee benefits 7,640 2,272 2,134 2,308 — 14,354 Depreciation and amortization 829 73 45 43 — 990 Other noninterest expenses 5,020 2,166 1,057 205 — 8,448 Total operating expenses 17,607 4,791 7,526 2,894 (2,096) 30,722 Income (loss) before income taxes (492) 3,298 2,243 (359) — 4,690 Income tax expense (benefit) (560) 977 605 (75) — 947 Net income (loss) $ 68 $ 2,321 $ 1,638 $ (284) $ — $ 3,743 Total assets $ 1,860,367 $ 192,987 $ 301,372 $ 21,834 $ (393,356) $ 1,983,204 Capital expenditures $ 1,568 $ 32 $ 305 $ — $ — $ 1,905 Three Months Ended June 30, 2019 Community Mortgage Consumer (Dollars in thousands) Banking Banking Finance Other Eliminations Consolidated Revenues: Interest income $ 15,419 $ 669 $ 10,365 $ 2 $ (2,179) $ 24,276 Gains on sales of loans — 2,955 — — — 2,955 Other noninterest income 2,893 1,335 110 909 — 5,247 Total operating income 18,312 4,959 10,475 911 (2,179) 32,478 Expenses: Provision for loan losses 110 — 1,700 — — 1,810 Interest expense 2,493 409 2,618 310 (2,179) 3,651 Salaries and employee benefits 6,873 1,611 2,069 942 — 11,495 Depreciation and amortization 758 59 50 (35) — 832 Other noninterest expenses 4,382 1,276 1,361 203 — 7,222 Total operating expenses 14,616 3,355 7,798 1,420 (2,179) 25,010 Income (loss) before income taxes 3,696 1,604 2,677 (509) — 7,468 Income tax expense (benefit) 625 422 728 (149) — 1,626 Net income (loss) $ 3,071 $ 1,182 $ 1,949 $ (360) $ — $ 5,842 Total assets $ 1,386,332 $ 101,554 $ 309,705 $ 19,696 $ (249,291) $ 1,567,996 Capital expenditures $ 566 $ 52 $ 32 $ 67 $ — $ 717 Six Months Ended June 30, 2020 Community Mortgage Consumer (Dollars in thousands) Banking Banking Finance Other Eliminations Consolidated Revenues: Interest income $ 30,809 $ 1,758 $ 19,790 $ — $ (3,995) $ 48,362 Gains on sales of loans — 8,281 — — — 8,281 Other noninterest income 4,853 3,998 197 1,247 — 10,295 Total operating income 35,662 14,037 19,987 1,247 (3,995) 66,938 Expenses: Provision for loan losses 2,400 — 3,850 — — 6,250 Interest expense 5,862 585 4,376 677 (3,995) 7,505 Salaries and employee benefits 15,700 4,117 4,377 977 — 25,171 Depreciation and amortization 1,635 145 91 86 — 1,957 Other noninterest expenses 10,020 3,817 2,398 514 — 16,749 Total operating expenses 35,617 8,664 15,092 2,254 (3,995) 57,632 Income (loss) before income taxes 45 5,373 4,895 (1,007) — 9,306 Income tax expense (benefit) (593) 1,509 1,327 (319) — 1,924 Net income (loss) $ 638 $ 3,864 $ 3,568 $ (688) $ — $ 7,382 Total assets $ 1,860,367 $ 192,987 $ 301,372 $ 21,834 $ (393,356) $ 1,983,204 Capital expenditures $ 2,320 $ 326 $ 807 $ — $ — $ 3,453 Six Months Ended June 30, 2019 Community Mortgage Consumer (Dollars in thousands) Banking Banking Finance Other Eliminations Consolidated Revenues: Interest income $ 29,743 $ 1,019 $ 20,510 $ 4 $ (4,049) $ 47,227 Gains on sales of loans — 5,091 — — — 5,091 Other noninterest income 5,331 2,173 239 2,471 — 10,214 Total operating income 35,074 8,283 20,749 2,475 (4,049) 62,532 Expenses: Provision for loan losses 110 — 4,095 — — 4,205 Interest expense 4,668 572 5,169 595 (4,049) 6,955 Salaries and employee benefits 13,851 2,758 4,254 2,539 — 23,402 Depreciation and amortization 1,593 121 102 10 — 1,826 Other noninterest expenses 8,450 2,458 2,684 406 — 13,998 Total operating expenses 28,672 5,909 16,304 3,550 (4,049) 50,386 Income (loss) before income taxes 6,402 2,374 4,445 (1,075) — 12,146 Income tax expense (benefit) 1,041 625 1,211 (344) — 2,533 Net income (loss) $ 5,361 $ 1,749 $ 3,234 $ (731) $ — $ 9,613 Total assets $ 1,386,332 $ 101,554 $ 309,705 $ 19,696 $ (249,291) $ 1,567,996 Capital expenditures $ 1,288 $ 76 $ 40 $ 67 $ — $ 1,471 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Financial Instruments | |
Schedule of key elements of derivative instruments other than forward sales of mortgage loans | June 30, 2020 Notional (Dollars in thousands) Amount Assets Liabilities Cash flow hedges: Interest rate swap contracts $ 25,000 $ — $ 2,273 Not designated as hedges: Customer-related interest rate swap contracts: Matched interest rate swaps with borrower 85,282 9,743 — Matched interest rate swaps with counterparty 85,282 — 9,743 Mortgage banking contracts: IRLCs 247,871 3,701 — Forward sales of TBA securities 20,750 — 93 December 31, 2019 Notional (Dollars in thousands) Amount Assets Liabilities Cash flow hedges: Interest rate swap contracts $ 25,000 $ — $ 145 Not designated as hedges: Customer-related interest rate swap contracts: Matched interest rate swaps with borrower 74,266 2,454 8 Matched interest rate swaps with counterparty 74,266 8 2,454 Mortgage banking contracts: IRLCs 75,073 1,083 — Forward sales of TBA securities 24,000 — 25 |
Other Noninterest Expenses (Tab
Other Noninterest Expenses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Noninterest Expenses | |
Schedule of other noninterest expense | Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Data processing fees $ 2,448 $ 1,974 $ 4,842 $ 3,896 Professional fees 738 789 1,718 1,353 Mortgage banking loan processing expenses 780 388 1,264 683 Telecommunication expenses 409 330 781 648 Marketing and advertising expenses 348 435 838 808 Travel and educational expenses 100 304 544 706 All other noninterest expenses 2,048 1,686 3,825 3,392 Total other noninterest expenses $ 6,871 $ 5,906 $ 13,812 $ 11,486 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Nature of Operations and Business Combination (Details) $ in Thousands | Jan. 01, 2020USD ($) | Jun. 30, 2020subsidiary |
Peoples Bankshares, Incorporated (Peoples) | ||
Nature of Operations | ||
Aggregate purchase price | $ | $ 22,191 | |
C&F Bank | ||
Nature of Operations | ||
Number of wholly owned subsidiaries | subsidiary | 5 | |
C&F Mortgage | C&F Select LLC | ||
Nature of Operations | ||
Interest owned (as a percent) | 51.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||||
Right of use asset and lease liability measured at commencement of the lease | $ 2,180 | $ 2,778 | $ 1,048 | |
Operating leases, Right-of-use assets | $ 2,491 | $ 2,491 | $ 2,785 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets | ||
Operating leases, Lease liabilities | $ 2,597 | $ 2,597 | $ 2,813 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities | ||
Finance leases, Right of use assets | $ 2,172 | $ 2,172 | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets | ||
Finance Lease, Lease liabilities | $ 2,185 | $ 2,185 | ||
Finance Lease, Liability, Statement of Financial Position [Extensible List] | Long-term Borrowings | Long-term Borrowings |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Income taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |||
Effective income tax rate (as a percent) | 20.70% | 20.90% | |
Income tax benefits from a change in tax law | $ 303,000 | $ 303,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Share-Based Compensation (Details) - Restricted Stock | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | |
Share-based compensation | ||
Compensation expense before tax | $ 312,000 | $ 701,000 |
Compensation expense after tax | 217,000 | 435,000 |
Unrecognized compensation expense | $ 3,300,000 | $ 3,300,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Restricted Stock Activity (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Shares | ||
Unvested, beginning of period (in shares) | 142,020 | |
Unvested, end of period (in shares) | 137,705 | |
Restricted Stock | ||
Shares | ||
Unvested, beginning of period (in shares) | 142,020 | 139,455 |
Granted (in shares) | 14,650 | 16,100 |
Vested (in shares) | (16,230) | (16,290) |
Forfeited | (2,735) | (410) |
Unvested, end of period (in shares) | 137,705 | 138,855 |
Weighted-Average Grant Date Fair Value | ||
Nonvested, beginning of period (in dollars per share) | $ 48.88 | $ 45.75 |
Granted (in dollars per share) | 53.22 | 51.73 |
Vested (in dollars per share) | 39.97 | 41.08 |
Forfeited (in dollars per share) | 5.89 | 53.28 |
Nonvested, end of period (in dollars per share) | $ 50.33 | $ 46.97 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Paycheck Protection Program (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Minimum | |
Fees as percentage of principal amount (as a percent) | 1.00% |
Maximum | |
Fees as percentage of principal amount (as a percent) | 5.00% |
Business Combination - Consider
Business Combination - Consideration (Details) - Peoples Bankshares, Incorporated (Peoples) | Jan. 01, 2020USD ($)shares |
Business Combination | |
Shares received for each share of common stock | shares | 0.5366 |
Amount received for each share of common stock | $ | $ 27 |
Cash consideration paid | $ | $ 10,579,000 |
Common stock to shareholders of acquiree | shares | 209,871 |
Business Combination - Purchase
Business Combination - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | [1] |
Identifiable liabilities assumed | ||||
Goodwill resulting from acquisition | $ 25,191 | $ 14,425 | ||
Peoples Bankshares, Incorporated (Peoples) | ||||
Purchase price | ||||
Cash | $ 10,579 | |||
Stock | 11,612 | |||
Total purchase price | 22,191 | |||
Identifiable assets acquired | ||||
Cash and cash equivalents | 29,680 | |||
Securities available for sale | 17,169 | |||
Loans | 124,195 | |||
Accrued interest receivable | 430 | |||
Corporate premises and equipment | 3,105 | |||
Other real estate owned | 281 | |||
Core deposit intangible asset | 1,711 | |||
Bank-owned life insurance | 3,591 | |||
Investment in small business investment company | 1,493 | |||
Other receivables | 5,234 | |||
Other assets | 3,658 | |||
Total identifiable assets acquired | 190,547 | |||
Identifiable liabilities assumed | ||||
Demand and savings deposits | 94,798 | |||
Time deposits | 77,018 | |||
Borrowings | 4,245 | |||
Accrued interest payable | 260 | |||
Salaries, benefits and deferred compensation | 2,054 | |||
Other liabilities | 747 | |||
Total identifiable liabilities assumed | 179,122 | |||
Net identifiable assets assumed | 11,425 | |||
Goodwill resulting from acquisition | $ 10,766 | |||
Amortization period (in years) | 15 years | |||
[1] | Derived from audited consolidated financial statements. |
Business Combination - Loans, C
Business Combination - Loans, Core Deposit Intangible and Deposits (Details) - USD ($) | Jan. 01, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Business Combination | |||
Outstanding principal balance | $ 135,562,000 | $ 34,101,000 | |
Loans, allowance for loan losses | 36,094,000 | 32,873,000 | |
Information about PCI loans acquired | |||
Contractual principal and interest due | $ 20,310,000 | ||
Nonaccretable difference | (7,679,000) | ||
Expected cash flows | 12,631,000 | ||
Accretable yield | (3,372,000) | ||
Purchase credit impaired loans - estimated fair value | $ 9,259,000 | ||
Maximum | |||
Information about PCI loans acquired | |||
Maturity of deposits | 5 years | ||
PCI Loans | |||
Business Combination | |||
Outstanding principal balance | $ 18,591,000 | $ 6,262,000 | |
Peoples Bankshares, Incorporated (Peoples) | |||
Business Combination | |||
Outstanding principal balance | $ 131,920,000 | ||
Estimated fair value of loans acquired | 124,195,000 | ||
Loans, allowance for loan losses | 2,870,000 | ||
Information about PCI loans acquired | |||
Core deposit intangible asset | $ 1,711,000 | ||
Percentage of CDI to non-maturity deposits | 1.80% | ||
Premium of deposits | $ 557,000 | ||
Amortization period | 2 years | ||
Peoples Bankshares, Incorporated (Peoples) | Minimum | |||
Information about PCI loans acquired | |||
Maturity of deposits | 3 months | ||
Peoples Bankshares, Incorporated (Peoples) | PCI Loans | |||
Business Combination | |||
Outstanding principal balance | $ 4,280,000 | ||
Estimated fair value of loans acquired | $ 635,000 |
Business Combination - Pro form
Business Combination - Pro forma (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Unaudited pro forma information | ||
After tax merger related expenses | $ 28 | $ 28 |
After tax merger related expenses per share (in US$ per share) | $ (0.01) | $ (0.01) |
Total revenues (net interest income plus nonintererest income) | $ 30,808 | $ 59,463 |
Net income | $ 5,969 | $ 10,258 |
Net income per share, basic and diluted | $ 1.63 | $ 2.78 |
Business Combination - Merger r
Business Combination - Merger related costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Business Combination | ||||
Merger related costs | $ 308,000 | $ 0 | $ 898,000 | $ 0 |
Peoples Bankshares, Incorporated (Peoples) | ||||
Business Combination | ||||
Aggregated merger related costs | 2,100,000 | 2,100,000 | ||
Aggregated merger related costs, after Income Taxes | 1,780,000 | 1,780,000 | ||
Merger related costs | 439,000 | $ 0 | 1,400,000 | $ 0 |
Merger related costs, after income taxes | $ 347,000 | $ 1,130,000 |
Securities - Available for sale
Securities - Available for sale Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | $ 241,178 | $ 187,759 | |
Gross Unrealized Gains | 5,974 | 2,093 | |
Gross Unrealized Losses | (19) | (119) | |
Fair Value | 247,133 | 189,733 | [1] |
U.S. government agencies and corporations | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 37,068 | 21,454 | |
Gross Unrealized Gains | 153 | 3 | |
Gross Unrealized Losses | (16) | (17) | |
Fair Value | 37,205 | 21,440 | |
Mortgage-backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 102,749 | 85,649 | |
Gross Unrealized Gains | 3,500 | 979 | |
Gross Unrealized Losses | (43) | ||
Fair Value | 106,249 | 86,585 | |
Obligations of states and political subdivisions | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 101,361 | 80,656 | |
Gross Unrealized Gains | 2,321 | 1,111 | |
Gross Unrealized Losses | (3) | (59) | |
Fair Value | $ 103,679 | $ 81,708 | |
[1] | Derived from audited consolidated financial statements. |
Securities - Maturities and Rea
Securities - Maturities and Realized Gains and Losses (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($)security | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($)security | Dec. 31, 2019USD ($) | ||
Amortized Cost | ||||||
Due in one year or less | $ 63,267 | $ 63,267 | ||||
Due after one year through five years | 139,191 | 139,191 | ||||
Due after five years through ten years | 36,488 | 36,488 | ||||
Due after ten years | 2,232 | 2,232 | ||||
Amortized Cost | 241,178 | 241,178 | $ 187,759 | |||
Fair Value | ||||||
Due in one year or less | 63,568 | 63,568 | ||||
Due after one year through five years | 143,546 | 143,546 | ||||
Due after five years through ten years | 37,698 | 37,698 | ||||
Due after ten years | 2,321 | 2,321 | ||||
Fair Value | 247,133 | 247,133 | $ 189,733 | [1] | ||
Gross realized gains and losses on and the proceeds from sales, maturities and calls of securities | ||||||
Proceeds related to sales of assets acquired | 8,004 | |||||
Number of securities sales | security | 0 | 0 | ||||
Gross realized gains | 3 | $ 1 | 7 | $ 5 | ||
Net realized gains | 3 | 1 | 7 | 5 | ||
Proceeds from sales, maturities, calls and paydowns of securities | $ 31,717 | $ 17,982 | 70,780 | $ 33,639 | ||
Peoples Bankshares, Incorporated (Peoples) | ||||||
Gross realized gains and losses on and the proceeds from sales, maturities and calls of securities | ||||||
Proceeds related to sales of assets acquired | $ 5,990 | |||||
[1] | Derived from audited consolidated financial statements. |
Securities - Pledged as Collate
Securities - Pledged as Collateral (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Available for sale securities | |||
Amortized Cost | $ 241,178 | $ 187,759 | |
Fair Value | 247,133 | 189,733 | [1] |
Securities Pledged as Collateral | |||
Available for sale securities | |||
Amortized Cost | 118,550 | 126,220 | |
Fair Value | $ 122,580 | $ 127,470 | |
[1] | Derived from audited consolidated financial statements. |
Securities - Unrealized Loss Po
Securities - Unrealized Loss Positions (Details) | 6 Months Ended | |
Jun. 30, 2020USD ($)security | Dec. 31, 2019USD ($) | |
Fair value | ||
Less Than 12 Months, Fair Value | $ 15,732,000 | $ 19,542,000 |
12 Months or More, Fair Value | 15,628,000 | |
Total Fair Value | 15,732,000 | 35,170,000 |
Unrealized Loss | ||
Less Than 12 Months, Unrealized Loss | 19,000 | 71,000 |
12 Months or More, Unrealized Loss | 48,000 | |
Total Unrealized Loss | $ 19,000 | 119,000 |
Other information | ||
Number of positions considered temporarily impaired | security | 11 | |
Debt securities considered temporarily impaired | $ 15,732,000 | 35,170,000 |
Other than temporary impairment | 0 | |
U.S. government agencies and corporations | ||
Fair value | ||
Less Than 12 Months, Fair Value | 14,320,000 | 6,256,000 |
12 Months or More, Fair Value | 4,094,000 | |
Total Fair Value | 14,320,000 | 10,350,000 |
Unrealized Loss | ||
Less Than 12 Months, Unrealized Loss | 16,000 | 11,000 |
12 Months or More, Unrealized Loss | 6,000 | |
Total Unrealized Loss | 16,000 | 17,000 |
Other information | ||
Debt securities considered temporarily impaired | 14,320,000 | 10,350,000 |
Mortgage-backed securities | ||
Fair value | ||
Less Than 12 Months, Fair Value | 4,099,000 | |
12 Months or More, Fair Value | 10,166,000 | |
Total Fair Value | 14,265,000 | |
Unrealized Loss | ||
Less Than 12 Months, Unrealized Loss | 7,000 | |
12 Months or More, Unrealized Loss | 36,000 | |
Total Unrealized Loss | 43,000 | |
Other information | ||
Debt securities considered temporarily impaired | 14,265,000 | |
Obligations of states and political subdivisions | ||
Fair value | ||
Less Than 12 Months, Fair Value | 1,412,000 | 9,187,000 |
12 Months or More, Fair Value | 1,368,000 | |
Total Fair Value | 1,412,000 | 10,555,000 |
Unrealized Loss | ||
Less Than 12 Months, Unrealized Loss | 3,000 | 53,000 |
12 Months or More, Unrealized Loss | 6,000 | |
Total Unrealized Loss | 3,000 | 59,000 |
Other information | ||
Debt securities considered temporarily impaired | $ 1,412,000 | $ 10,555,000 |
Securities - Restricted Stocks
Securities - Restricted Stocks and others (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | [1] | |
Securities | |||
Investment in restricted stock | $ 3,210,000 | ||
Investment in restricted stocks | 3,209,000 | $ 3,257,000 | |
Restricted stocks, other-than-temporary impairment | $ 0 | ||
[1] | Derived from audited consolidated financial statements. |
Loans - Major Classifications o
Loans - Major Classifications of Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Loans | |||
Loans | $ 1,328,990 | $ 1,115,191 | |
Less allowance for loan losses | (36,094) | (32,873) | |
Loans, net | 1,292,896 | 1,082,318 | [1] |
Real estate - residential mortgage | |||
Loans | |||
Loans | 205,011 | 181,295 | |
Real estate - construction | |||
Loans | |||
Loans | 72,094 | 54,246 | |
Commercial, financial and agricultural | |||
Loans | |||
Loans | 682,817 | 500,812 | |
Equity lines | |||
Loans | |||
Loans | 52,697 | 52,083 | |
Consumer | |||
Loans | |||
Loans | 15,722 | 13,756 | |
Amount included related to demand deposit overdrafts | 173 | 449 | |
Consumer finance | |||
Loans | |||
Loans | $ 300,649 | $ 312,999 | |
[1] | Derived from audited consolidated financial statements. |
Loans - Loans Acquired (Details
Loans - Loans Acquired (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Loans | ||
Outstanding principal balance | $ 135,562 | $ 34,101 |
Carrying amount | ||
Total acquired loans | 122,379 | 27,127 |
Real estate - residential mortgage | ||
Carrying amount | ||
Total acquired loans | 24,262 | 7,142 |
Real estate - construction | ||
Carrying amount | ||
Total acquired loans | 3,762 | |
Commercial, financial and agricultural | ||
Carrying amount | ||
Total acquired loans | 79,706 | 11,901 |
Equity lines | ||
Carrying amount | ||
Total acquired loans | 11,844 | 8,081 |
Consumer | ||
Carrying amount | ||
Total acquired loans | 2,805 | 3 |
PCI Loans | ||
Loans | ||
Outstanding principal balance | 18,591 | 6,262 |
Carrying amount | ||
Total acquired loans | 7,831 | 705 |
PCI Loans | Real estate - residential mortgage | ||
Carrying amount | ||
Total acquired loans | 1,814 | 107 |
PCI Loans | Commercial, financial and agricultural | ||
Carrying amount | ||
Total acquired loans | 5,452 | 563 |
PCI Loans | Equity lines | ||
Carrying amount | ||
Total acquired loans | 77 | 35 |
PCI Loans | Consumer | ||
Carrying amount | ||
Total acquired loans | 488 | |
Purchased Performing Loans | ||
Loans | ||
Outstanding principal balance | 116,971 | 27,839 |
Carrying amount | ||
Total acquired loans | 114,548 | 26,422 |
Purchased Performing Loans | Real estate - residential mortgage | ||
Carrying amount | ||
Total acquired loans | 22,448 | 7,035 |
Purchased Performing Loans | Real estate - construction | ||
Carrying amount | ||
Total acquired loans | 3,762 | |
Purchased Performing Loans | Commercial, financial and agricultural | ||
Carrying amount | ||
Total acquired loans | 74,254 | 11,338 |
Purchased Performing Loans | Equity lines | ||
Carrying amount | ||
Total acquired loans | 11,767 | 8,046 |
Purchased Performing Loans | Consumer | ||
Carrying amount | ||
Total acquired loans | $ 2,317 | $ 3 |
Loans - Change in Accretable Yi
Loans - Change in Accretable Yield (Details) - PCI Loans - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Change in the accretable yield | ||
Accretable yield, balance at beginning of period | $ 4,721 | $ 5,987 |
Additions | 3,372 | |
Accretion | (1,687) | (1,760) |
Reclassification of nonaccreatable difference due to improvement in expected cash flows | 923 | 727 |
Other changes, net | 115 | 349 |
Accretable yield, balance at end of period | $ 7,444 | $ 5,303 |
Loans - Loans on Nonaccrual Sta
Loans - Loans on Nonaccrual Status (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Loans on nonaccrual status | ||
Loans on nonaccrual status | $ 2,135 | $ 2,495 |
Real estate - residential mortgage | ||
Loans on nonaccrual status | ||
Loans on nonaccrual status | 980 | 1,526 |
Commercial, financial and agricultural | Commercial business lending | ||
Loans on nonaccrual status | ||
Loans on nonaccrual status | 11 | |
Equity lines | ||
Loans on nonaccrual status | ||
Loans on nonaccrual status | 244 | 229 |
Consumer | ||
Loans on nonaccrual status | ||
Loans on nonaccrual status | 542 | 118 |
Consumer finance | ||
Loans on nonaccrual status | ||
Loans on nonaccrual status | $ 369 | $ 611 |
Loans - Past Due Status (Detail
Loans - Past Due Status (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Loans on nonaccrual status | ||
Total Past Due | $ 8,258,000 | $ 16,299,000 |
Current | 1,312,901,000 | 1,098,187,000 |
Total Loans | 1,328,990,000 | 1,115,191,000 |
90+ days past due and accruing | 291,000 | 109,000 |
Additional disclosure for nonaccrual loans | ||
Current, nonaccrual status | 649,000 | 547,000 |
Nonaccrual loans, 30-59 days past due | 197,000 | |
Nonaccrual loans, 60-89 days past due | 19,000 | 10,000 |
Nonaccrual loans, 90+ days past due | 1,040,000 | 1,740,000 |
Nonaccrual loans, PCI | 427,000 | |
PCI | ||
Loans on nonaccrual status | ||
PCI | 7,831,000 | 705,000 |
30-59 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 5,912,000 | 12,784,000 |
60-89 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 1,047,000 | 1,665,000 |
90+ Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 1,299,000 | 1,850,000 |
Real estate - residential mortgage | ||
Loans on nonaccrual status | ||
Total Past Due | 1,702,000 | 2,605,000 |
Current | 201,495,000 | 178,583,000 |
Total Loans | 205,011,000 | 181,295,000 |
90+ days past due and accruing | 291,000 | |
Real estate - residential mortgage | PCI | ||
Loans on nonaccrual status | ||
PCI | 1,814,000 | 107,000 |
Real estate - residential mortgage | 30-59 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 537,000 | 1,428,000 |
Real estate - residential mortgage | 60-89 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 285,000 | 161,000 |
Real estate - residential mortgage | 90+ Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 880,000 | 1,016,000 |
Equity lines | ||
Loans on nonaccrual status | ||
Total Past Due | 97,000 | 508,000 |
Current | 52,524,000 | 51,540,000 |
Total Loans | 52,697,000 | 52,083,000 |
90+ days past due and accruing | 109,000 | |
Equity lines | PCI | ||
Loans on nonaccrual status | ||
PCI | 76,000 | 35,000 |
Equity lines | 30-59 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 47,000 | 229,000 |
Equity lines | 60-89 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 56,000 | |
Equity lines | 90+ Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 50,000 | 223,000 |
Consumer | ||
Loans on nonaccrual status | ||
Total Past Due | 57,000 | 30,000 |
Current | 15,176,000 | 13,726,000 |
Total Loans | 15,722,000 | 13,756,000 |
Consumer | PCI | ||
Loans on nonaccrual status | ||
PCI | 489,000 | |
Consumer | 30-59 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 20,000 | |
Consumer | 60-89 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 57,000 | 10,000 |
Consumer finance | ||
Loans on nonaccrual status | ||
Total Past Due | 6,170,000 | 13,065,000 |
Current | 294,479,000 | 299,934,000 |
Total Loans | 300,649,000 | 312,999,000 |
Consumer finance | 30-59 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 5,096,000 | 11,034,000 |
Consumer finance | 60-89 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 705,000 | 1,420,000 |
Consumer finance | 90+ Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 369,000 | 611,000 |
Construction lending | Real estate - construction | ||
Loans on nonaccrual status | ||
Current | 56,382,000 | 40,943,000 |
Total Loans | 56,382,000 | 40,943,000 |
Consumer lot lending | Real estate - construction | ||
Loans on nonaccrual status | ||
Current | 15,712,000 | 13,303,000 |
Total Loans | 15,712,000 | 13,303,000 |
Commercial real estate lending | Commercial, financial and agricultural | ||
Loans on nonaccrual status | ||
Total Past Due | 232,000 | |
Current | 415,999,000 | 325,991,000 |
Total Loans | 421,683,000 | 326,554,000 |
Commercial real estate lending | Commercial, financial and agricultural | PCI | ||
Loans on nonaccrual status | ||
PCI | 5,452,000 | 563,000 |
Commercial real estate lending | Commercial, financial and agricultural | 30-59 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 232,000 | |
Land acquisition and development lending | Commercial, financial and agricultural | ||
Loans on nonaccrual status | ||
Current | 38,121,000 | 42,891,000 |
Total Loans | 38,121,000 | 42,891,000 |
Builder line lending | Commercial, financial and agricultural | ||
Loans on nonaccrual status | ||
Current | 22,172,000 | 26,373,000 |
Total Loans | 22,172,000 | 26,373,000 |
Commercial business lending | Commercial, financial and agricultural | ||
Loans on nonaccrual status | ||
Total Past Due | 91,000 | |
Current | 200,841,000 | 104,903,000 |
Total Loans | $ 200,841,000 | 104,994,000 |
Commercial business lending | Commercial, financial and agricultural | 30-59 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | 73,000 | |
Commercial business lending | Commercial, financial and agricultural | 60-89 Days Past Due | ||
Loans on nonaccrual status | ||
Total Past Due | $ 18,000 |
Loans - Troubled Debt Restructu
Loans - Troubled Debt Restructurings (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)loan | Jun. 30, 2019USD ($)loan | Jun. 30, 2020USD ($)loan | Jun. 30, 2019USD ($)loan | |
Loan modifications classified as troubled debt restructurings | ||||
Number of Loans | loan | 0 | 1 | 1 | 1 |
Recorded Investment | $ 121,000 | $ 84,000 | $ 121,000 | |
TDR payment default period | 12 months | |||
Period determining when a past due TDR becomes a subsequent default | 90 days | |||
Recorded Investment, TDR payment defaults | $ 0 | $ 0 | $ 0 | $ 0 |
C&F Bank | ||||
Loan modifications classified as troubled debt restructurings | ||||
Number of loans | loan | 200 | |||
Aggregate balance | $ 94,910,000 | $ 94,910,000 |
Loans - Impaired Loans (Details
Loans - Impaired Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Impaired loans | ||
Impaired loans, troubled debt restructurings | $ 3,790 | $ 4,350 |
Impaired loans, Unpaid Principal Balance | 4,540 | 5,511 |
Impaired loans, Recorded Investment in Loans without Specific Reserve | 1,185 | 2,227 |
Impaired loans, Recorded Investment in Loans with Specific Reserve | 3,192 | 3,047,000 |
Impaired loans, Related Allowance | 248 | 267 |
Impaired loans, Average Balance | 4,519 | 5,242 |
Impaired loans, Interest Income Recognized | 82 | 239 |
Real estate - residential mortgage | ||
Impaired loans | ||
Impaired loans, Unpaid Principal Balance | 2,892 | 3,891 |
Impaired loans, Recorded Investment in Loans without Specific Reserve | 1,072 | 2,192 |
Impaired loans, Recorded Investment in Loans with Specific Reserve | 1,677 | 1,479,000 |
Impaired loans, Related Allowance | 69 | 72 |
Impaired loans, Average Balance | 2,875 | 3,506 |
Impaired loans, Interest Income Recognized | 44 | 155 |
Commercial, financial and agricultural | Commercial real estate lending | ||
Impaired loans | ||
Impaired loans, Unpaid Principal Balance | 1,401 | 1,459 |
Impaired loans, Recorded Investment in Loans without Specific Reserve | 4 | |
Impaired loans, Recorded Investment in Loans with Specific Reserve | 1,401 | 1,447,000 |
Impaired loans, Related Allowance | 72 | 77 |
Impaired loans, Average Balance | 1,409 | 1,581 |
Impaired loans, Interest Income Recognized | 37 | 82 |
Equity lines | ||
Impaired loans | ||
Impaired loans, Unpaid Principal Balance | 121 | 31 |
Impaired loans, Recorded Investment in Loans without Specific Reserve | 113 | 31 |
Impaired loans, Average Balance | 120 | 32 |
Impaired loans, Interest Income Recognized | 1 | 2 |
Consumer | ||
Impaired loans | ||
Impaired loans, Unpaid Principal Balance | 126 | 130 |
Impaired loans, Recorded Investment in Loans with Specific Reserve | 114 | 121,000 |
Impaired loans, Related Allowance | 107 | 118 |
Impaired loans, Average Balance | $ 115 | $ 123 |
Allowance for Loan Losses - Cha
Allowance for Loan Losses - Change in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Allowance balance attributable to loans: | ||
Balance at the beginning of period | $ 32,873 | $ 34,023 |
Provision charged to operations | 6,250 | 4,205 |
Loans charged off | (5,577) | (7,202) |
Recoveries of loans previously charged off | 2,548 | 2,375 |
Balance at the end of period | 36,094 | 33,401 |
Real estate - residential mortgage | ||
Allowance balance attributable to loans: | ||
Balance at the beginning of period | 2,080 | 2,246 |
Provision charged to operations | 285 | (68) |
Loans charged off | (4) | (45) |
Recoveries of loans previously charged off | 64 | 9 |
Balance at the end of period | 2,425 | 2,142 |
Real estate - construction | ||
Allowance balance attributable to loans: | ||
Balance at the beginning of period | 681 | 727 |
Provision charged to operations | 302 | 23 |
Balance at the end of period | 983 | 750 |
Commercial, financial and agricultural | ||
Allowance balance attributable to loans: | ||
Balance at the beginning of period | 7,121 | 6,688 |
Provision charged to operations | 1,724 | 218 |
Loans charged off | (18) | (29) |
Recoveries of loans previously charged off | 2 | 3 |
Balance at the end of period | 8,829 | 6,880 |
Equity lines | ||
Allowance balance attributable to loans: | ||
Balance at the beginning of period | 733 | 1,106 |
Provision charged to operations | 56 | (225) |
Balance at the end of period | 789 | 881 |
Consumer | ||
Allowance balance attributable to loans: | ||
Balance at the beginning of period | 465 | 257 |
Provision charged to operations | 33 | 162 |
Loans charged off | (133) | (162) |
Recoveries of loans previously charged off | 105 | 115 |
Balance at the end of period | 470 | 372 |
Consumer finance | ||
Allowance balance attributable to loans: | ||
Balance at the beginning of period | 21,793 | 22,999 |
Provision charged to operations | 3,850 | 4,095 |
Loans charged off | (5,422) | (6,966) |
Recoveries of loans previously charged off | 2,377 | 2,248 |
Balance at the end of period | $ 22,598 | $ 22,376 |
Allowance for Loan Losses - All
Allowance for Loan Losses - Allowance and Loans by Impairment Methodology (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Allowance balance attributable to loans: | ||||
Individually evaluated for impairment | $ 248 | $ 267 | ||
Collectively evaluated for impairment | 35,846 | 32,606 | ||
Total allowance | 36,094 | 32,873 | $ 33,401 | $ 34,023 |
Loans: | ||||
Individually evaluated for impairment | 4,377 | 5,274 | ||
Collectively evaluated for impairment | 1,316,782 | 1,109,212 | ||
Acquired loans - PCI | 7,831 | 705 | ||
Total loans | 1,328,990 | 1,115,191 | ||
Real estate - residential mortgage | ||||
Allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 69 | 72 | ||
Collectively evaluated for impairment | 2,356 | 2,008 | ||
Total allowance | 2,425 | 2,080 | 2,142 | 2,246 |
Loans: | ||||
Individually evaluated for impairment | 2,749 | 3,671 | ||
Collectively evaluated for impairment | 200,448 | 177,517 | ||
Acquired loans - PCI | 1,814 | 107 | ||
Total loans | 205,011 | 181,295 | ||
Real estate - construction | ||||
Allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 983 | 681 | ||
Total allowance | 983 | 681 | 750 | 727 |
Loans: | ||||
Collectively evaluated for impairment | 72,094 | 54,246 | ||
Total loans | 72,094 | 54,246 | ||
Commercial, financial and agricultural | ||||
Allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 72 | 77 | ||
Collectively evaluated for impairment | 8,757 | 7,044 | ||
Total allowance | 8,829 | 7,121 | 6,880 | 6,688 |
Loans: | ||||
Individually evaluated for impairment | 1,401 | 1,451 | ||
Collectively evaluated for impairment | 675,964 | 498,798 | ||
Acquired loans - PCI | 5,452 | 563 | ||
Total loans | 682,817 | 500,812 | ||
Equity lines | ||||
Allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 789 | 733 | ||
Total allowance | 789 | 733 | 881 | 1,106 |
Loans: | ||||
Individually evaluated for impairment | 113 | 31 | ||
Collectively evaluated for impairment | 52,508 | 52,017 | ||
Acquired loans - PCI | 76 | 35 | ||
Total loans | 52,697 | 52,083 | ||
Consumer | ||||
Allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 107 | 118 | ||
Collectively evaluated for impairment | 363 | 347 | ||
Total allowance | 470 | 465 | 372 | 257 |
Loans: | ||||
Individually evaluated for impairment | 114 | 121 | ||
Collectively evaluated for impairment | 15,119 | 13,635 | ||
Acquired loans - PCI | 489 | |||
Total loans | 15,722 | 13,756 | ||
Consumer finance | ||||
Allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 22,598 | 21,793 | ||
Total allowance | 22,598 | 21,793 | $ 22,376 | $ 22,999 |
Loans: | ||||
Collectively evaluated for impairment | 300,649 | 312,999 | ||
Total loans | $ 300,649 | $ 312,999 |
Allowance for Loan Losses - Cre
Allowance for Loan Losses - Credit Quality Indicators (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Allowance for loan losses | ||
Loans, excluding consumer finance | $ 1,028,341,000 | $ 802,192,000 |
Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 983,838,000 | 783,963,000 |
Special Mention | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 39,434,000 | 15,383,000 |
Substandard | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 3,303,000 | 962,000 |
Substandard Nonaccrual | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 1,766,000 | 1,884,000 |
Real estate - residential mortgage | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 205,011,000 | 181,295,000 |
Real estate - residential mortgage | Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 201,678,000 | 177,049,000 |
Real estate - residential mortgage | Special Mention | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 1,511,000 | 1,839,000 |
Real estate - residential mortgage | Substandard | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 842,000 | 881,000 |
Real estate - residential mortgage | Substandard Nonaccrual | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 980,000 | 1,526,000 |
Real estate - construction | Construction lending | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 56,382,000 | 40,943,000 |
Real estate - construction | Construction lending | Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 56,382,000 | 40,943,000 |
Real estate - construction | Consumer lot lending | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 15,712,000 | 13,303,000 |
Real estate - construction | Consumer lot lending | Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 15,712,000 | 13,303,000 |
Commercial, financial and agricultural | Commercial real estate lending | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 421,683,000 | 326,554,000 |
Commercial, financial and agricultural | Commercial real estate lending | Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 393,105,000 | 323,218,000 |
Commercial, financial and agricultural | Commercial real estate lending | Special Mention | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 26,125,000 | 3,266,000 |
Commercial, financial and agricultural | Commercial real estate lending | Substandard | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 2,453,000 | 70,000 |
Commercial, financial and agricultural | Land acquisition and development lending | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 38,121,000 | 42,891,000 |
Commercial, financial and agricultural | Land acquisition and development lending | Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 30,575,000 | 33,870,000 |
Commercial, financial and agricultural | Land acquisition and development lending | Special Mention | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 7,546,000 | 9,021,000 |
Commercial, financial and agricultural | Builder line lending | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 22,172,000 | 26,373,000 |
Commercial, financial and agricultural | Builder line lending | Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 22,172,000 | 25,995,000 |
Commercial, financial and agricultural | Builder line lending | Special Mention | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 378,000 | |
Commercial, financial and agricultural | Commercial business lending | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 200,841,000 | 104,994,000 |
Commercial, financial and agricultural | Commercial business lending | Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 196,755,000 | 104,291,000 |
Commercial, financial and agricultural | Commercial business lending | Special Mention | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 4,086,000 | 692,000 |
Commercial, financial and agricultural | Commercial business lending | Substandard Nonaccrual | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 11,000 | |
Equity lines | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 52,697,000 | 52,083,000 |
Equity lines | Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 52,340,000 | 51,662,000 |
Equity lines | Special Mention | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 105,000 | 181,000 |
Equity lines | Substandard | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 8,000 | 11,000 |
Equity lines | Substandard Nonaccrual | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 244,000 | 229,000 |
Consumer | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 15,722,000 | 13,756,000 |
Consumer | Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 15,119,000 | 13,632,000 |
Consumer | Special Mention | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 61,000 | 6,000 |
Consumer | Substandard Nonaccrual | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 542,000 | $ 118,000 |
Peoples Bankshares, Incorporated (Peoples) | Pass | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 93,840,000 | |
Peoples Bankshares, Incorporated (Peoples) | Special Mention | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 1,770,000 | |
Peoples Bankshares, Incorporated (Peoples) | Substandard | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | 2,910,000 | |
Peoples Bankshares, Incorporated (Peoples) | Substandard Nonaccrual | ||
Allowance for loan losses | ||
Loans, excluding consumer finance | $ 427,000 |
Allowance for Loan Losses - Loa
Allowance for Loan Losses - Loans by Credit Quality Indicators - Performing and Non-Performing (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Allowance for loan losses | ||
Loans | $ 1,328,990 | $ 1,115,191 |
Consumer finance | ||
Allowance for loan losses | ||
Loans | 300,649 | 312,999 |
Consumer finance | Performing | ||
Allowance for loan losses | ||
Loans | 300,280 | 312,388 |
Consumer finance | Non-Performing | ||
Allowance for loan losses | ||
Loans | $ 369 | $ 611 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Goodwill and Other Intangible Assets | ||||
Goodwill | [1] | $ 14,425 | ||
Changes in the recorded balance of goodwill | $ 0 | 10,766 | $ 0 | |
Changes in goodwill, by reporting unit | ||||
Balance as of the beginning of the period | [1] | 14,425 | ||
Acquisition of Peoples Bankshares, Incorporated | $ 0 | 10,766 | $ 0 | |
Balance at the end of the period | 25,191 | |||
Community Banking | ||||
Goodwill and Other Intangible Assets | ||||
Goodwill | 14,468 | |||
Changes in the recorded balance of goodwill | 10,766 | |||
Changes in goodwill, by reporting unit | ||||
Balance as of the beginning of the period | 3,702 | |||
Acquisition of Peoples Bankshares, Incorporated | 10,766 | |||
Balance at the end of the period | 14,468 | |||
Consumer Finance | ||||
Goodwill and Other Intangible Assets | ||||
Goodwill | 10,723 | |||
Changes in goodwill, by reporting unit | ||||
Balance as of the beginning of the period | 10,723 | |||
Balance at the end of the period | $ 10,723 | |||
[1] | Derived from audited consolidated financial statements. |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | |
Other intangible assets | |||
Other intangible assets, net | $ 2,457,000 | $ 912,000 | [1] |
Gross carrying amounts and accumulated amortization | |||
Gross Carrying Amount | 3,116,000 | 1,405,000 | |
Accumulated Amortization | (659,000) | (493,000) | |
Core deposit intangible | |||
Gross carrying amounts and accumulated amortization | |||
Gross Carrying Amount | 1,711,000 | ||
Accumulated Amortization | (86,000) | ||
Other intangibles | |||
Gross carrying amounts and accumulated amortization | |||
Gross Carrying Amount | 1,405,000 | 1,405,000 | |
Accumulated Amortization | $ (573,000) | $ (493,000) | |
[1] | Derived from audited consolidated financial statements. |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill and Other Intangible Assets | ||||
Amortization of intangible assets | $ 83,000 | $ 63,000 | $ 166,000 | $ 141,000 |
Equity, Other Comprehensive I_3
Equity, Other Comprehensive Income and Earnings Per Share - Equity and Noncontrolling Interest (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Shareholders' Equity | |||||
Shares repurchased (in shares) | 0 | 32,779 | 8,963 | 65,186 | |
Aggregate cost of Shares repurchased | $ 1,620,000 | $ 355,000 | $ 3,290,000 | ||
Number of shares withheld from employees to satisfy tax withholding obligations | 5,069 | 4,842 | |||
Issuance of noncontrolling interest | $ 490,000 | ||||
C&F Select LLC | |||||
Shareholders' Equity | |||||
Ownership interest issued (as a percent) | 49.00% | ||||
Issuance of noncontrolling interest | $ 490,000 |
Equity, Other Comprehensive I_4
Equity, Other Comprehensive Income and Earnings Per Share - Accumulated Other Comprehensive Loss, Net (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | |
Equity, Other Comprehensive Income and Earnings Per Share | |||
Deferred taxes included in AOCI | $ 303,000 | $ 604,000 | |
Net unrealized gains on securities | 4,705,000 | 1,560,000 | |
Net unrecognized losses on cash flow hedges | (1,654,000) | (69,000) | |
Net unrecognized losses on defined benefit plan | (3,689,000) | (3,740,000) | |
Total accumulated other comprehensive loss, net | $ (638,000) | $ (2,249,000) | [1] |
[1] | Derived from audited consolidated financial statements. |
Equity, Other Comprehensive I_5
Equity, Other Comprehensive Income and Earnings Per Share - Earnings Per Share (EPS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Components of earnings per share calculations | ||||
Net income attributable to C&F Financial Corporation | $ 3,746 | $ 5,843 | $ 7,324 | $ 9,614 |
Weighted average shares outstanding-basic and diluted | 3,647,707 | 3,463,277 | 3,646,161 | 3,473,875 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Components of net periodic benefit cost | ||||
Service cost, included in salaries and employee benefits | $ 415 | $ 316 | $ 801 | $ 609 |
Other components of net periodic benefit cost: | ||||
Interest cost | 140 | 151 | 275 | 304 |
Expected return on plan assets | (371) | (319) | (745) | (649) |
Amortization of prior service credit | (17) | (17) | (34) | (34) |
Recognized net actuarial losses | 57 | 52 | 99 | 94 |
Other components of net periodic benefit cost, included in other noninterest income | (191) | (133) | (405) | (285) |
Net periodic benefit cost | $ 224 | $ 183 | $ 396 | $ 324 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Investments in small business investment companies (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | |
Fair Value of Assets and Liabilities | ||
Fair value of investment in small business investment companies | $ 1,430 | $ 1,430 |
Unrealized losses | $ 124 | $ 124 |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Securities available for sale | |||
Securities available for sale | $ 247,133 | $ 189,733 | [1] |
Interest rate swaps on loans | Cash flow hedges | |||
Liabilities: | |||
Derivatives | 2,273 | 145 | |
Recurring | |||
Securities available for sale | |||
Securities available for sale | 247,133 | 189,733 | |
Loans held for sale | 180,137 | 90,500 | |
Total assets measured at fair value | 440,714 | 283,778 | |
Liabilities: | |||
Derivatives | 12,109 | 2,632 | |
Recurring | Cash flow hedges | |||
Liabilities: | |||
Derivatives | 2,273 | 145 | |
Recurring | IRLC | |||
Securities available for sale | |||
Derivatives | 3,701 | 1,083 | |
Recurring | Interest rate swaps on loans | |||
Securities available for sale | |||
Derivatives | 9,743 | 2,462 | |
Liabilities: | |||
Derivatives | 9,743 | 2,462 | |
Recurring | Forward sales of TBA securities | |||
Liabilities: | |||
Derivatives | 93 | 25 | |
Level 2 | Recurring | |||
Securities available for sale | |||
Securities available for sale | 247,133 | 189,733 | |
Loans held for sale | 180,137 | 90,500 | |
Total assets measured at fair value | 440,714 | 283,778 | |
Liabilities: | |||
Derivatives | 12,109 | 2,632 | |
Level 2 | Recurring | Cash flow hedges | |||
Liabilities: | |||
Derivatives | 2,273 | 145 | |
Level 2 | Recurring | IRLC | |||
Securities available for sale | |||
Derivatives | 3,701 | 1,083 | |
Level 2 | Recurring | Interest rate swaps on loans | |||
Securities available for sale | |||
Derivatives | 9,743 | 2,462 | |
Liabilities: | |||
Derivatives | 9,743 | 2,462 | |
Level 2 | Recurring | Forward sales of TBA securities | |||
Liabilities: | |||
Derivatives | 93 | 25 | |
U.S. government agencies and corporations | |||
Securities available for sale | |||
Securities available for sale | 37,205 | 21,440 | |
U.S. government agencies and corporations | Recurring | |||
Securities available for sale | |||
Securities available for sale | 37,205 | 21,440 | |
U.S. government agencies and corporations | Level 2 | Recurring | |||
Securities available for sale | |||
Securities available for sale | 37,205 | 21,440 | |
Mortgage-backed securities | |||
Securities available for sale | |||
Securities available for sale | 106,249 | 86,585 | |
Mortgage-backed securities | Recurring | |||
Securities available for sale | |||
Securities available for sale | 106,249 | 86,585 | |
Mortgage-backed securities | Level 2 | Recurring | |||
Securities available for sale | |||
Securities available for sale | 106,249 | 86,585 | |
Obligations of states and political subdivisions | |||
Securities available for sale | |||
Securities available for sale | 103,679 | 81,708 | |
Obligations of states and political subdivisions | Recurring | |||
Securities available for sale | |||
Securities available for sale | 103,679 | 81,708 | |
Obligations of states and political subdivisions | Level 2 | Recurring | |||
Securities available for sale | |||
Securities available for sale | $ 103,679 | $ 81,708 | |
[1] | Derived from audited consolidated financial statements. |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities - Financial Assets Measured at Fair Value on Non-Recurring Basis (Details) $ in Thousands | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair value assets and liabilities - Nonrecurring Basis | ||
Impaired loans measured for impairment using the fair value of the collateral | $ 0 | |
Nonrecurring | ||
Fair value assets and liabilities - Nonrecurring Basis | ||
Financial assets measured at fair value on a non-recurring basis | 268 | $ 370 |
Nonrecurring | Impaired loans, net | ||
Fair value assets and liabilities - Nonrecurring Basis | ||
Financial assets measured at fair value on a non-recurring basis | 102 | |
Nonrecurring | Other real estate owned, net | ||
Fair value assets and liabilities - Nonrecurring Basis | ||
Financial assets measured at fair value on a non-recurring basis | 268 | 268 |
Level 3 | Nonrecurring | ||
Fair value assets and liabilities - Nonrecurring Basis | ||
Financial assets measured at fair value on a non-recurring basis | $ 268 | 370 |
Other real estate owned, net, valuation technique | cffi:ValuationTechniqueAppraisalsMember | |
Other real estate owned, net, measurement input | us-gaap:MeasurementInputDiscountRateMember | |
Level 3 | Nonrecurring | Minimum | ||
Fair value assets and liabilities - Nonrecurring Basis | ||
Other real estate owned, input | 0.33 | |
Level 3 | Nonrecurring | Impaired loans, net | ||
Fair value assets and liabilities - Nonrecurring Basis | ||
Financial assets measured at fair value on a non-recurring basis | 102 | |
Level 3 | Nonrecurring | Other real estate owned, net | ||
Fair value assets and liabilities - Nonrecurring Basis | ||
Financial assets measured at fair value on a non-recurring basis | $ 268 | $ 268 |
Fair Value of Assets and Liab_6
Fair Value of Assets and Liabilities - Carrying Value and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Assets: | |||
Securities available for sale | $ 247,133 | $ 189,733 | [1] |
Bank-owned life insurance | 19,862 | 16,044 | [1] |
Carrying Value | |||
Assets: | |||
Cash and short-term investments | 80,300 | 165,433 | |
Securities available for sale | 247,133 | 189,733 | |
Loans, net | 1,292,896 | 1,082,318 | |
Loans held for sale | 180,137 | 90,500 | |
Bank-owned life insurance | 19,862 | 16,044 | |
Accrued interest receivable | 8,104 | 6,776 | |
Financial liabilities: | |||
Demand deposits | 1,153,248 | 869,194 | |
Time deposits | 492,541 | 422,056 | |
Borrowings | 91,336 | 161,170 | |
Accrued interest payable | 1,210 | 1,291 | |
Total Fair Value | |||
Assets: | |||
Cash and short-term investments | 80,300 | 165,433 | |
Securities available for sale | 247,133 | 189,733 | |
Loans, net | 1,299,598 | 1,082,783 | |
Loans held for sale | 180,137 | 90,500 | |
Bank-owned life insurance | 19,862 | 16,044 | |
Accrued interest receivable | 8,104 | 6,776 | |
Financial liabilities: | |||
Demand deposits | 1,153,248 | 869,194 | |
Time deposits | 501,932 | 423,605 | |
Borrowings | 92,667 | 154,964 | |
Accrued interest payable | 1,210 | 1,291 | |
Total Fair Value | Level 1 | |||
Assets: | |||
Cash and short-term investments | 80,300 | 165,433 | |
Accrued interest receivable | 8,104 | 6,776 | |
Financial liabilities: | |||
Demand deposits | 1,153,248 | 869,194 | |
Accrued interest payable | 1,210 | 1,291 | |
Total Fair Value | Level 2 | |||
Assets: | |||
Securities available for sale | 247,133 | 189,733 | |
Loans held for sale | 180,137 | 90,500 | |
Bank-owned life insurance | 19,862 | 16,044 | |
Financial liabilities: | |||
Time deposits | 501,932 | 423,605 | |
Borrowings | 92,667 | 154,964 | |
Total Fair Value | Level 3 | |||
Assets: | |||
Loans, net | 1,299,598 | 1,082,783 | |
IRLC | Carrying Value | |||
Assets: | |||
Derivatives | 3,701 | 1,083 | |
IRLC | Total Fair Value | |||
Assets: | |||
Derivatives | 3,701 | 1,083 | |
IRLC | Total Fair Value | Level 2 | |||
Assets: | |||
Derivatives | 3,701 | 1,083 | |
Interest rate swaps on loans | Carrying Value | |||
Assets: | |||
Derivatives | 9,743 | 2,462 | |
Financial liabilities: | |||
Derivatives | 9,743 | 2,462 | |
Interest rate swaps on loans | Total Fair Value | |||
Assets: | |||
Derivatives | 9,743 | 2,462 | |
Financial liabilities: | |||
Derivatives | 9,743 | 2,462 | |
Interest rate swaps on loans | Total Fair Value | Level 2 | |||
Assets: | |||
Derivatives | 9,743 | 2,462 | |
Financial liabilities: | |||
Derivatives | 9,743 | 2,462 | |
Forward sales of TBA securities | Carrying Value | |||
Financial liabilities: | |||
Derivatives | 93 | 25 | |
Forward sales of TBA securities | Total Fair Value | |||
Financial liabilities: | |||
Derivatives | 93 | 25 | |
Forward sales of TBA securities | Total Fair Value | Level 2 | |||
Financial liabilities: | |||
Derivatives | 93 | 25 | |
Cash flow hedges | Carrying Value | |||
Financial liabilities: | |||
Derivatives | 2,273 | 145 | |
Cash flow hedges | Total Fair Value | |||
Financial liabilities: | |||
Derivatives | 2,273 | 145 | |
Cash flow hedges | Total Fair Value | Level 2 | |||
Financial liabilities: | |||
Derivatives | 2,273 | 145 | |
Cash flow hedges | Interest rate swaps on loans | |||
Financial liabilities: | |||
Derivatives | $ 2,273 | $ 145 | |
[1] | Derived from audited consolidated financial statements. |
Business Segments - Segment Rep
Business Segments - Segment Reporting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | [1] | |
Business Segments | ||||||
Number of principal business segments | segment | 3 | |||||
Revenues: | ||||||
Interest income | $ 23,584 | $ 24,276 | $ 48,362 | $ 47,227 | ||
Gains on sales of loans | 4,605 | 2,955 | 8,281 | 5,091 | ||
Other noninterest income | 7,223 | 5,247 | 10,295 | 10,214 | ||
Total operating income | 35,412 | 32,478 | 66,938 | 62,532 | ||
Expenses: | ||||||
Provision for loan losses | 3,600 | 1,810 | 6,250 | 4,205 | ||
Interest expense | 3,330 | 3,651 | 7,505 | 6,955 | ||
Salaries and employee benefits | 14,354 | 11,495 | 25,171 | 23,402 | ||
Depreciation and amortization | 990 | 832 | 1,957 | 1,826 | ||
Other noninterest expenses | 8,448 | 7,222 | 16,749 | 13,998 | ||
Total operating expenses | 30,722 | 25,010 | 57,632 | 50,386 | ||
Income (loss) before income taxes | 4,690 | 7,468 | 9,306 | 12,146 | ||
Income tax expense (benefit) | 947 | 1,626 | 1,924 | 2,533 | ||
Net income (loss) | 3,743 | 5,842 | 7,382 | 9,613 | ||
Total assets | 1,983,204 | 1,567,996 | 1,983,204 | 1,567,996 | $ 1,657,432 | |
Capital expenditures | 1,905 | 717 | 3,453 | 1,471 | ||
Operating Segments | Community Banking | ||||||
Revenues: | ||||||
Interest income | 14,894 | 15,419 | 30,809 | 29,743 | ||
Other noninterest income | 2,221 | 2,893 | 4,853 | 5,331 | ||
Total operating income | 17,115 | 18,312 | 35,662 | 35,074 | ||
Expenses: | ||||||
Provision for loan losses | 1,400 | 110 | 2,400 | 110 | ||
Interest expense | 2,718 | 2,493 | 5,862 | 4,668 | ||
Salaries and employee benefits | 7,640 | 6,873 | 15,700 | 13,851 | ||
Depreciation and amortization | 829 | 758 | 1,635 | 1,593 | ||
Other noninterest expenses | 5,020 | 4,382 | 10,020 | 8,450 | ||
Total operating expenses | 17,607 | 14,616 | 35,617 | 28,672 | ||
Income (loss) before income taxes | (492) | 3,696 | 45 | 6,402 | ||
Income tax expense (benefit) | (560) | 625 | (593) | 1,041 | ||
Net income (loss) | 68 | 3,071 | 638 | 5,361 | ||
Total assets | 1,860,367 | 1,386,332 | 1,860,367 | 1,386,332 | ||
Capital expenditures | 1,568 | 566 | 2,320 | 1,288 | ||
Operating Segments | Mortgage Banking | ||||||
Revenues: | ||||||
Interest income | 1,097 | 669 | 1,758 | 1,019 | ||
Gains on sales of loans | 4,605 | 2,955 | 8,281 | 5,091 | ||
Other noninterest income | 2,387 | 1,335 | 3,998 | 2,173 | ||
Total operating income | 8,089 | 4,959 | 14,037 | 8,283 | ||
Expenses: | ||||||
Interest expense | 280 | 409 | 585 | 572 | ||
Salaries and employee benefits | 2,272 | 1,611 | 4,117 | 2,758 | ||
Depreciation and amortization | 73 | 59 | 145 | 121 | ||
Other noninterest expenses | 2,166 | 1,276 | 3,817 | 2,458 | ||
Total operating expenses | 4,791 | 3,355 | 8,664 | 5,909 | ||
Income (loss) before income taxes | 3,298 | 1,604 | 5,373 | 2,374 | ||
Income tax expense (benefit) | 977 | 422 | 1,509 | 625 | ||
Net income (loss) | 2,321 | 1,182 | 3,864 | 1,749 | ||
Total assets | 192,987 | 101,554 | 192,987 | 101,554 | ||
Capital expenditures | 32 | 52 | 326 | 76 | ||
Operating Segments | Consumer Finance | ||||||
Revenues: | ||||||
Interest income | 9,689 | 10,365 | 19,790 | 20,510 | ||
Other noninterest income | 80 | 110 | 197 | 239 | ||
Total operating income | 9,769 | 10,475 | 19,987 | 20,749 | ||
Expenses: | ||||||
Provision for loan losses | 2,200 | 1,700 | 3,850 | 4,095 | ||
Interest expense | 2,090 | 2,618 | 4,376 | 5,169 | ||
Salaries and employee benefits | 2,134 | 2,069 | 4,377 | 4,254 | ||
Depreciation and amortization | 45 | 50 | 91 | 102 | ||
Other noninterest expenses | 1,057 | 1,361 | 2,398 | 2,684 | ||
Total operating expenses | 7,526 | 7,798 | 15,092 | 16,304 | ||
Income (loss) before income taxes | 2,243 | 2,677 | 4,895 | 4,445 | ||
Income tax expense (benefit) | 605 | 728 | 1,327 | 1,211 | ||
Net income (loss) | 1,638 | 1,949 | 3,568 | 3,234 | ||
Total assets | 301,372 | 309,705 | 301,372 | 309,705 | ||
Capital expenditures | 305 | 32 | 807 | 40 | ||
Operating Segments | Other | ||||||
Revenues: | ||||||
Interest income | 2 | 4 | ||||
Other noninterest income | 2,535 | 909 | 1,247 | 2,471 | ||
Total operating income | 2,535 | 911 | 1,247 | 2,475 | ||
Expenses: | ||||||
Interest expense | 338 | 310 | 677 | 595 | ||
Salaries and employee benefits | 2,308 | 942 | 977 | 2,539 | ||
Depreciation and amortization | 43 | (35) | 86 | 10 | ||
Other noninterest expenses | 205 | 203 | 514 | 406 | ||
Total operating expenses | 2,894 | 1,420 | 2,254 | 3,550 | ||
Income (loss) before income taxes | (359) | (509) | (1,007) | (1,075) | ||
Income tax expense (benefit) | (75) | (149) | (319) | (344) | ||
Net income (loss) | (284) | (360) | (688) | (731) | ||
Total assets | 21,834 | 19,696 | 21,834 | 19,696 | ||
Capital expenditures | 67 | 67 | ||||
Eliminations | ||||||
Revenues: | ||||||
Interest income | (2,096) | (2,179) | (3,995) | (4,049) | ||
Total operating income | (2,096) | (2,179) | (3,995) | (4,049) | ||
Expenses: | ||||||
Interest expense | (2,096) | (2,179) | (3,995) | (4,049) | ||
Total operating expenses | (2,096) | (2,179) | (3,995) | (4,049) | ||
Total assets | $ (393,356) | $ (249,291) | $ (393,356) | $ (249,291) | ||
[1] | Derived from audited consolidated financial statements. |
Business Segments - Merger Rela
Business Segments - Merger Related Expenses and Segment Debt (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)item | Jun. 30, 2019USD ($) | |
Business Segments | ||||
Merger related costs | $ 308,000 | $ 0 | $ 898,000 | $ 0 |
Mortgage Banking | ||||
Business Segments | ||||
Number of intersegment lines of credit | item | 2 | |||
Mortgage Banking | FHLB Advances | Minimum | ||||
Business Segments | ||||
Variable rate, spread (as a percent) | 0.50% | |||
Mortgage Banking | FHLB Advances | Maximum | ||||
Business Segments | ||||
Variable rate, spread (as a percent) | 1.75% | |||
Consumer Finance | ||||
Business Segments | ||||
Floor variable rate (as a percent) | 3.50% | |||
Consumer Finance | Minimum | ||||
Business Segments | ||||
Fixed rate (as a percent) | 2.00% | 2.00% | ||
Consumer Finance | Maximum | ||||
Business Segments | ||||
Fixed rate (as a percent) | 8.00% | 8.00% | ||
Consumer Finance | London Interbank Offered Rate (LIBOR) | Minimum | ||||
Business Segments | ||||
Variable rate, spread (as a percent) | 2.00% | |||
Peoples Bankshares, Incorporated (Peoples) | ||||
Business Segments | ||||
Merger related costs | $ 439,000 | $ 0 | $ 1,400,000 | $ 0 |
Merger related costs, after income taxes | 347,000 | 1,130,000 | ||
Aggregated merger related costs | 2,100,000 | 2,100,000 | ||
Peoples Bankshares, Incorporated (Peoples) | Community Banking | ||||
Business Segments | ||||
Merger related costs | 1,300,000 | |||
Merger related costs, after income taxes | 1,030,000 | |||
Peoples Bankshares, Incorporated (Peoples) | Community Banking | Salaries and benefits expense | ||||
Business Segments | ||||
Merger related costs | 50,000 | 119,000 | ||
Peoples Bankshares, Incorporated (Peoples) | Community Banking | Other noninterest expense | ||||
Business Segments | ||||
Merger related costs | $ 389,000 | 879,000 | ||
Peoples Bankshares, Incorporated (Peoples) | Community Banking | Other noninterest income | ||||
Business Segments | ||||
Merger related costs | $ 298,000 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities - Loan Commitments and Standby letters of credit (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Standby Letters of Credit | ||
Commitments and Contingent Liabilities | ||
Face amount of asset | $ 17,180 | $ 16,600 |
Loan commitments | ||
Commitments and Contingent Liabilities | ||
Face amount of asset | $ 303,920 | $ 256,150 |
Commitments and Contingent Li_3
Commitments and Contingent Liabilities - Other (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Commitments and Contingent Liabilities | |||||
Provision for indemnifications | $ 156,000 | $ 0 | $ 163,000 | $ 0 | |
Mortgage Banking Segment | |||||
Commitments and Contingent Liabilities | |||||
Recourse period for early payment default, minimum | 90 days | ||||
Recourse period for early payment default, maximum | 1 year | ||||
Indemnification reserve for recourse provisions | |||||
Commitments and Contingent Liabilities | |||||
Allowance for indemnifications | $ 2,640,000 | $ 2,640,000 | $ 2,480,000 |
Derivatives Financial Instrumen
Derivatives Financial Instruments (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Derivatives and other information | ||
Changes in fair value of loan swaps | $ 0 | |
Unpaid principal on mortgage loans held for sale | 4,540 | $ 5,511 |
Other assets | ||
Derivatives and other information | ||
Cash collateral | 11,790 | 2,520 |
Forward sales of TBA securities | Not designated as hedges | ||
Derivatives and other information | ||
Notional amount | 20,750 | 24,000 |
Derivative Liability | 93 | 25 |
Interest rate swaps on loans | Cash flow hedges | ||
Derivatives and other information | ||
Notional amount | 25,000 | 25,000 |
Derivative Liability | 2,273 | 145 |
Matched interest rate swap with borrower | Not designated as hedges | ||
Derivatives and other information | ||
Notional amount | 85,282 | 74,266 |
Derivative Asset | 9,743 | 2,454 |
Derivative Liability | 8 | |
Matched interest rate swap with counterparty | Not designated as hedges | ||
Derivatives and other information | ||
Notional amount | 85,282 | 74,266 |
Derivative Asset | 8 | |
Derivative Liability | 9,743 | 2,454 |
IRLC | Not designated as hedges | ||
Derivatives and other information | ||
Notional amount | 247,871 | 75,073 |
Derivative Asset | 3,701 | 1,083 |
Mortgage Banking Segment | ||
Derivatives and other information | ||
IRLCs | 14,900 | 11,720 |
Unpaid principal on mortgage loans held for sale | 8,840 | 21,980 |
Mortgage Banking Segment | Best-efforts forward sales contracts | ||
Derivatives and other information | ||
IRLCs | 232,970 | 63,350 |
Unpaid principal on mortgage loans held for sale | 166,010 | 65,770 |
Mortgage loans | 129,120 | |
Mortgage Banking Segment | Forward sales of TBA securities | ||
Derivatives and other information | ||
Mortgage loans | 20,750 | 24,000 |
Mortgage Banking Segment | Mandatory-delivery forward sales contracts | ||
Derivatives and other information | ||
Mortgage loans | 1,600 | $ 6,730 |
C&F Mortgage | Best-efforts forward sales contracts | ||
Derivatives and other information | ||
Mortgage loans | $ 398,980 |
Other Noninterest Expenses (Det
Other Noninterest Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other Noninterest Expenses | ||||
Data processing fees | $ 2,448,000 | $ 1,974,000 | $ 4,842,000 | $ 3,896,000 |
Professional fees | 738,000 | 789,000 | 1,718,000 | 1,353,000 |
Mortgage banking loan processing expenses | 780,000 | 388,000 | 1,264,000 | 683,000 |
Telecommunication expenses | 409,000 | 330,000 | 781,000 | 648,000 |
Marketing and advertising expenses | 348,000 | 435,000 | 838,000 | 808,000 |
Travel and educational expenses | 100,000 | 304,000 | 544,000 | 706,000 |
All other noninterest expenses | 2,048,000 | 1,686,000 | 3,825,000 | 3,392,000 |
Total Other Noninterest Expenses | 6,871,000 | 5,906,000 | 13,812,000 | 11,486,000 |
Merger related expenses | 308,000 | $ 0 | 898,000 | $ 0 |
Merger related data processing fees | 263,000 | 501,000 | ||
Merger related professional fees | 22,000 | 336,000 | ||
Merger related other noninterest expenses | $ 23,000 | $ 61,000 |