C&F Financial Corp Reports Mixed Results Amid Banking Challenges
Net Income: C&F Financial Corp reported a consolidated net income of $23.7 million for 2023, down from $29.4 million in 2022.
Earnings Per Share: Earnings per share were $6.92 for 2023, compared to $8.29 in 2022.
Return on Assets and Equity: Return on average assets was 0.99% and return on average equity was 11.68% for 2023.
Community Banking Segment: This segment reported net income of $22.9 million for 2023, showing resilience despite industry challenges.
Mortgage Banking Segment: The segment faced a net loss of $103,000 in Q4 2023, but overall net income for the year was $465,000.
Consumer Finance Segment: Reported net income of $618,000 for Q4 and $2.9 million for the year, reflecting a decrease from 2022 figures.
Liquidity and Capital: The company maintains a strong liquidity position with liquid assets and borrowing availability exceeding uninsured deposits by $429.7 million as of December 31, 2023.
On January 24, 2024, C&F Financial Corp (NASDAQ:CFFI) released its 8-K filing, announcing its financial results for the year ended December 31, 2023. The American bank holding company, which operates through its subsidiaries offering banking and financial services to individuals and businesses, faced a challenging year marked by liquidity pressures, inflation, and a difficult interest rate environment.
Financial Performance Overview
The company reported a decrease in consolidated net income to $23.7 million for 2023, down from $29.4 million in the previous year. This decline was partly due to the absence of certain one-time benefits realized in 2022, such as real estate disposal activity and a change in accounting policy. When adjusted for these factors, net income still showed a decrease from $27.0 million in 2022 to $23.7 million in 2023. Basic and diluted earnings per share followed this downward trend, dropping from $8.29 in 2022 to $6.92 in 2023.
Despite the overall decline in net income, C&F Financial Corp's community banking segment remained a bright spot, reporting net income of $22.9 million for the year. This performance underscores the segment's resilience and the company's ability to grow earning assets and deposits in a tough year for the banking industry.
Segment Performance and Challenges
The mortgage banking segment reported a net loss of $103,000 for the fourth quarter of 2023, although it managed to achieve net income of $465,000 for the full year. This segment's performance reflects the broader industry trend of declining mortgage loan originations due to rising interest rates and higher home prices.
The consumer finance segment also faced headwinds, with net income decreasing to $618,000 for the fourth quarter and $2.9 million for the year. This decline was attributed to an increase in delinquent loans and challenges in repossessing automobiles, among other factors.
Liquidity, Capital, and Dividends
C&F Financial Corp maintained a strong liquidity position, with liquid assets and borrowing availability totaling $429.7 million more than uninsured deposits as of the end of 2023. The company declared cash dividends during the year totaling $1.76 per share, reflecting a payout ratio of 25.4 percent of earnings per share for the year.
Total consolidated equity increased by $20.9 million compared to the previous year, primarily due to net income and lower unrealized losses on securities available for sale. The company also continued its share repurchase program, buying back $1.1 million of its common stock in the fourth quarter of 2023.
Looking Ahead
Tom Cherry, President and CEO, expressed optimism about the future despite the past year's challenges. He highlighted the profitability of all business segments and the potential for growth in 2024 and beyond. The company's focus on managing liquidity and capital, along with its diversified business strategy, positions it to navigate the uncertainties of the economic environment.
For detailed financial tables and further information on C&F Financial Corp's performance, readers are encouraged to view the full 8-K filing.
Investors and stakeholders can find additional information about C&F Financial Corp, including its services and SEC filings, on the company's website at www.cffc.com.
Explore the complete 8-K earnings release (here) from C&F Financial Corp for further details.
This article first appeared on GuruFocus.
