C&F Financial Corporation Announces Record Earnings.Business Editors WEST POINT, Va.--(BUSINESS WIRE)--Jan. 29, 2003 C&F Financial Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CFFI CFFI Center on Federal Financial Institutions CFFI Common Foreign Function Interface ), the one-bank holding company for Citizens and Farmers Bank of West Point, VA, reported record net income of $2,958,000, or $.79 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the quarter ended December December: see month. 31, 2002 and $9,765,000, or $2.67 per diluted share, for the year ended December 31, 2002. Included in earnings for the year ended December 31, 2002 was a $277,000, or $.08 per share, after tax insurance benefit. For the quarter ended December 31, 2002, net income increased 68.1% over net income for 2001 and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 61.2% over earnings per share for 2001 (excluding a $776,000, or $.22 per share, after tax gain on the sale of the Tappahannock branch which occurred in the fourth quarter of 2001). For the year ended December 31, 2002, net income increased 31.5% and earnings per diluted share increased 28.9% compared to 2001 (excluding the insurance benefit in 2002 and the after tax gain on the sale of the Tappahannock branch in 2001 as mentioned above). The increase in net income and earnings per share for the three and twelve months ended resulted from an increase in earnings at the all of the Corporation's business segments. Earnings for the Retail Banking segment (excluding the sale of the Tappahannock branch in the fourth quarter of 2001) increased approximately $381,000 to $1,114,000 for the quarter ended December 31, 2002. For the year ended December 31, 2002 (excluding the insurance benefit in 2002 and sale of the Tappahannock branch in 2001) earnings increased $430,000 to $4,630,000. The increase in earnings is a result of an increase in average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin resulting from an increase in loans funded by an increase in deposits resulting from overall branch growth. Earnings for the Mortgage Banking segment increased approximately $275,000 to $1,221,000 for the quarter ended December 31, 2002. For the year ended December 31, 2002, earnings increased $1,052,000 to $3,790,000. The increase in earnings is a result of the lower interest rate environment and strong demand for mortgages that began in 2001 and that continued throughout 2002 and the addition of a new loan production office and new loan officers. On September September: see month. 1, 2002, the Bank purchased Moore Moore, city (1990 pop. 40,761), Cleveland co., central Okla., a suburb of Oklahoma City; inc. 1887. Its manufactures include lightning- and surge-protection equipment, packaging for foods, and auto parts. Loans, Inc. ("Moore Loans"). Moore Loans is a leading regional finance company providing automobile loans in Richmond Richmond, cities, United States Richmond. 1 City (1990 pop. 87,425), Contra Costa co., W Calif., on San Pablo Bay, an inlet of San Francisco Bay; inc. 1905. , Roanoke Roanoke, city, United States Roanoke (rō`ənōk), city (1990 pop. 96,397), independent and in no co., SW Va., on the Roanoke River; settled c.1740, inc. 1882. It is situated between the Blue Ridge and Allegheny Mts. and Hampton Roads Hampton Roads, roadstead, 4 mi (6.4 km) long and 40 ft (12.2 m) deep, SE Va., through which the waters of the James, Nansemond, and Elizabeth rivers pass into Chesapeake Bay. , Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). and portions of eastern Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. . For the quarter and year ended December 31, 2002, Moore Loans earned approximately $537,000 and $751,000, respectively. President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Larry Dillon stated, "We are extremely pleased with results for this past year as well as what was accomplished during the year. The Bank branches that were opened in the fourth quarter of 2001 showed tremendous growth in 2002 and should be profitable in 2003. We added Moore Loans to the C&F family during 2002 and C&F Mortgage continued to experience sales and income growth. While some of the growth at C&F Mortgage is interest rate driven, we continue to add quality loan officers and staff as evidenced by the opening of our newest mortgage office in Fredericksburg, Virginia Fredericksburg is an independent city in the U.S. Commonwealth of Virginia, 50 miles south of Washington, D.C., and 55 miles north of Richmond, Virginia. As of the 2000 census, the city had a population of 19,279. . The addition of Moore Loans and the growth of C&F Mortgage are consistent with our strategy of diversifying revenue. In addition, we continue to explore new opportunities for growth at Retail Banking Segment. We are confident that the accomplishments of 2002 and the plans for 2003 will continue to enhance shareholder value." The company's annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average equity (ROE A fictitious surname used for an unknown or anonymous person or for a hypothetical person in an illustration. A lawsuit is generally named for the persons who are parties to it. ) and annualized return on average assets (ROA ROA See: Return on assets ROA See: Right of accumulation ROA See return on assets (ROA). ) were 21.72% and 2.24%, respectively, for the quarter ended December 31, 2002 compared to 15.75% and 1.75%, respectively, for the quarter ended December 31, 2001 (excluding the gain on the sale of the Tappahannock branch in 2001). ROE and ROA were 19.07% and 2.13%, respectively, for the year ended December 31, 2002 compared to 17.09% and 1.89%, respectively, for the year ended December 31, 2001 (excluding the insurance benefit in 2002 and the gain on the sale of the Tappahannock branch in 2001). C&F Financial Corporation's stock trades on the Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. System under the symbol CFFI. The stock closed at a price of $25.94 per share on Tuesday, January 28, 2003. At December 31, 2002, the book value of the stock was $15.41 per share, and the company paid a cash dividend of $.16 per share during the fourth quarter of 2002. The company's market makers include Advest, Inc., Scott & Stringfellow, Inc., Davenport Davenport, city (1990 pop. 95,333), seat of Scott co., E central Iowa, on the Mississippi River; inc. 1836. Bridges connect it with the Illinois cities of Rock Island and Moline; the three communities and neighboring Bettendorf, Iowa, are known as the Quad Cities. & Company and McKinnon & Company, Inc. C&F Financial Corporation operates twelve retail bank branches located throughout the Williamsburg to Richmond corridor in Virginia through its Citizens and Farmers Bank subsidiary and its division, Citizens and Commerce Bank. The company provides mortgage and title services through C&F Mortgage Corporation's twelve offices and offers full investment services through its subsidiary C&F Investment Services, Inc. On September 1, 2002, the company purchased Moore Loans. Moore Loans is a regional finance company with three offices providing automobile loans in Richmond, Roanoke and Hampton Roads, Virginia and portions of eastern Tennessee. The statements contained in this press release that are not historical facts constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " as defined by the federal securities laws. These statements may address issues that involve estimates and assumptions made by management, risks and uncertainties, and actual results could differ materially from historical results or those anticipated by such statements. Factors that could have a material adverse effect on the operations and future prospects of the company include, but are not limited to, changes in: interest rates, general economic conditions, demand for residential mortgage loans, legislative/regulatory requirements, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. and the Board of Governors of the Federal Reserve System Board of Governors of the Federal Reserve System The managing body of the Federal Reserve System, which sets policies on bank practices and the money supply. , the quality of the loan portfolio, competition, demand for financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. in the company's market area and accounting principles and guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. . These risks and uncertainties should be considered in evaluating the forward-looking statements, and readers are cautioned not to place undue reliance on such statements, which speak only as of their dates.
Selected Financial Information
(dollars in thousands, except per share data)
Balance Sheets 12/31/02 12/31/01
Securities - available
for sale at fair value $ 60,629 $ 53,953
Loans held for sale 107,227 69,263
Loans, net (1) 328,634 246,112
Federal Home Loan Bank stock 2,760 1,595
Total assets 551,921 404,076
Deposits 383,533 323,913
Other borrowings (2) 94,479 27,204
Shareholders' equity $ 56,233 $ 44,743
For The Quarter Ended
Statements of Income 12/31/02 12/31/01
Interest income $ 10,021 $ 7,002
Interest expense 2,553 2,657
Provision for loan losses (3) 650 100
Other operating income 6,679 6,145
Other operating expenses 9,170 6,682
Income tax expense 1,369 1,172
Net income $ 2,958 $ 2,536
Earnings per common share -
assuming dilution $ .79 $ .71
For The Twelve Months
Ended
Statements of Income 12/31/02 12/31/01
Interest income $ 30,620 $ 28,234
Interest expense 9,184 11,984
Provision for loan losses (3) 1,141 400
Other operating income 21,453 17,421
Other operating expenses 27,846 21,964
Income tax expense 4,137 3,318
Net income $ 9,765 $ 7,989
Earnings per common share -
assuming dilution $ 2.67 $ 2.23
For The Quarter Ended
Selected Ratios 12/31/02 12/31/01
Book value per share $ 15.41 $ 12.69
Dividends per share $ .16 $ .15
Return on average assets (4) 2.24% 1.75%
Return on average equity (4) 21.72% 15.75%
Net interest margin
(fully taxable basis)(5) 6.38% 5.02%
For The Twelve Months
Ended
Selected Ratios 12/31/02 12/31/01
Book value per share $ 15.41 $ 12.69
Dividends per share $ .62 $ .58
Return on average assets (4) 2.13% 1.89%
Return on average equity (4) 19.07% 17.09%
Net interest margin
(fully taxable basis) (5) 5.50% 4.93%
(1) Included in loans as of December 31, 2002 are approximately
$64,236,000 in loans attributable to Moore Loans.
(2) Included in borrowings as of December 31, 2002 are $20,000,000
in advances from the Federal Home Loan Bank, $29,344,000 in draws on a
revolving line of credit from a third party bank, $5,000,000 from a
fixed rate loan from a third party bank and $3,750,000 in subordinated
debt from the previous owners of Moore Loans. These borrowings were
used for the purchase and to fund a portion of the loans outstanding
at Moore Loans.
(3) Included in the provision for loan losses is $450,000 for the
quarter ended 12/31/02 and $641,000 for the year ended 12/31/02
attributable to Moore Loans.
(4) Excludes a non-recurring insurance benefit of $277,000, or
$.08 per share received in the second quarter of 2002 and a $776,000
or $.22 per share after tax gain on the sale of the Tappahannock
branch which occurred in the fourth quarter of 2001.
(5) The increase in net interest margins is largely a result of
the purchase of Moore Loans on September 1, 2002.
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