C&F Financial Q3 Profit Jumps 31% on Loan Growth and Margin Gains

Core Viewpoint - C&F Financial Corporation reported strong earnings growth in Q3 2025, with significant increases in net income and earnings per share, indicating robust profitability and a positive outlook for future performance [2][13]. Financial Performance - Consolidated net income for Q3 2025 was $7.1 million, a 31.2% increase from $5.4 million in Q3 2024 [2]. - Earnings per share (EPS) rose 32.1% to $2.18 from $1.65 year-over-year [2]. - For the first nine months of 2025, net income grew 46% year-over-year to $20.3 million, with EPS climbing to $6.22 from $4.15 [2]. - Annualized return on average assets improved to 1.06% from 0.86%, and return on average equity rose to 11.6% from 9.74% [2]. Community Banking Segment Performance - The community banking segment reported net income of $7.4 million, up from $5.3 million a year ago, driven by higher interest income and a net reversal of credit loss provisions [3][4]. - Average loans increased 9% year-over-year to $1.54 billion, while average deposits rose 6.7% to $1.72 billion [3]. - The net interest margin improved to 4.24% from 4.13% in the prior year [4]. Mortgage Banking Segment Momentum - The mortgage banking segment posted net income of $641,000, nearly double the $351,000 reported a year earlier, supported by higher gains on loan sales [5]. - Loan originations totaled $167 million, up 6.4% year-over-year, with year-to-date originations surging 24.4% compared to the same period in 2024 [5]. Consumer Finance Segment Trends - The consumer finance segment saw a decline in net income to $231,000 from $311,000, attributed to higher provisions for credit losses [7]. - Average loan balances fell 3.6% year-over-year, while delinquent loans rose to 4% of total loans from 3.49% a year earlier [7]. Liquidity and Capital Position - Total assets reached $2.71 billion, up from $2.55 billion a year ago, and total deposits grew 7.6% year-over-year to $2.30 billion [9]. - The total risk-based capital ratio improved to 15.3% from 14.1% at the end of 2024, with a Tier 1 leverage ratio of 10.0% [10]. Management Commentary - Management emphasized the strength of the diversified business model, highlighting loan and deposit growth in community banking and increased mortgage activity [11]. - The company is focused on responsible growth, supported by strong liquidity and capital position [11]. Other Developments - C&F Financial expanded into Southwest Virginia with a new loan production office in Roanoke [12]. - Unrealized losses on securities available for sale decreased from $23.7 million at year-end 2024 to $12.9 million [12].