On this page of StockholderLetter.com we present the 3/10/2023 shareholder letter from C & F FINANCIAL CORP — ticker symbol CFFI. Reading current and past CFFI letters to shareholders can bring important insights into the investment thesis.
20 22 An nu al Re po rt
C&F Financial Corporation A one-bank holding company providing a full range of banking services to individuals and businesses through its subsidiaries: C&F Bank (Citizens and Farmers Bank) offers traditional and digital banking services to individuals and businesses through 31 retail branches located in Virginia. C&F Finance Company Specializes in new and used indirect auto, marine and recreational vehicle lending in select areas of the following states: Alabama, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, South Carolina, Texas, Virginia, and West Virginia. C&F Mortgage Corporation Originates and sells residential mortgages throughout Virginia, West Virginia, Maryland, North Carolina, and South Carolina.* Through its subsidiary, &HUWL HG $SSUDLVDOV //& DOVR SURYLGHV UHVLGHQWLDO DSSUDLVDO VHUYLFHV C&F Wealth Management Corporation Provides a full range of securities brokerage, life and health insurance, and investment services to individuals and businesses through C&F Bank s 31 retail branch locations. *Through a separate division, Lender Solutions provides mortgage operations support to RWKHU QDQFLDO LQVWLWXWLRQV IRU D IHH Visit cffc.com for full listing of locations.
Financial Performance Consolidated net income ($ in thousands) 1.19 1.20 1.14 1.34 1.27 18,020 18,850 22,424 29,123 29,369 Return on average assets (%) 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Earnings per share diluted ($) 12.40 12.02 12.54 14.77 14.84 5.15 5.47 6.06 7.95 8.29 Return on average equity (%) 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2022 2.33 billion 2022 56.27 2021 2.26 billion 2021 59.32 2020 2.09 billion 2020 52.80 2019 1.66 billion 2019 48.07 2018 1.52 billion 2018 43.45 Total assets ($) Book value per share ($)
C&F Bank & ) %DQN VLJQL FDQWO\ FRQWULEXWHG WR RYHUDOO company earnings in 2022 as loan and deposit growth remained solid along with service fee income and debit card interchange revenue. Growing earning assets, particularly loans, has been the number one strategic goal over the past several years and will continue to be in 2023 and beyond. Loans outstanding grew by 10% in 2022, excluding WKH QDO HIIHFWV RI 3D\UROO 3URWHFWLRQ 3URJUDP loans. Commercial loan growth accelerated in the Williamsburg, Richmond, and Charlottesville markets and the contribution of our fast-growing Fredericksburg presence was also meaningful. Thomas F. Cherry President & &KLHI ([HFXWLYH 2I FHU Shareholder Letter I t is an honor and privilege to share the 2022 Annual Report for C&F Financial Corporation as we have just completed our 95th year serving the needs of our customers, communities, and our RZQ & ) WHDPPDWHV :H DUH FRQ GHQW \RX ZLOO RQFH DJDLQ VHH WKH EHQH W RI RXU VWURQJ QDQFLDO position and unique business model. The post-pandemic marketplace yielded both new opportunities and challenges in 2022 and we are, once again, very proud of the strong performance our organization delivered. The strength of C&F has always been the combination of GLYHUVL HG OLQHV RI EXVLQHVV VHO HVV WHDPZRUN DQG dedication to providing a great customer experience, in good times and bad. Each of our four subsidiaries SRVLWLYHO\ FRQWULEXWHG WR WKH RYHUDOO QDQFLDO DQG customer service success of the company, but the changing economy affected each differently. 2 Deposits, particularly those found in low-cost consumer and business checking accounts, grew by a healthy 7% in 2022. We are very pleased with this growth, given that competition is rapidly rising as liquidity in the market falls and other banks, which increasingly include neo/online institutions, raise their interest rates to attract new customers. Deposits are the lifeblood of a bank, so we will continue to be very competitive with the rates we offer while relying on our long-standing customer experience to drive both growth and retention. We continue to see robust commercial loan demand while the performance quality of the current portfolio remains very strong. Credit quality has been very good over the past few years, however, banks like ours are understandably sensitive to C&F Bank continued to make strides in accomplishing its strategic loan growth goals, with a 10% increase in total loans outstanding in 2022.
overall economic conditions, so we will maintain careful watch over our loan portfolio as headwinds increase. A highly experienced staff of relationship managers combined with attractive markets, a skilled operational team, and robust systems will continue to be our competitive advantage. C&F Finance While not immune to the changing economy and rate environment, C&F Finance delivered another solid year of production with record growth exceeding 25% in the traditional auto portfolio and 37% in the marine/RV line of business. C&F Finance now purchases loan contracts in over 20 states. Unfortunately, the increase in interest income from this loan growth was more than offset by the surge in borrowing costs driven by an increase in shortterm interest rates. This challenging scenario is further compounded by an expected decline in car sales, further increasing market competition and putting additional pressure on margins. Our transition to higher-credit-quality contract purchases over the past several years is paying dividends as we enter a more challenging economy, with past-due accounts and net charge-offs remaining below pre-pandemic levels. Challenges that could increase delinquencies and charge-offs in the future include the depletion of pandemicrelated stimulus payments and declining wholesale prices in the used car market. We will remain vigilant with credit quality at C&F Finance. C&F Mortgage Mortgage interest rates essentially doubled in 2022, cutting production across the industry to a fraction of the record volume seen in the previous two years. C&F Mortgage production declined to $700MM in 2022, after $1.5 billion in 2021 and $1.8 billion in 2020. Despite this dramatic decrease LQ SURGXFWLRQ ZH UHPDLQHG SUR WDEOH LQ Performance declines were more severe at many other mortgage companies, and consolidation is now being seen throughout the industry. C&F Finance delivered another solid year of production with record growth, now purchasing loan contracts in over 20 states. While higher interest rates present potential headwinds for the mortgage company in 2023, we believe good opportunities are still available given our competitive advantages, which include our focus on purchase-money mortgage lending, our highly skilled, long-term lenders and operations teammates, and our technology platform. However, WKH LPPHGLDWH IXWXUH ZLOO UHPDLQ GLI FXOW IRU XV DQG the entire industry as the housing market continues to adjust to developing economic conditions. Our mortgage company has been a solid part of C&F Financial Corporation for many years, and it will continue to be a strong asset to our business model in the future. C&F Wealth Management C&F Wealth Management continues to drive meaningful results despite the decline in and FRQWLQXHG YRODWLOLW\ RI QDQFLDO PDUNHWV :HDOWK PDQDJHPHQW LV FUXFLDO WR RXU GLYHUVL HG EXVLQHVV strategy because it helps us acquire, deepen, and retain valuable customer relationships. We are well positioned for the future thanks to our seasoned advisors, as well as new advisors who have joined our team, combined with the robust markets in which we are doing business as a company. Strategic Initiatives, Opportunities, and Challenges While each of our different business segments offers unique business opportunities, they also share similar strategic goals, opportunities, and challenges. 3
 • shareholder letter icon 3/10/2023 Letter Continued (Full PDF)
 • stockholder letter icon 3/8/2024 CFFI Stockholder Letter
 • stockholder letter icon 3/7/2025 CFFI Stockholder Letter
 • stockholder letter icon 3/11/2026 CFFI Stockholder Letter
 • stockholder letter icon More "Banking & Savings" Category Stockholder Letters
 • Benford's Law Stocks icon CFFI Benford's Law Stock Score = 90


CFFI 3/10/2023 Shareholder/Stockholder Letter Transcript:

20
22
An
nu
al
Re
po
rt

C&F Financial Corporation
A one-bank holding company providing a full range of banking
services to individuals and businesses through its subsidiaries:
C&F Bank
(Citizens and Farmers Bank) offers traditional and digital banking services to
individuals and businesses through 31 retail branches located in Virginia.
C&F Finance Company
Specializes in new and used indirect auto, marine and recreational vehicle
lending in select areas of the following states: Alabama, Colorado, Florida,
Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota,
Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, South
Carolina, Texas, Virginia, and West Virginia.
C&F Mortgage Corporation
Originates and sells residential mortgages throughout Virginia, West Virginia,
Maryland, North Carolina, and South Carolina.* Through its subsidiary,
&HUWL  HG $SSUDLVDOV  //&  DOVR SURYLGHV UHVLGHQWLDO DSSUDLVDO VHUYLFHV 
C&F Wealth Management Corporation
Provides a full range of securities brokerage, life and health insurance, and
investment services to individuals and businesses through C&F Bank   s 31
retail branch locations.
*Through a separate division, Lender Solutions provides mortgage operations support to
RWKHU   QDQFLDO LQVWLWXWLRQV IRU D IHH 
Visit cffc.com for full listing of locations.

Financial Performance
Consolidated net income
($ in thousands)
1.19
1.20
1.14
1.34
1.27
18,020
18,850
22,424
29,123
29,369
Return on average assets (%)
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Earnings per share     diluted ($)
12.40
12.02
12.54
14.77
14.84
5.15
5.47
6.06
7.95
8.29
Return on average equity (%)
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
2022
2.33 billion
2022
56.27
2021
2.26 billion
2021
59.32
2020
2.09 billion
2020
52.80
2019
1.66 billion
2019
48.07
2018
1.52 billion
2018
43.45
Total assets ($)
Book value per share ($)

C&F Bank
& )  %DQN  VLJQL  FDQWO\  FRQWULEXWHG  WR  RYHUDOO 
company earnings in 2022 as loan and deposit
growth remained solid along with service fee income
and debit card interchange revenue. Growing
earning assets, particularly loans, has been the
number one strategic goal over the past several
years and will continue to be in 2023 and beyond.
Loans outstanding grew by 10% in 2022, excluding
WKH    QDO  HIIHFWV  RI  3D\UROO  3URWHFWLRQ  3URJUDP 
loans. Commercial loan growth accelerated in
the Williamsburg, Richmond, and Charlottesville
markets and the contribution of our fast-growing
Fredericksburg presence was also meaningful.
Thomas F. Cherry
President &
&KLHI ([HFXWLYH 2I  FHU
Shareholder Letter
I
t is an honor and privilege to share the 2022
Annual Report for C&F Financial Corporation as
we have just completed our 95th year serving
the needs of our customers, communities, and our
RZQ  & )  WHDPPDWHV   :H  DUH  FRQ  GHQW  \RX  ZLOO 
RQFH  DJDLQ  VHH  WKH  EHQH  W  RI  RXU  VWURQJ    QDQFLDO 
position and unique business model.
The post-pandemic marketplace yielded
both new opportunities and challenges in 2022
and we are, once again, very proud of the strong
performance our organization delivered. The
strength of C&F has always been the combination of
GLYHUVL  HG OLQHV RI EXVLQHVV  VHO  HVV WHDPZRUN  DQG 
dedication to providing a great customer experience,
in good times and bad. Each of our four subsidiaries
SRVLWLYHO\  FRQWULEXWHG  WR  WKH  RYHUDOO    QDQFLDO  DQG 
customer service success of the company, but the
changing economy affected each differently.
2
Deposits, particularly those found in low-cost
consumer and business checking accounts, grew
by a healthy 7% in 2022. We are very pleased with
this growth, given that competition is rapidly rising
as liquidity in the market falls and other banks,
which increasingly include neo/online institutions,
raise their interest rates to attract new customers.
Deposits are the lifeblood of a bank, so we will
continue to be very competitive with the rates we
offer while relying on our long-standing customer
experience to drive both growth and retention.
We continue to see robust commercial loan
demand while the performance quality of the
current portfolio remains very strong. Credit quality
has been very good over the past few years, however,
banks like ours are understandably sensitive to
C&F Bank continued to
make strides in accomplishing
its strategic loan growth goals,
with a 10% increase in total
loans outstanding in 2022.

overall economic conditions, so we will maintain
careful watch over our loan portfolio as headwinds
increase. A highly experienced staff of relationship
managers combined with attractive markets, a
skilled operational team, and robust systems will
continue to be our competitive advantage.
C&F Finance
While not immune to the changing economy
and rate environment, C&F Finance delivered
another solid year of production with record growth
exceeding 25% in the traditional auto portfolio and
37% in the marine/RV line of business. C&F Finance
now purchases loan contracts in over 20 states.
Unfortunately, the increase in interest income from
this loan growth was more than offset by the surge
in borrowing costs driven by an increase in shortterm interest rates. This challenging scenario is
further compounded by an expected decline in car
sales, further increasing market competition and
putting additional pressure on margins.
Our transition to higher-credit-quality contract
purchases over the past several years is paying
dividends as we enter a more challenging economy,
with past-due accounts and net charge-offs
remaining below pre-pandemic levels. Challenges
that could increase delinquencies and charge-offs
in the future include the depletion of pandemicrelated stimulus payments and declining wholesale
prices in the used car market. We will remain
vigilant with credit quality at C&F Finance.
C&F Mortgage
Mortgage interest rates essentially doubled in
2022, cutting production across the industry to a
fraction of the record volume seen in the previous
two years. C&F Mortgage production declined to
$700MM in 2022, after $1.5 billion in 2021 and
$1.8 billion in 2020. Despite this dramatic decrease
LQ  SURGXFWLRQ   ZH  UHPDLQHG  SUR  WDEOH  LQ        
Performance declines were more severe at many
other mortgage companies, and consolidation is
now being seen throughout the industry.
C&F Finance delivered another
solid year of production
with record growth, now
purchasing loan contracts
in over 20 states.
While higher interest rates present potential
headwinds for the mortgage company in 2023, we
believe good opportunities are still available given
our competitive advantages, which include our
focus on purchase-money mortgage lending, our
highly skilled, long-term lenders and operations
teammates, and our technology platform. However,
WKH LPPHGLDWH IXWXUH ZLOO UHPDLQ GLI  FXOW IRU XV DQG 
the entire industry as the housing market continues
to adjust to developing economic conditions. Our
mortgage company has been a solid part of C&F
Financial Corporation for many years, and it will
continue to be a strong asset to our business model
in the future.
C&F Wealth Management
C&F Wealth Management continues to drive
meaningful results despite the decline in and
FRQWLQXHG  YRODWLOLW\  RI    QDQFLDO  PDUNHWV   :HDOWK 
PDQDJHPHQW LV FUXFLDO WR RXU GLYHUVL  HG EXVLQHVV 
strategy because it helps us acquire, deepen, and
retain valuable customer relationships. We are well
positioned for the future thanks to our seasoned
advisors, as well as new advisors who have joined
our team, combined with the robust markets in
which we are doing business as a company.
Strategic Initiatives, Opportunities, and Challenges
While each of our different business segments
offers unique business opportunities, they also share
similar strategic goals, opportunities, and challenges.
3


shareholder letter icon 3/10/2023 Letter Continued (Full PDF)
 

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