C & F FINANCIAL CORP - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number 000-23423

C&F Financial Corporation

(Exact name of registrant as specified in its charter)

Virginia		54-1680165

(State or other jurisdiction of incorporation of organization)		(I.R.S. Employer Identification No.)

Eighth and Main Streets West Point, VA		23181

(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number) (804) 843-2360


(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 3,641,793, $1.00 par value, as of November 13, 2002.

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Part I - Financial Information

Item 1.	Financial Statements

	Consolidated Balance Sheets - September 30, 2002 and December 31, 2001	1

	Consolidated Statements of Income - Three months and nine months ended September 30, 2002 and 2001	2

	Consolidated Statements of Shareholders’ Equity Nine months ended September 30, 2002 and 2001	3

	Consolidated Statements of Cash Flows - Nine months ended September 30, 2002 and 2001	5

	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	10

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	24

Part II - Other Information

Item 1.	Legal Proceedings	25

Item 2.	Changes in Securities and Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Submission of Matters to a Vote of Security Holders	25

Item 5.	Other Information	25

Item 6.	Exhibits and Reports on Form 8-K	25

Signatures		26

Certifications		26

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except for per share amounts)

			September 30, 2002		December 31, 2001

			(Unaudited)
ASSETS
Cash and due from banks			$	10,614	$	10,127
Interest -bearing deposits in other banks				5,833		930

		Total cash and cash equivalents		16,447		11,057
Securities -available for sale at fair value, amortized cost of $59,624 and $53,123, respectively				62,743		53,953
Loans held for sale, net				75,794		69,263
Loans, net				322,974		246,112
Federal Home Loan Bank stock				1,690		1,595
Corporate premises and equipment, net of accumulated depreciation				14,218		14,639
Accrued interest receivable				2,045		2,134
Other assets				15,563		5,323

		Total assets	$	511,474	$	404,076

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
	Non-interest-bearing demand deposits		$	53,824	$	38,489
	Savings and interest-bearing demand deposits			151,054		131,509
	Time deposits			166,796		153,914

		Total deposits		371,674		323,912
Borrowings				68,584		27,204
Accrued interest payable				726		811
Other liabilities				16,585		7,406

		Total liabilities		457,569		359,333

Commitments and contingent liabilities
Shareholders’ equity
	Preferred stock ($1.00 par value, 3,000,000 shares authorized)			—		—
	Common stock ($1.00 par value, 8,000,000 shares authorized, 3,641,793 and 3,526,126 shares issued and outstanding, respectively)			3,642		3,526
	Additional paid-in capital			2,418		47
	Retained earnings			45,786		40,622
	Accumulated other comprehensive income net of tax of $1,060 and $282, respectively			2,059		548

		Total shareholders’ equity		53,905		44,743

		Total liabilities and shareholders’ equity	$	511,474	$	404,076

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands of dollars, except for per share amounts)

			Three Months Ended September 30,				Nine Months Ended September 30,

			2002		2001		2002		2001

Interest income
	Interest and fees on loans		$	6,755	$	6,294	$	17,976	$	18,556
	Interest on other market investments and fed funds			113		33		329		63
	Interest on investment securities
		U.S. treasury securities		—		—		—		30
		U.S. government agencies and corporations		—		73		—		438
		Tax-exempt obligations of states and political subdivisions		610		584		1,795		1,803
		Corporate bonds and other		164		111		499		343

		Total interest income		7,642		7,095		20,599		21,233
Interest expense
	Savings and interest-bearing deposits			488		697		1,614		2,211
	Certificates of deposit, $100,000 or more			302		442		969		1,343
	Other time deposits			1,120		1,698		3,526		5,145
	Borrowings and other			334		144		522		629

		Total interest expense		2,244		2,981		6,631		9,328
Net interest income				5,398		4,114		13,968		11,905
Provision for loan losses				291		100		491		300

Net interest income after provision for loan losses				5,107		4,014		13,477		11,605
Other operating income
	Gain on sale of loans			3,729		2,951		9,368		7,070
	Service charges on deposit accounts			523		337		1,407		1,079
	Other service charges and fees			1,055		817		2,606		2,277
	Gain on maturities and calls of available for sale securities			34		6		69		6
	Other income			371		325		1,324		844

		Total other operating income		5,712		4,436		14,774		11,276
Other operating expenses
	Salaries and employee benefits			4,679		3,499		12,335		9,635
	Occupancy expenses			726		682		2,297		1,963
	Goodwill amortization			47		69		141		206
	Other expenses			1,435		1,210		3,902		3,478

		Total other operating expenses		6,887		5,460		18,675		15,282
Income before income taxes				3,932		2,990		9,576		7,599
Income tax expense				1,242		900		2,769		2,146

Net income			$	2,690	$	2,090	$	6,807	$	5,453

Per Share Data

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