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Borrowings
 12 Months Ended
Dec. 31, 2024
Borrowings  
Borrowings

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NOTE 11: Borrowings

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The table below presents selected information on short-term borrowings:

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December 31, 

 

(Dollars in thousands)

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2024

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2023

 

Balance outstanding at year end1

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$

28,994

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$

58,223

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Maximum balance at any month end during the year

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$

58,842

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$

145,579

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Average balance for the year

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$

29,614

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$

96,882

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Weighted average rate for the year

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1.88

%  

 

3.79

%

Weighted average rate on borrowings at year end

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1.64

%  

 

3.00

%

Estimated fair value at year end

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$

28,993

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$

55,732

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1Consists of $28.99 million of repurchase transactions with customers, which generally mature the day following the day sold and are secured by investment securities at December 31, 2024. Consists of $30.71 million of repurchase transaction with customers, $27.50 million with the FHLB, and $18,000 of overnight fed funds borrowings with correspondent banks at December 31, 2023.

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Long-term borrowings at December 31, 2024 were comprised of 1) advances from the FHLB consisting of $35.00 million of convertible advances and $5.00 million of fixed rate hybrid advances and 2) $20.00 million of the Corporation’s subordinated notes due in 2030 (the 2030 Subordinated Notes).  

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The FHLB convertible advances have fixed rates of interest unless the FHLB exercises its option to convert the interest on these advances from fixed rate to variable rate.  The fixed rate hybrid FHLB advances provide fixed-rate funding until the stated maturity date. C&F Bank may add interest rate caps or floors at a future date, at which time the cost of the caps or floors will be added to the advance note. The table below presents selected information for the FHLB advances at December 31, 2024:

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Next

 

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Conversion

 

(Dollars in thousands)

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Interest Rate

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Maturity Date

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Option Date

 

Fixed Rate Hybrid Advances

$

5,000

 

4.45

%

03/05/27

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Convertible Advances

$

5,000

 

4.06

%

03/05/27

 

03/05/25

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$

10,000

 

4.13

%

06/07/27

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03/07/25

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$

10,000

 

4.68

%

03/23/26

 

09/23/25

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$

10,000

 

4.55

%

09/21/26

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03/23/26

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The 2030 Subordinated Notes bear interest at a fixed rate of 4.875 percent until September 2025 and at the three month SOFR plus 475.5 basis points thereafter.  The 2030 Subordinated Notes may be redeemed at the option of the Corporation at any time beginning in September 2025.  The Corporation repaid $4.00 million of subordinated notes during 2023. The subordinated notes of the Corporation rank junior to all existing and future senior indebtedness of the Corporation and are structurally subordinated to all existing and future debt and liabilities of the Bank and its subsidiaries.  These borrowings are presented in the Consolidated Balance Sheets net of issuance costs and, as applicable, acquisition premium. 

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The contractual maturities of long-term borrowings at December 31, 2024 are as follows:

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(Dollars in thousands)

   

Fixed Rate

    

Floating Rate

    

      Total      

 

2025

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$

—

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$

—

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$

—

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2026

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20,000

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—

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20,000

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2027

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20,000

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—

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20,000

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2028

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—

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—

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—

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2029

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—

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—

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—

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Thereafter

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20,000

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—

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20,000

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$

60,000

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$

—

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$

60,000

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The Corporation’s available sources of credit for future borrowings total approximately $606.23 million at December 31, 2024, which consisted of $217.73 million available from the FHLB, $313.50 million available from the FRB, $75.00 million under unsecured federal funds agreements with third party financial institutions.  Credit available from the FHLB is secured by a blanket floating lien on all qualifying closed-end and revolving, open-end loans of C&F Bank secured by 1-4 family residential properties.  Credit available from the FRB is secured by liens on specific loans of C&F Bank. Additional loans and securities are available that can be pledged as collateral for future borrowings from the FRB or the FHLB above the current lendable collateral value.

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C&F Financial Statutory Trust I (Trust I), C&F Financial Statutory Trust II (Trust II) and Central Virginia Bankshares Statutory Trust I (CVBK Trust I) are wholly-owned non-operating subsidiaries of the Corporation, formed for the purpose of issuing trust preferred capital securities. Collectively, these trusts have issued $25.00 million of trust preferred capital securities to institutional investors through private placements and $775,000 in common equity that is held by the Corporation.  Trust preferred capital securities of $5.00 million issued by CVBK Trust I, $10.00 million issued by Trust I, and $10.00 million issued by Trust II mature in 2033, 2035 and 2037, respectively, and are redeemable at the Corporation’s option.  Each of the trusts is required to make quarterly distributions to the holders of the securities at a rate based on the three-month SOFR plus a spread of between 1.57 percent and 3.15 percent.  During 2024, 2023 and 2022, the Corporation used interest rate swaps in designated cash flow hedges of interest payments on the trust preferred capital securities to mitigate the effects of changes in interest rates.  The interest rate swaps manage the Corporation’s exposure to variability in cash flows for periods that end between June 2026 and June 2029. At December 31, 2024, the effect of the interest rate swaps was a fixed rate of interest on the securities issued by CVBK Trust I, Trust I and Trust II of 4.64 percent, 5.80 percent and 5.10 percent, respectively.  The principal assets of CVBK Trust I, Trust I and Trust II are trust preferred capital notes of the Corporation of $5.16 million, $10.31 million and $10.31 million, respectively, which have like maturities and like interest rates to the trust preferred capital securities. The interest payments by the Corporation on the notes will be

used by the trusts to pay the quarterly distributions on the trust preferred capital securities.  The trusts are unconsolidated subsidiaries of the Corporation, and the Corporation’s trust preferred capital notes are presented as liabilities in the Consolidated Balance Sheets net of acquisition discount, as applicable.

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Subject to certain exceptions and limitations, the Corporation may elect from time to time to defer interest payments on the junior subordinated debt securities, which would result in a deferral of distribution payments on the related capital securities.