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Business Segments | 12 Months Ended
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Dec. 31, 2019
Business Segments |
Business Segments | NOTE 19: Business Segments The Corporation operates in a decentralized fashion in three principal business segments: retail banking, mortgage banking and consumer finance. Revenues from retail banking operations consist primarily of interest earned on loans and investment securities and fees earned on deposit accounts and debit card interchange activity. Mortgage banking operating revenues consist principally of gains on sales of loans in the secondary market, mortgage banking fee income related to loan originations, and interest earned on mortgage loans held for sale. Revenues from consumer finance consist primarily of interest earned on purchased retail installment sales contracts. C&F Wealth Management derives revenues from offering wealth management services and insurance products through third-party service providers. The Corporation’s revenues and expenses are comprised primarily of interest expense associated with the Corporation’s trust preferred capital notes, general corporate expenses, and changes in the value of the rabbi trust and deferred compensation liability related to its nonqualified deferred compensation plan. The results of C&F Wealth Management and the Corporation are not significant to the Corporation on a consolidated basis and are included in “Other.”
|  | Year Ended December 31, 2019 |
|  | Retail |  | Mortgage |  | Consumer |  |  |  |  |  |  |  |  |  |
(Dollars in thousands) |  | Banking |  | Banking |  | Finance |  | Other |  | Eliminations |  | Consolidated |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  | $ | 59,465 |  | $ | 2,699 |  | $ | 41,389 |  | $ | 4 |  | $ | (8,547) |  | $ | 95,010 |
Gains on sales of loans |  |  | — |  |  | 10,603 |  |  | — |  |  | — |  |  | — |  |  | 10,603 |
Other noninterest income |  |  | 11,392 |  |  | 5,103 |  |  | 565 |  |  | 4,349 |  |  | — |  |  | 21,409 |
Total operating income |  |  | 70,857 |  |  | 18,405 |  |  | 41,954 |  |  | 4,353 |  |  | (8,547) |  |  | 127,022 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provision for loan losses |  |  | 360 |  |  | — |  |  | 8,155 |  |  | — |  |  | — |  |  | 8,515 |
Interest expense |  |  | 10,181 |  |  | 1,618 |  |  | 10,169 |  |  | 1,135 |  |  | (8,547) |  |  | 14,556 |
Salaries and employee benefits |  |  | 28,231 |  |  | 5,965 |  |  | 8,668 |  |  | 4,337 |  |  | — |  |  | 47,201 |
Depreciation and amortization |  |  | 3,242 |  |  | 246 |  |  | 196 |  |  | 182 |  |  | — |  |  | 3,866 |
Other noninterest expenses |  |  | 17,091 |  |  | 5,467 |  |  | 5,338 |  |  | 1,056 |  |  | — |  |  | 28,952 |
Total operating expenses |  |  | 59,105 |  |  | 13,296 |  |  | 32,526 |  |  | 6,710 |  |  | (8,547) |  |  | 103,090 |
Income (loss) before income taxes |  |  | 11,752 |  |  | 5,109 |  |  | 9,428 |  |  | (2,357) |  |  | — |  |  | 23,932 |
Income tax expense (benefit) |  |  | 1,837 |  |  | 1,336 |  |  | 2,560 |  |  | (651) |  |  | — |  |  | 5,082 |
Net income (loss) |  | $ | 9,915 |  | $ | 3,773 |  | $ | 6,868 |  | $ | (1,706) |  | $ | — |  | $ | 18,850 |
Total assets |  | $ | 1,468,627 |  | $ | 102,467 |  | $ | 314,431 |  | $ | 30,299 |  | $ | (258,392) |  | $ | 1,657,432 |
Goodwill |  | $ | 3,702 |  | $ | — |  | $ | 10,723 |  | $ | — |  | $ | — |  | $ | 14,425 |
Capital expenditures |  | $ | 2,270 |  | $ | 246 |  | $ | 123 |  | $ | 67 |  | $ | — |  | $ | 2,706 |
|  | Year Ended December 31, 2018 |
|  | Retail |  | Mortgage |  | Consumer |  |  |  |  |  |  |  |  |  |
(Dollars in thousands) |  | Banking |  | Banking |  | Finance |  | Other |  | Eliminations |  | Consolidated |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  | $ | 55,019 |  | $ | 2,018 |  | $ | 42,789 |  | $ | 6 |  | $ | (7,284) |  | $ | 92,548 |
Gains on sales of loans |  |  | — |  |  | 7,841 |  |  | — |  |  | — |  |  | — |  |  | 7,841 |
Other noninterest income |  |  | 11,029 |  |  | 4,015 |  |  | 738 |  |  | 2,135 |  |  | — |  |  | 17,917 |
Total operating income |  |  | 66,048 |  |  | 13,874 |  |  | 43,527 |  |  | 2,141 |  |  | (7,284) |  |  | 118,306 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provision for loan losses |  |  | 100 |  |  | — |  |  | 10,906 |  |  | — |  |  | — |  |  | 11,006 |
Interest expense |  |  | 6,842 |  |  | 904 |  |  | 9,413 |  |  | 1,152 |  |  | (7,284) |  |  | 11,027 |
Salaries and employee benefits |  |  | 26,632 |  |  | 5,298 |  |  | 8,542 |  |  | 1,531 |  |  | — |  |  | 42,003 |
Depreciation and amortization |  |  | 3,014 |  |  | 269 |  |  | 211 |  |  | 177 |  |  | — |  |  | 3,671 |
Other noninterest expenses |  |  | 16,869 |  |  | 4,803 |  |  | 5,303 |  |  | 1,083 |  |  | — |  |  | 28,058 |
Total operating expenses |  |  | 53,457 |  |  | 11,274 |  |  | 34,375 |  |  | 3,943 |  |  | (7,284) |  |  | 95,765 |
Income (loss) before income taxes |  |  | 12,591 |  |  | 2,600 |  |  | 9,152 |  |  | (1,802) |  |  | — |  |  | 22,541 |
Income tax expense (benefit) |  |  | 1,958 |  |  | 697 |  |  | 2,460 |  |  | (594) |  |  | — |  |  | 4,521 |
Net income (loss) |  | $ | 10,633 |  | $ | 1,903 |  | $ | 6,692 |  | $ | (1,208) |  | $ | — |  | $ | 18,020 |
Total assets |  | $ | 1,351,932 |  | $ | 51,226 |  | $ | 296,876 |  | $ | 16,461 |  | $ | (195,084) |  | $ | 1,521,411 |
Goodwill |  | $ | 3,702 |  | $ | — |  | $ | 10,723 |  | $ | — |  | $ | — |  | $ | 14,425 |
Capital expenditures |  | $ | 3,178 |  | $ | 133 |  | $ | 59 |  | $ | 4 |  | $ | — |  | $ | 3,374 |
|  | Year Ended December 31, 2017 |
|  | Retail |  | Mortgage |  | Consumer |  |  |  |  |  |  |  |  |  |
(Dollars in thousands) |  | Banking |  | Banking |  | Finance |  | Other |  | Eliminations |  | Consolidated |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  | $ | 49,564 |  | $ | 1,660 |  | $ | 44,745 |  | $ | 1 |  | $ | (6,377) |  | $ | 89,593 |
Gains on sales of loans |  |  | — |  |  | 8,553 |  |  | — |  |  | — |  |  | — |  |  | 8,553 |
Other noninterest income |  |  | 10,501 |  |  | 4,095 |  |  | 878 |  |  | 3,205 |  |  | — |  |  | 18,679 |
Total operating income |  |  | 60,065 |  |  | 14,308 |  |  | 45,623 |  |  | 3,206 |  |  | (6,377) |  |  | 116,825 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provision for loan losses |  |  | 200 |  |  | — |  |  | 16,235 |  |  | — |  |  | — |  |  | 16,435 |
Interest expense |  |  | 6,076 |  |  | 587 |  |  | 8,164 |  |  | 1,151 |  |  | (6,377) |  |  | 9,601 |
Salaries and employee benefits |  |  | 25,132 |  |  | 5,945 |  |  | 9,272 |  |  | 3,248 |  |  | — |  |  | 43,597 |
Depreciation and amortization |  |  | 2,818 |  |  | 239 |  |  | 212 |  |  | 178 |  |  | — |  |  | 3,447 |
Other noninterest expenses |  |  | 15,133 |  |  | 4,946 |  |  | 5,209 |  |  | 491 |  |  | — |  |  | 25,779 |
Total operating expenses |  |  | 49,359 |  |  | 11,717 |  |  | 39,092 |  |  | 5,068 |  |  | (6,377) |  |  | 98,859 |
Income (loss) before income taxes |  |  | 10,706 |  |  | 2,591 |  |  | 6,531 |  |  | (1,862) |  |  | — |  |  | 17,966 |
Income tax expense (benefit) |  |  | 5,727 |  |  | 1,606 |  |  | 4,198 |  |  | (137) |  |  | — |  |  | 11,394 |
Net income (loss) |  | $ | 4,979 |  | $ | 985 |  | $ | 2,333 |  | $ | (1,725) |  | $ | — |  | $ | 6,572 |
Total assets |  | $ | 1,336,100 |  | $ | 64,513 |  | $ | 291,774 |  | $ | 11,220 |  | $ | (194,551) |  | $ | 1,509,056 |
Goodwill |  | $ | 3,702 |  | $ | — |  | $ | 10,723 |  | $ | — |  | $ | — |  | $ | 14,425 |
Capital expenditures |  | $ | 3,524 |  | $ | 410 |  | $ | 232 |  | $ | 14 |  | $ | — |  | $ | 4,180 |
In 2019, the Corporation recorded merger related expenses of $709,000 ($653,000 after income taxes) in connection with its acquisition of Peoples, of which $236,000 ($196,000 after income taxes) was allocated to the retail banking segment and the remainder was recorded as a holding company expense. The retail banking segment extends two warehouse lines of credit to the mortgage banking segment, providing a portion of the funds needed to originate mortgage loans. The retail banking segment charges the mortgage banking segment interest at the daily FHLB advance rate plus a spread ranging from 50 basis points to 175 basis points. The retail banking segment also provides the consumer finance segment with a portion of the funds needed to purchase loan contracts by means of variable rate notes that carry interest at one-month LIBOR plus 200 basis points and fixed rate notes that carry interest at rates ranging from 2.0 percent to 8.0 percent. The retail banking segment acquires certain residential real estate loans from the mortgage banking segment at prices similar to those paid by third-party investors. These transactions are eliminated to reach consolidated totals. Certain corporate overhead costs incurred by the retail banking segment are not allocated to the mortgage banking, consumer finance and other segments.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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