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Business Segments
 12 Months Ended
Dec. 31, 2022
Business Segments  
Business Segments

NOTE 20: Business Segments

​

The Corporation operates in a decentralized fashion in three business segments: community banking, mortgage banking and consumer finance. Beginning with the first quarter of 2021, the community banking segment comprises C&F Bank and C&F Wealth Management.  Prior to 2021, the segment comprised only C&F Bank, and prior periods have been restated to conform to the current period presentation. Revenues from community banking operations consist primarily of net interest income related to investments in loans and securities and outstanding deposits and borrowings, fees earned on deposit accounts and debit card interchange activity, and net revenues from offering wealth management services and insurance products through third-party service providers.  Mortgage banking operating revenues consist principally of gains on sales of loans in the secondary market, mortgage banking fee income related to loan originations, fees earned by providing mortgage loan origination functions to third-party lenders, and net interest income on mortgage loans held for sale. Revenues from consumer finance operations consist primarily of net interest income earned on purchased retail installment sales contracts.

​

The Corporation’s revenues and expenses are comprised primarily of interest expense associated with the Corporation’s trust preferred capital notes and subordinated debt, 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 the Corporation,

which includes funding and operating costs that are not allocated to the business segments, are included in the column labeled “Other” in the tables below.

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2022

 

​

    

Community

    

Mortgage

    

Consumer

    

​

​

    

​

​

    

​

​

 

(Dollars in thousands)

​

Banking

​

Banking

​

Finance

​

Other

​

Eliminations

​

Consolidated

 

Interest income

​

$

72,568

​

$

2,036

​

$

42,441

​

$

—

​

$

(15,691)

​

$

101,354

​

Interest expense

​

 

5,532

​

​

662

​

 

15,124

​

 

2,358

​

 

(15,786)

​

 

7,890

​

Net interest income

​

 

67,036

​

 

1,374

​

 

27,317

​

 

(2,358)

​

 

95

​

 

93,464

​

Gain on sales of loans

​

​

—

​

​

7,963

​

​

—

​

​

—

​

​

(465)

​

​

7,498

​

Other noninterest income

​

​

19,250

​

​

4,856

​

​

320

​

​

(3,230)

​

​

(212)

​

​

20,984

​

Net revenue

​

 

86,286

​

 

14,193

​

 

27,637

​

 

(5,588)

​

 

(582)

​

 

121,946

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Provision for loan losses

​

 

(600)

​

 

32

​

​

3,740

​

​

—

​

​

—

​

 

3,172

​

Noninterest expense

​

 

56,718

​

 

12,580

​

​

14,554

​

​

(1,982)

​

​

(60)

​

 

81,810

​

Income (loss) before taxes

​

 

30,168

​

 

1,581

​

 

9,343

​

 

(3,606)

​

 

(522)

​

 

36,964

​

Income tax expense (benefit)

​

 

5,794

​

 

371

​

​

2,512

​

​

(973)

​

 

(109)

​

 

7,595

​

Net income (loss)

​

$

24,374

​

$

1,210

​

$

6,831

​

$

(2,633)

​

$

(413)

​

$

29,369

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Capital expenditures

​

$

3,265

​

$

66

​

$

17

​

$

—

​

$

—

​

$

3,348

​

Depreciation and amortization

​

$

3,720

​

$

226

​

$

410

​

$

—

​

$

—

​

$

4,356

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2021

 

​

    

Community

    

Mortgage

    

Consumer

    

​

​

    

​

​

    

​

​

 

(Dollars in thousands)

​

Banking

​

Banking

​

Finance

​

Other

​

Eliminations

​

Consolidated

 

Interest income

​

$

62,402

​

$

3,845

​

$

37,803

​

$

—

​

$

(10,322)

​

$

93,728

​

Interest expense

​

 

5,693

​

​

1,157

​

 

9,503

​

 

2,349

​

 

(10,343)

​

 

8,359

​

Net interest income

​

 

56,709

​

 

2,688

​

 

28,300

​

 

(2,349)

​

 

21

​

 

85,369

​

Gain on sales of loans

​

​

—

​

​

22,370

​

​

—

​

​

—

​

​

(91)

​

​

22,279

​

Other noninterest income

​

​

15,208

​

​

9,192

​

​

378

​

​

2,207

​

​

(101)

​

​

26,884

​

Net revenue

​

 

71,917

​

 

34,250

​

 

28,678

​

 

(142)

​

 

(171)

​

 

134,532

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Provision for loan losses

​

 

(200)

​

 

(45)

​

​

820

​

​

—

​

​

—

​

 

575

​

Noninterest expense

​

 

54,981

​

 

23,328

​

​

14,213

​

​

3,375

​

​

(22)

​

 

95,875

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Income (loss) before taxes

​

 

17,136

​

 

10,967

​

 

13,645

​

 

(3,517)

​

 

(149)

​

 

38,082

​

Income tax expense (benefit)

​

 

3,051

​

 

3,284

​

​

3,685

​

​

(1,030)

​

 

(31)

​

 

8,959

​

Net income (loss)

​

$

14,085

​

$

7,683

​

$

9,960

​

$

(2,487)

​

$

(118)

​

$

29,123

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Capital expenditures

​

$

878

​

$

164

​

$

3,744

​

$

—

​

$

—

​

$

4,786

​

Depreciation and amortization

​

$

4,113

​

$

256

​

$

372

​

$

—

​

$

—

​

$

4,741

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2020

 

​

    

Community

    

Mortgage

    

Consumer

    

​

​

    

​

​

    

​

​

 

(Dollars in thousands)

​

Banking

​

Banking

​

Finance

​

Other

​

Eliminations

​

Consolidated

 

Interest income

​

$

62,173

​

$

4,954

​

$

38,949

​

$

—

​

$

(9,163)

​

$

96,913

​

Interest expense

​

 

10,630

​

​

1,579

​

 

8,726

​

 

1,611

​

 

(9,164)

​

 

13,382

​

Net interest income

​

 

51,543

​

 

3,375

​

 

30,223

​

 

(1,611)

​

 

1

​

 

83,531

​

Gain on sales of loans

​

​

3,489

​

​

25,792

​

​

—

​

​

—

​

​

(57)

​

​

29,224

​

Other noninterest income

​

​

12,896

​

​

9,985

​

​

492

​

​

2,040

​

​

(30)

​

​

25,383

​

Net revenue

​

 

67,928

​

 

39,152

​

 

30,715

​

 

429

​

 

(86)

​

 

138,138

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Provision for loan losses

​

 

4,600

​

 

10

​

​

6,470

​

​

—

​

​

—

​

 

11,080

​

Noninterest expense

​

 

56,770

​

 

24,014

​

​

13,828

​

​

3,227

​

​

—

​

 

97,839

​

Income (loss) before taxes

​

 

6,558

​

 

15,128

​

 

10,417

​

 

(2,798)

​

 

(86)

​

 

29,219

​

Income tax expense (benefit)

​

 

411

​

 

4,392

​

​

2,805

​

​

(795)

​

 

(18)

​

 

6,795

​

Net income (loss)

​

$

6,147

​

$

10,736

​

$

7,612

​

$

(2,003)

​

$

(68)

​

$

22,424

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Capital expenditures

​

$

6,528

​

$

354

​

$

3,346

​

$

—

​

$

—

​

$

10,228

​

Depreciation and amortization

​

$

3,733

​

$

281

​

$

175

​

$

—

​

$

—

​

$

4,189

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Community

    

Mortgage

    

Consumer

    

​

​

    

​

​

    

​

​

​

(Dollars in thousands)

​

Banking

​

Banking

​

Finance

​

Other

​

Eliminations

​

Consolidated

​

Total assets at December 31, 2022

​

$

2,206,299

​

$

24,500

​

$

479,864

​

$

43,241

​

$

(421,587)

​

$

2,332,317

​

Total assets at December 31, 2021

​

$

2,131,391

​

$

105,547

​

$

372,292

​

$

44,897

​

$

(389,606)

​

$

2,264,521

​

​

No merger related expenses were recorded during the year ended December 31, 2022 or 2021. 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.  

​

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 term SOFR plus 211.5 basis points, with a floor of 3.5 percent and a ceiling of 6.0 percent, and fixed rate notes that carry interest at rates ranging from 2.5 percent to 5.1 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. In addition to unallocated expenses recorded by the holding company, certain overhead costs are incurred by the community banking segment and are not allocated to the mortgage banking and consumer finance segments.