C&F Financial (CFFI) - 2024 Q3 - Quarterly Report

Financial Performance - Consolidated net income for the third quarter of 2024 was $5.420 million, a decrease of $357,000 compared to the same period in 2023[142]. - The annualized return on average equity was 9.74% for the third quarter of 2024, down from 11.28% in the same quarter of 2023[141]. - The Corporation's net tangible income attributable for the three months ended September 30, 2024, is $5,455,000, compared to $5,857,000 for the same period in 2023[268]. - Annualized return on average tangible common equity is 11.16% for the three months ended September 30, 2024, down from 13.19% in 2023[268]. - Net interest income for the three months ended September 30, 2024, is $24,689,000, slightly up from $24,462,000 in 2023[271]. - Total interest income for the three months ended September 30, 2024, is $36,131,000, an increase from $31,686,000 in 2023[271]. Loan and Deposit Growth - Community banking segment loans grew by $158.5 million, or 16.6% annualized, compared to December 31, 2023[144]. - Consumer finance segment loans increased by $8.8 million, or 2.5% annualized, compared to December 31, 2023[144]. - Total loans reached $1,932,693,000, an increase of 11.84% compared to $1,727,812,000 in the previous period[154]. - Total deposits increased by $69.8 million to $2.14 billion as of September 30, 2024, with time deposits rising by $137.6 million[249]. - The consumer finance segment's total loans increased to $477,300,000 at September 30, 2024, from $468,510,000 at December 31, 2023[225]. Credit Losses and Provisions - The community banking segment recorded a provision for credit losses of $700,000 for the third quarter of 2024, compared to $500,000 for the same period in 2023[144]. - The provision for credit losses was $700,000 for Q3 2024, up from $500,000 in Q3 2023, reflecting growth in the loan portfolio[179]. - The provision for credit losses in the consumer finance segment increased to $3.00 million in Q3 2024 from $1.55 million in Q3 2023, reflecting increased net charge-offs and loan growth[192]. - Total loans charged off for the nine months ended September 30, 2024, amounted to $12,000,000, compared to $9,562,000 for the same period in 2023, indicating an increase in loan defaults[212]. - The allowance for credit losses was $40,879,000, slightly down from $41,014,000, indicating a decrease of 0.33%[154]. Noninterest Income and Expenses - Total noninterest income increased by $2.6 million, or 41.2%, for the third quarter of 2024 compared to the same period in 2023[168]. - Noninterest expenses increased by $1.6 million, or 7.3%, in Q3 2024 compared to Q3 2023, primarily due to higher occupancy and data processing expenses[172]. - Gains on sales of loans increased to $1,825,000 in Q3 2024 from $1,220,000 in Q3 2023, while total noninterest income rose to $8,772,000 from $6,214,000 year-over-year[170]. Capital and Equity - Total equity increased to $228.0 million at September 30, 2024, compared to $217.5 million at December 31, 2023[145]. - The Corporation declared a quarterly cash dividend of $0.44 per share during the third quarter of 2024, representing a payout ratio of 26.7%[147]. - The Corporation's total risk-based capital ratio was 13.8% as of September 30, 2024, exceeding the minimum requirement of 8.0%[261]. - Common Equity Tier 1 capital ratio is 11.3%, surpassing the minimum requirement of 4.5%[263]. Interest Rate Management - The Corporation employs interest rate swaps to manage exposure to interest rate risk, converting variable rates to fixed rates for certain capital notes[290]. - The Corporation's liquidity management focuses on maintaining stable core deposits and a strong capital position to meet liquidity requirements[279]. - The Corporation's current interest rate exposure is deemed manageable, with no significant exposure to interest rate changes[292]. - The Corporation's simulation analysis indicates a greater sensitivity to upward shifts in interest rates compared to downward shifts as of September 30, 2024[284]. Asset and Securities Management - Total assets increased to $2,526,720,000, up from $2,400,593,000, reflecting a growth of approximately 5.25%[154]. - Securities available for sale decreased by $53.4 million to $409.0 million at September 30, 2024, primarily due to declines in U.S. Treasury and government agency securities[243]. - The net unrealized losses in the market value of securities available for sale decreased to $21.7 million at September 30, 2024, compared to $31.6 million at December 31, 2023[243].