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Equity, Other Comprehensive Income (Loss) and Earnings Per Share

6 Months Ended

Jun. 30, 2022

Equity, Other Comprehensive Income (Loss) and Earnings Per Share

Equity, Other Comprehensive Income (Loss) and Earnings Per Share

NOTE 6: Equity, Other Comprehensive Income (Loss) and Earnings Per Share

Equity and Noncontrolling Interest

The Corporation’s Board of Directors authorized a program, effective December 1, 2021, to repurchase up to $10.0 million of the Corporation’s common stock through November 30, 2022 (the 2021 Repurchase Program). During the three and six months ended June 30, 2022, the Corporation repurchased 22,164 shares and 31,881 shares, respectively, for an aggregate cost of $1.12 million and $1.61 million, respectively, under the 2021 Repurchase Program.

The Corporation’s previous share repurchase program, which was authorized by the Board of Directors in November 2020, expired on November 30, 2021. There were 90,255 shares repurchased under the previous share repurchase program during the three and six months ended June 30, 2021 for an aggregate cost of $4.46 million.

Additionally during the six months ended June 30, 2022 and 2021, the Corporation withheld 4,503 shares and 7,311 shares of its common stock, respectively, from employees to satisfy tax withholding obligations upon vesting of restricted stock.

Noncontrolling interest represents an ownership interest in C&F Select LLC, a subsidiary of C&F Mortgage, held by an unrelated investor.

Accumulated Other Comprehensive Loss, Net

Changes in each component of accumulated other comprehensive loss were as follows for the three months ended June 30, 2022 and 2021:

Securities

Defined

Cash

Available

Benefit

Flow

(Dollars in thousands)

For Sale

Plan

Hedges

Total

Accumulated other comprehensive (loss) income at March 31, 2022

(14,253)

(2,062)

451

(15,864)

Net (loss) income arising during the period

(12,760)

—

573

(12,187)

Related income tax effects

2,680

—

(147)

2,533

(10,080)

—

426

(9,654)

Reclassifications into net income

—

(7)

(2)

(9)

Related income tax effects

—

(5)

(2)

(7)

Other comprehensive (loss) income, net of tax

(10,080)

(5)

424

(9,661)

Accumulated other comprehensive (loss) income at June 30, 2022

(24,333)

(2,067)

875

(25,525)


	Securities		Defined		Cash
	Available		Benefit		Flow
(Dollars in thousands)	For Sale		Plan		Hedges		Total
Accumulated other comprehensive income (loss) at March 31, 2021	$	2,024	$	(4,951)	$	(633)	$	(3,560)

Net income (loss) arising during the period		989		—		(235)		754
Related income tax effects		(207)		—		61		(146)
		782		—		(174)		608

Reclassifications into net income		(6)		44		(2)		36
Related income tax effects		1		(9)		—		(8)
		(5)		35		(2)		28

Other comprehensive income (loss), net of tax		777		35		(176)		636

Accumulated other comprehensive income (loss) at June 30, 2021	$	2,801	$	(4,916)	$	(809)	$	(2,924)

Changes in each component of accumulated other comprehensive loss were as follows for the six months ended June 30, 2022 and 2021:

Securities

Defined

Cash

Available

Benefit

Flow

(Dollars in thousands)

For Sale

Plan

Hedges

Total

Accumulated other comprehensive income (loss) at December 31, 2021

437

(2,055)

(469)

(2,087)

Net (loss) income arising during the period

(31,355)

—

1,813

(29,542)

Related income tax effects

6,585

—

(466)

6,119

(24,770)

—

1,347

(23,423)

Reclassifications into net income

—

(15)

(4)

(19)

Related income tax effects

—

(12)

(3)

(15)

Other comprehensive (loss) income, net of tax

(24,770)

(12)

1,344

(23,438)

Accumulated other comprehensive (loss) income at June 30, 2022

(24,333)

(2,067)

875

(25,525)


	Securities		Defined		Cash
	Available		Benefit		Flow
(Dollars in thousands)	For Sale		Plan		Hedges		Total
Accumulated other comprehensive income (loss) at December 31, 2020	$	4,397	$	(4,985)	$	(1,367)	$	(1,955)

Net (loss) income arising during the period		(1,982)		—		755		(1,227)
Related income tax effects		416		—		(194)		222
		(1,566)		—		561		(1,005)

Reclassifications into net income		(38)		87		(4)		45
Related income tax effects		8		(18)		1		(9)
		(30)		69		(3)		36

Other comprehensive (loss) income, net of tax		(1,596)		69		558		(969)

Accumulated other comprehensive income (loss) at June 30, 2021	$	2,801	$	(4,916)	$	(809)	$	(2,924)

The following table provides information regarding reclassifications from accumulated other comprehensive loss into net income for the three and six months ended June 30, 2022 and 2021:


	Three Months Ended June 30,				Six Months Ended June 30,				Line Item In the
(Dollars in thousands)	2022		2021		2022		2021		Consolidated Statements of Income
Securities available for sale:
Reclassification of net realized gains into net income	$	—	$	6	$	—	$	38	Net gains on sales, maturities and calls of available for sale securities
Related income tax effects		—		(1)		—		(8)	Income tax expense
		—		5		—		30	Net of tax

Defined benefit plan:¹
Reclassification of recognized net actuarial losses into net income		(10)		(61)		(19)		(121)	Noninterest expenses - Other
Amortization of prior service credit into net income		17		17		34		34	Noninterest expenses - Other
Related income tax effects		(2)		9		(3)		18	Income tax expense
		5		(35)		12		(69)	Net of tax

Cash flow hedges:
Amortization of hedging gains into net income		2		2		4		4	Interest expense - Trust preferred capital notes
Related income tax effects		—		—		(1)		(1)	Income tax expense
		2		2		3		3	Net of tax

Total reclassifications into net income	$	7	$	(28)	$	15	$	(36)

1	See “Note 7: Employee Benefit Plans,” for additional information.

Earnings Per Share (EPS)

The components of the Corporation’s EPS calculations are as follows:


	Three Months Ended June 30,
(Dollars in thousands)	2022		2021
Net income attributable to C&F Financial Corporation	$	6,742	$	8,008
Weighted average shares outstanding—basic and diluted		3,534,489		3,653,568


	Six Months Ended June 30,
(Dollars in thousands)	2022		2021
Net income attributable to C&F Financial Corporation	$	12,371	$	15,069
Weighted average shares outstanding—basic and diluted		3,541,098		3,664,752

The Corporation has applied the two-class method of computing basic and diluted EPS for each period presented because the Corporation’s unvested restricted shares outstanding contain rights to nonforfeitable dividends equal to dividends on

the Corporation’s common stock. Accordingly, the weighted average number of shares used in the calculation of basic and diluted EPS includes both vested and unvested shares outstanding.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details