C&f Financial Corporation · NASDAQ:CFFI
C&f Financial — Investor Presentation (August 2023)
33 slides from C&f Financial's investor presentation, Aug 7, 2023
Slide 1: Investor Presentation August 2023
Investor Presentation August 2023
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Statements. Certain statements in this presentation may constitute “forward-looking statements” within the meaning of federal securities laws. These forward-looking statements are based on the beliefs of the Corporation’s management, as well as assumptions made
Slide 3: Our Company
Our Company
Slide 4: Investment Highlights (as of 06/30/2023)
Investment Highlights (as of 06/30/2023) $2.42 Total Assets ($B) $182.8 Market Cap ($mil) • Strong community banking funding base with roots in key markets in Virginia • Regional exposure through elite mortgage banking and consumer finance segments • Diverse lines of business with experienced manage
Slide 5: Our Executive Leadership
Our Executive Leadership • President of C&F Bank • 30+ years in financial services industry including leadership experience with the Virginia Bankers Association and PricewaterhouseCoopers • 25+ years in leadership at C&F Thomas F. Cherry President & CEO C&F Financial Corporation Age: 54 • 20+ years
Slide 6: Awards
Awards (@ LEADERSHIP PROFESSIONAL DEVELOPMENT WORK-LIFE FLEXIBILITY
Slide 7: Our Vision and Values
Our Vision and Values “It is our aim to be the premier financial services company in the markets we serve.” 7
Slide 8: Our Lines of Business
Our Lines of Business Community Banking Mortgage Banking Consumer Finance We conduct mortgage banking activities through C&F Mortgage and its 51%-owned subsidiary, C&F Select LLC. C&F Mortgage provides mortgage loan origination services through 15 locations in Virginia and one each in Maryland, Nort
Slide 9: Community Banking
Community Banking Community banking segment • Strong community bank franchise led by seasoned community bank leaders • Opened loan production offices in Charlottesville, Fredericksburg, and Hampton Roads over the past 5 years • Full-service brokerage firm offering a comprehensive range of wealth man
Slide 10: Community banking segment
Community banking segment 10 The footprint includes 7 of the top 10 “non-Northern Virginia” counties and cities in 2023 median household income and 5 of the top 10 in projected population growth through 2028 Demographic data is provided by Claritas based primarily on US Census data. For non-census y
Slide 11: Mortgage Banking
Mortgage Banking Mortgage banking segment • Strong mortgage banking franchise led by seasoned mortgage banking leaders • Division to provide mortgage loan origination as a service • Originations concentrated in purchase financing reduces business cycle impact • All originations sold servicing releas
Slide 12: Mortgage banking segment
Mortgage banking segment Lender Solutions is a growing division of C&F’s mortgage banking segment that provides mortgage loan origination as a service to community financial institutions As of June 30, 2023, Lender Solutions active clientele included 21 community financial institutions, compared to
Slide 13: Consumer Finance
Consumer finance segment Consumer Finance • Unique indirect automobile financing franchise with a regional presence and seasoned management team • Established in 2002 with the acquisition of an indirect, non-prime auto finance company • Over the past several years we have adjusted underwriting crite
Slide 14: Consumer finance segment
Consumer finance segment 37% 28% 21% 14% 9% 7% 33% 33% 30% 28% 24% 23% 20% 24% 24% 28% 29% 30% 6% 8% 11% 15% 22% 24% 4% 7% 14% 15% 16% 16% 2018 2019 2020 2021 2022 Jun-23 Credit Score at Origination Marginal Fair Fairly Good Good Very Good Beginning in 2016 with the consumer finance segment’s implem
Slide 15: Balance Sheet - Corporation
Total Deposits ($bil) $1.29 $1.75 $1.91 $2.00 $2.00 2019 2020 2021 2022 Jun-23 Balance Sheet - Corporation Total Assets ($bil) 11.4% CAGR 13.3% CAGR 12.7% CAGR Total Loans HFI, excl PPP * ($bil) 15 $1.66 $2.09 $2.26 $2.33 $2.42 2019 2020 2021 2022 Jun-23 * Excludes Paycheck Protection Program (PPP)
Slide 16: Net Interest Margin (NIM) - Corporation
Net Interest Margin (NIM) - Corporation Yield, Cost, and NIM (%) 16 QTD QTD 1.06 0.77 0.44 0.38 0.82 1.19 6.51 5.39 4.67 4.63 5.30 5.41 5.52 4.65 4.26 4.27 4.52 4.29 2019 2020 2021 2022 Mar-23 Jun-23 Cost of Funds Yield on Earning Assets NIM
Slide 17: Noninterest Income
Noninterest Income C&F Financial Corporation Noninterest Income ($mil) 17 Community Banking Noninterest Income (% of total) (YTD Jun-23) Mortgage Banking Noninterest Income (% of total) (YTD Jun-23) * * Includes other income (loss), net recorded at the holding company and elimination of intercompany
Slide 18: Earnings - Corporation
Return on Average Equity (ROAE) (%) Earnings - Corporation Earnings per Share (EPS) ($) Return on Average Assets (ROAA) (%) 18 $5.47 $6.06 $7.95 $8.29 $3.49 $3.70 2019 2020 2021 2022 Jun-22 Jun-23 12.02 12.54 14.77 14.84 12.36 12.69 2019 2020 2021 2022 Jun-22 Jun-23 Return on Average Tangible Common
Slide 19: Capital - Bank
Capital - Bank 9.9% 10.0% 8.6% 5.0% 4.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2022 Jun-23 Jun-23 w/ AOCI Impact Tier 1 Leverage Ratio 12.9% 12.8% 11.0% 6.5% 4.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2022 Jun-23 Jun-23 w/ AOCI Impact CET 1 Risk-based Capital Ratio 14.2% 14.1% 12.3% 10% 8% 0.0%
Slide 20: Capital - Corporation
Capital - Corporation 9.9% 9.9% 8.5% 4.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2022 Jun-23 Jun-23 w/ AOCI Impact Tier 1 Leverage Ratio 7.32% 8.00% 8.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 2022 Jun-23 Jun-23 w/ AOCI Impact TCE Ratio 11.4% 11.3% 9.5% 4.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2022 Ju
Slide 21: Funding Sources - Corporation
Funding Sources - Corporation 21 * The Corporation may rely on brokered deposits on a limited basis as a means of maintaining and diversifying liquidity and funding sources. Internal policy limits brokered deposits to 20 percent of total deposits. ($ thousands) Available Used Net Availability Excess
Slide 22: Assets - Corporation
$165 $190 $802 $313 $59 $491 $1,212 $475 Cash and Cash Equivalents Securities Loans, HFI, excl PPP (Community Banking)* Loans, HFI (Consumer Finance) 2019 2020 2021 2022 Jun-23 Assets - Corporation Composition (% of Total Assets) (Jun-23) Yield on Earning Assets (%) Growth by Type ($ mil) 22 12.7% C
Slide 23: Loans, HFI - Corporation
Loans, HFI - Corporation Yield (%) 23 13.9% CAGR 12.7% 9.2% CAGR CAGR QTD QTD 7.58 6.18 5.86 5.85 6.35 6.45 2019 2020 2021 2022 Mar-23 Jun-23 Growth by Type ($ mil) ($ mil) June 30, 2023 % of Total Loans Apartments $ 121.8 7.4% Retail 91.5 5.6% Office 70.3 4.3% Industrial/Warehouse 47.5 2.9% Hotels
Slide 24: Asset Quality
Asset Quality Allowance for Credit Losses (ACL) (% of Total Loans) Nonaccruals (% of Total Loans) Net Charge-offs (% of Average Loans) 24 Amendments to ASC 326 (“CECL”) were adopted by the Corporation on January 1, 2023. 0.19 0.29 0.23 0.01 0.04 0.20 0.13 0.10 0.19 0.14 2019 2020 2021 2022 Jun-23 Ba
Slide 25: Securities - Corporation
Securities - Corporation Composition (% of Total Assets) (Jun-23) Yield (%) Growth by Type ($ mil) 25 Weighted average life of the portfolio as of June 30, 2023 was 3.76 years. QTD QTD U.S. Treasury securities 11% U.S. government agencies and corporations 23% Mortgage-backed securities 35% Obligatio
Slide 26: Funding - Corporation
Funding - Corporation Composition (% of Total Assets) (Jun-23) Cost of Funds (%) 26 QTD QTD Total Deposits 83% Borrowings 6% TruPS 1% Equity 8% Other 2% 1.06 0.77 0.44 0.38 0.83 1.19 2019 2020 2021 2022 Mar-23 Jun-23
Slide 27: Deposits
Deposits Cost of Deposits (%) Growth by Type ($ mil) 27 12.5% CAGR 0.43 0.24 0.17 0.23 0.51 0.57 3.44 1.64 0.90 0.76 1.70 2.55 0.75 0.60 0.30 0.26 0.61 0.93 2019 2020 2021 2022 Mar-23 Jun-23 Savings and interest bearing Time Total Deposits QTD QTD $297 $572 $422 $502 $781 $470 $582 $907 $426 $605 $1
Slide 28: Deposit Trends
0.25% 0.23% 0.22% 0.25% 0.34% 0.61% 0.93% Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Total Deposits Cost of Deposits Cumulative Deposit Beta Deposit Trends 28 -1.1% 0.7% 2.7% 8.6% 14.6% 0.35% 0.34% 0.32% 0.37% 0.51% 0.88% 1.31% Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Interest-Bearing
Slide 29: Granular Deposit Base
Granular Deposit Base Consumer Deposits • ~69 thousand accounts • $17,500 average balance Commercial Deposits • ~13 thousand accounts • $62,500 average balance 72% 21% 7% Insured Uninsured Secured Public Funds Total Deposits $2.0 Billion As of 6/30/23 29
Slide 30: Appendix
Appendix
Slide 31: Acquisitions
Acquisitions • Headquartered in Powhatan, VA • $390 million in total assets at announcement • 7 community banking offices • The transaction was completed on October 1, 2013 • Headquartered in Montross, VA • $194 million in total assets at announcement • 5 community banking offices • The transaction
Slide 32: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 32 ($ thousands) 2020 2021 2022 Jun-22 Jun-23 Return on Average Tangible Common Equity Average total equity, as reported $ 178,862 $ 197,204 $ 197,876 $ 202,614 $ 202,979 Average goodwill (25,191) (25,191) (25,191) (25,191) (25,191) Average other intangible ass
Slide 33: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 33 ($ thousands, except per share) 2020 2021 2022 Jun-23 Tangible Common Equity (TCE) / Tangible Assets (TA) Total equity, as reported $ 194,471 $ 211,024 $ 196,233 $ 202,528 Goodwill (25,191) (25,191) (25,191) (25,191) Other intangible assets (2,291) (1,977) (