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Business Segments
 12 Months Ended
Dec. 31, 2020
Business Segments  
Business Segments

NOTE 21: Business Segments

​

The Corporation operates in a decentralized fashion in three principal business segments: community banking, mortgage banking and consumer finance. Revenues from community banking operations consist primarily of interest earned on loans and investment securities and fees earned on deposit accounts and debit card interchange activity. Previously, the community banking segment was referred to as the retail banking segment.  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.”

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2020

 

​

    

Community

    

Mortgage

    

Consumer

    

​

​

    

​

​

    

​

​

 

(Dollars in thousands)

​

Banking

​

Banking

​

Finance

​

Other

​

Eliminations

​

Consolidated

 

Revenues:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

62,173

​

$

4,954

​

$

38,949

​

$

—

​

$

(9,163)

​

$

96,913

​

Gains on sales of loans

​

 

3,489

​

​

25,792

​

 

—

​

 

—

​

 

(57)

​

 

29,224

​

Other noninterest income

​

 

10,843

​

 

9,985

​

 

492

​

 

4,904

​

 

(30)

​

 

26,194

​

Total operating income

​

 

76,505

​

 

40,731

​

 

39,441

​

 

4,904

​

 

(9,250)

​

 

152,331

​

Expenses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Provision for loan losses

​

 

4,600

​

 

10

​

​

6,470

​

​

—

​

​

—

​

 

11,080

​

Interest expense

​

 

10,630

​

 

1,579

​

​

8,726

​

​

1,611

​

​

(9,164)

​

 

13,382

​

Salaries and employee benefits

​

 

30,774

​

 

13,908

​

​

8,716

​

​

4,270

​

​

—

​

 

57,668

​

Depreciation and amortization

​

​

3,561

​

​

281

​

​

175

​

​

172

​

​

—

​

​

4,189

​

Other noninterest expenses

​

 

21,358

​

 

9,825

​

​

4,937

​

​

673

​

​

—

​

 

36,793

​

Total operating expenses

​

 

70,923

​

 

25,603

​

 

29,024

​

 

6,726

​

 

(9,164)

​

 

123,112

​

Income (loss) before income taxes

​

 

5,582

​

 

15,128

​

 

10,417

​

 

(1,822)

​

 

(86)

​

 

29,219

​

Income tax expense (benefit)

​

 

155

​

 

4,392

​

​

2,805

​

​

(539)

​

 

(18)

​

 

6,795

​

Net income (loss)

​

$

5,427

​

$

10,736

​

$

7,612

​

$

(1,283)

​

$

(68)

​

$

22,424

​

Total assets

​

$

1,950,514

​

$

239,417

​

$

314,746

​

$

44,934

​

$

(463,301)

​

$

2,086,310

​

Capital expenditures

​

$

6,528

​

$

354

​

$

3,346

​

$

—

​

$

—

​

$

10,228

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2019

 

​

    

Community

    

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

​

Capital expenditures

​

$

2,270

​

$

246

​

$

123

​

$

67

​

$

—

​

$

2,706

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2018

 

​

    

Community

    

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

​

 

2,745

​

 

—

​

 

18,527

​

Total operating income

​

 

66,048

​

 

13,874

​

 

43,527

​

 

2,751

​

 

(7,284)

​

 

118,916

​

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

​

 

1,693

​

 

—

​

 

28,668

​

Total operating expenses

​

 

53,457

​

 

11,274

​

 

34,375

​

 

4,553

​

 

(7,284)

​

 

96,375

​

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

​

Capital expenditures

​

$

3,178

​

$

133

​

$

59

​

$

4

​

$

—

​

$

3,374

​

​

During the year ended December 31, 2020, the Corporation recorded merger related expenses of $1.40 million ($1.13 million after income taxes), in connection with its acquisition of Peoples, of which $1.30 million ($1.03 million after income taxes) was allocated to the community banking segment and recorded as $119,000 of salaries and benefits expense, $879,000 of other noninterest expense and a loss on disposal of equipment of $298,000 included in other noninterest income.  The remainder was recorded as other noninterest expense at the holding company.  During the year ended December 31, 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 community banking segment and recorded as other noninterest expense, and the remainder was recorded as other noninterest expense at the holding company.  

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The community 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 community 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 community 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, with a floor of 3.5 percent, and fixed rate notes that carry interest at rates ranging from 2.4 percent to 8.0 percent. The community 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 community banking segment are not allocated to the mortgage banking, consumer finance and other segments.