C&F Financial (CFFI) - 2024 Q4 - Annual Report

Financial Performance - Consolidated net income for 2024 was $19.9 million, down from $23.7 million in 2023, with earnings per share decreasing from $6.92 to $6.01[222] - Adjusted net income for 2024 was $20.0 million, compared to $23.7 million in 2023[222] - Community banking segment net income for the year ended December 31, 2024, was $20.3 million, a decrease from $22.9 million in 2023[280] - The consumer finance segment reported net income of $1.4 million for the year ended December 31, 2024, down from $2.9 million in 2023, primarily due to higher provision for credit losses[300] - Mortgage banking segment net income increased to $1.1 million for the year ended December 31, 2024, from $465,000 in 2023[288] Loan Growth - Total loans increased to $1,885,643 thousand in 2024, up from $1,713,626 thousand in 2023, reflecting a growth of approximately 10%[249] - Community banking segment loans grew by $180.0 million, or 14.1%, to $1.5 billion at December 31, 2024, compared to $1.3 billion at December 31, 2023[282] - Average loans increased by $172.0 million to $1.89 billion in 2024, with community banking segment loans rising by $164.0 million, or 13.5%[257] - The average loans for the commercial segment were $1,010,121 thousand in 2024, an increase from $879,608 thousand in 2023, representing a growth of 14.8%[320] - Total loans held for investment reached $1.88 billion, with loans held for sale valued at $20.1 million as of December 31, 2024[360] Credit Loss Provisions - The consumer finance segment provision for credit losses increased to $11.6 million from $6.7 million[228] - The provision for credit losses on loans was $13,100 thousand for the year ended December 31, 2024, compared to $8,126 thousand in 2023, indicating a significant increase of 61.5%[334] - The provision for credit losses in the community banking segment was $1.7 million for 2024, compared to $1.6 million in 2023, reflecting growth in the loan portfolio[283] - Management believes the allowance for credit losses is adequate, but further deterioration in loan performance may lead to increased provisions in the future[302] - The total allowance for credit losses increased to $40,087 thousand as of December 31, 2024, up from $39,651 thousand in 2023, reflecting a provision charged to operations of $13,100 thousand[320] Interest Income and Margin - The net interest income for the year ended December 31, 2024, was $97,922 thousand, compared to $98,671 thousand in 2023, indicating a slight decrease[249] - The consolidated net interest margin decreased to 4.12% from 4.31%[228] - The yield on total loans for 2024 was 6.75%, an increase from 6.49% in 2023[249] - The average yield on interest-bearing deposits increased by 99 basis points to 2.42% for 2024, compared to 1.43% in 2023[262] - Net interest income after provision for credit losses for the consumer finance segment was $14.4 million in 2024, down from $17.8 million in 2023[298] Asset and Equity Growth - Total equity increased to $227.0 million at December 31, 2024, compared to $217.5 million at December 31, 2023[226] - The corporation's total assets reached $2,494,496 thousand in 2024, an increase from $2,393,497 thousand in 2023, indicating overall growth[249] - Total assets increased to $2.56 billion as of December 31, 2024, compared to $2.44 billion in 2023, primarily due to growth in loans held for investment[359] - The average balance of total earning assets increased to $2,378,506 thousand in 2024 from $2,285,878 thousand in 2023, marking a growth of approximately 4%[249] - The average balance of interest-bearing deposits rose to $1,572,128 thousand in 2024, compared to $1,422,529 thousand in 2023, representing an increase of about 10.5%[249] Noninterest Income and Expenses - Total noninterest income increased by $923,000, or 3.1%, for 2024, driven by higher wealth management services income and mortgage loan production[267] - Total noninterest expense rose by $47,000, or less than 1%, for 2024, attributed to higher professional fees and data processing expenses[273] - Noninterest income for the consumer finance segment was $1.0 million in 2024, slightly up from $962,000 in 2023[298] - Noninterest expenses for the community banking segment totaled $62.9 million for 2024, compared to $60.8 million in 2023[279] - Total noninterest expenses decreased to $13.5 million in 2024 from $14.8 million in 2023, reflecting efforts to reduce overhead costs[298] Regulatory and Economic Environment - Economic and regulatory uncertainties are expected to continue in 2025, impacting interest rate movements and overall business performance[235] - The corporation's credit policy emphasizes maintaining acceptable asset quality alongside loan growth, with a focus on risk management and underwriting standards[367] - The maximum loan-to-value ratio for commercial real estate loans is typically 80%, with exceptions for strong borrowers[370] Deposits and Borrowings - Deposits increased by $104.7 million to $2.17 billion at December 31, 2024, compared to $2.07 billion at December 31, 2023[403] - Borrowings increased to $122.6 million at December 31, 2024, up from $109.5 million at December 31, 2023, primarily due to higher long-term borrowings from the FHLB[410] - The average balance of certificates of deposit increased to $767.7 million in 2024, with an average rate of 4.10%[406] - The corporation had $25.0 million in brokered deposits outstanding at both December 31, 2024, and December 31, 2023[405] - The total contract amount of standby letters of credit rose to $18.8 million at December 31, 2024, from $7.9 million at December 31, 2023, reflecting a significant increase of 137.9%[414]