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, 2004
| ¨ | 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 or organization) |
(I.R.S. Employer Identification No.) |
| Eighth and Main Streets West Point, VA |
23181 | |
| (Address of principal executive offices) | (Zip Code) |
(804) 843-2360
(Registrant’s telephone number, including area code)
(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. x Yes ¨ No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). x Yes ¨ No
At November 2, 2004, the latest practicable date for determination, 3,543,354 shares of common stock, $1.00 par value, of the registrant were outstanding.
PART I - FINANCIAL INFORMATION
(In thousands, except for share and per share amounts)
| September 30, 2004 |
December 31, 2003 | |||||
| (Unaudited) | ||||||
| ASSETS |
||||||
| Cash and due from banks |
$ | 14,307 | $ | 15,457 | ||
| Interest bearing deposits in other banks |
37,871 | 34,294 | ||||
| Total cash and cash equivalents |
52,178 | 49,751 | ||||
| Securities-available for sale at fair value, amortized cost of $68,505 and $99,550, respectively |
71,829 | 103,050 | ||||
| Loans held for sale, net |
53,652 | 29,733 | ||||
| Loans, net |
383,361 | 350,170 | ||||
| Federal Home Loan Bank stock |
1,392 | 2,072 | ||||
| Corporate premises and equipment, net of accumulated depreciation |
16,383 | 15,367 | ||||
| Accrued interest receivable |
2,904 | 2,590 | ||||
| Goodwill |
9,071 | 9,071 | ||||
| Other assets |
11,393 | 11,742 | ||||
| Total assets |
$ | 602,163 | $ | 573,546 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||
| Deposits |
||||||
| Non-interest bearing demand deposits |
$ | 77,453 | $ | 64,683 | ||
| Savings and interest bearing demand deposits |
182,371 | 176,732 | ||||
| Time deposits |
184,345 | 186,220 | ||||
| Total deposits |
444,169 | 427,635 | ||||
| Borrowings |
76,956 | 67,733 | ||||
| Accrued interest payable |
572 | 583 | ||||
| Other liabilities |
11,853 | 12,211 | ||||
| Total liabilities |
533,550 | 508,162 | ||||
| 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, 3,548,654 and 3,612,571 shares issued and outstanding, respectively) |
3,549 | 3,612 | ||||
| Additional paid-in capital |
40 | 1,010 | ||||
| Retained earnings |
62,863 | 58,487 | ||||
| Accumulated other comprehensive income, net |
2,161 | 2,275 | ||||
| Total shareholders’ equity |
68,613 | 65,384 | ||||
| Total liabilities and shareholders’ equity |
$ | 602,163 | $ | 573,546 | ||
The accompanying notes are an integral part of the consolidated financial statements.
1
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except for share and per share amounts)
| Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||
| Interest income |
||||||||||||
| Interest and fees on loans |
$ | 9,556 | $ | 9,015 | $ | 27,278 | $ | 26,935 | ||||
| Interest on other investments and fed funds |
136 | 24 | 368 | 103 | ||||||||
| Interest on investment securities |
||||||||||||
| U.S. government agencies and corporations |
98 | 8 | 269 | 23 | ||||||||
| Tax-exempt obligations of states and political subdivisions |
602 | 542 | 1,783 | 1,706 | ||||||||
| Corporate bonds and other |
112 | 126 | 347 | 402 | ||||||||
| Total interest income |
10,504 | 9,715 | 30,045 | 29,169 | ||||||||
| Interest expense |
||||||||||||
| Savings and interest bearing deposits |
295 | 380 | 845 | 1,212 | ||||||||
| Certificates of deposit, $100 or more |
273 | 289 | 806 | 834 | ||||||||
| Other time deposits |
668 | 858 | 2,076 | 2,675 | ||||||||
| Short-term borrowings and other |
656 | 709 | 1,786 | 2,099 | ||||||||
| Total interest expense |
1,892 | 2,236 | 5,513 | 6,820 | ||||||||
| Net interest income |
8,612 | 7,479 | 24,532 | 22,349 | ||||||||
| Provision for loan losses |
996 | 924 | 2,693 | 2,305 | ||||||||
| Net interest income after provision for loan losses |
7,616 | 6,555 | 21,839 | 20,044 | ||||||||
| Other operating income |
||||||||||||
| Gains on sales of loans |
4,518 | 5,687 | 12,125 | 16,152 | ||||||||
| Service charges on deposit accounts |
706 | 549 | 1,973 | 1,718 | ||||||||
| Other service charges and fees |
1,093 | 1,304 | 3,058 | 3,638 | ||||||||
| Gains on calls of available for sale securities |
7 | 29 | 40 | 185 | ||||||||
| Other income |
266 | 419 | 907 | 1,234 | ||||||||
| Total other operating income |
6,590 | 7,988 | 18,103 | 22,927 | ||||||||
| Other operating expenses |
||||||||||||
| Salaries and employee benefits |
6,541 | 6,317 | 18,816 | 18,651 | ||||||||
| Occupancy expenses |
848 | 846 | 2,687 | 2,593 | ||||||||
| Other expenses |
2,246 | 2,314 | 6,366 | 6,479 | ||||||||
| Total other operating expenses |
9,635 | 9,477 | 27,869 | 27,723 | ||||||||
| Income before income taxes |
4,571 | 5,066 | 12,073 | 15,248 | ||||||||
| Income tax expense |
1,469 | 1,702 | 3,735 | 5,075 | ||||||||
| Net income |
$ | 3,102 | $ | 3,364 | $ | 8,338 | $ | 10,173 | ||||
| Per share data |
||||||||||||
| Net income – basic |
$ | .87 | $ | .93 | $ | 2.33 | $ | 2.82 | ||||
| Net income – assuming dilution |
$ | .84 | $ | .89 | $ | 2.23 | $ | 2.69 | ||||
| Cash dividends paid and declared |
$ | .22 | $ | .18 | $ | .66 | $ | .52 | ||||
| Weighted average number of shares – basic |
3,555,883 | 3,603,389 | 3,575,794 | 3,610,467 | ||||||||
| Weighted average number of shares – assuming dilution |
3,708,549 | 3,790,053 | 3,738,040 | 3,776,312 | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
(In thousands)
| Common Stock |
Additional Paid-In Income |
Comprehensive Income |
Retained Earnings |
Accumulated Other Comprehensive Income |
Total |
|||||||||||||||||||
| Balance December 31, 2003 |
$ | 3,612 | $ | 1,010 | $ | 58,487 | $ | 2,275 | $ | 65,384 | ||||||||||||||
| Comprehensive income Net income |
$ | 8,338 | 8,338 | 8,338 | ||||||||||||||||||||
| Other comprehensive loss, net of tax |
||||||||||||||||||||||||
| Net change in unrealized net holding gains on securities, net of reclassification adjustment |
(114 | ) | (114 | ) | (114 | ) | ||||||||||||||||||
| Comprehensive income |
$ | 8,224 | ||||||||||||||||||||||
| Repurchase of common stock |
(72 | ) | (1,103 | ) | (1,608 | ) | (2,783 | ) | ||||||||||||||||
| Stock options exercised |
9 | 133 | 142 | |||||||||||||||||||||
| Cash dividends |
(2,354 | ) | (2,354 | ) | ||||||||||||||||||||
| Balance September 30, 2004 |
$ | 3,549 | $ | 40 | $ | 62,863 | $ | 2,161 | $ | 68,613 | ||||||||||||||
| Disclosure of Reclassification Amount: |
||||||||||||||||||||||||
| Change in unrealized net holding gains on securities during period |
$ | (140 | ) | |||||||||||||||||||||
| Less: reclassification adjustment for gains included in net income |
(26 | ) | ||||||||||||||||||||||
| Net change in unrealized net holding gains on securities |
$ | ( | ||||||||||||||||||||||