C&F Financial Corporation Announces Net Income for Third Quarter and First Nine Months

Community Banking Segment. The community banking segment reported net income of $5.4 million and $13.8 million for the third quarter and first nine months of 2022, respectively, compared to $4.2 million and $10.9 million, respectively for the same periods in 2021.

Community banking segment net income increased $1.3 million for the third quarter of 2022 and $2.9 million for the first nine months, compared to the same periods in 2021 due primarily to:

partially offset by:

Average loans increased $49.7 million, or 4.8 percent, for the third quarter of 2022 and increased $15.6 million, or 1.5 percent, for the first nine months of 2022, compared to the same periods in 2021. Excluding the impact of PPP loans, average loans increased $97.2 million, or 9.9 percent, for the third quarter of 2022, and increased $85.4 million, or 8.9 percent, for the first nine months of 2022, compared to the same periods in 2021. The increase in average loans outstanding for the third quarter and first nine months of 2022 compared to the same periods in 2021 resulted primarily from growth in the commercial real estate and construction segments of the loan portfolio. Average deposits increased $165.0 million, or 9.0 percent, for the third quarter of 2022 and increased $162.2 million, or 8.9 percent for the first nine months of 2022, compared to the same periods in 2021, and the mix of deposit balances shifted away from time deposits and toward lower cost savings, money market and demand deposits.

Average loan yields were lower for the third quarter and first nine months of 2022 compared to the same periods in 2021, due primarily to lower recognition of net origination fees on PPP loans and lower interest income on PCI loans, partially offset by the effects of rising interest rates during 2022. PPP loans earn interest at a note rate of one percent as well as net origination fees that were amortized over the contractual term of the related loan or accelerated into interest income upon repayment of the loan. There were no net PPP origination fees recognized in the third quarter of 2022 and $679,000 recognized during the first nine months of 2022, compared to $1.3 million and $3.4 million, respectively, for the same periods in 2021. All net PPP origination fees received by C&F Bank had been recognized in income as of June 30, 2022, totaling $6.3 million since the inception of the PPP in the second quarter of 2020. The recognition of interest income on PCI loans, which were acquired in connection with past mergers and acquisitions, is based on management’s expectation of future payments of principal and interest, which are inherently uncertain. Earlier than expected repayments of certain PCI loans resulted in the recognition of additional interest income during the third quarters and first nine months of 2022 and 2021. Interest income recognized on PCI loans was $251,000 and $364,000 for the third quarter of 2022 and 2021, respectively, and $1.3 million and $1.9 million for the first nine months of 2022 and 2021, respectively. Market interest rates have risen during the first nine months of 2022, and short-term interest rates are expected to continue to rise during the remainder of the year, which the community banking segment expects to continue to result in increases in asset yields, net interest margin and net interest income in future periods.

C&F Bank’s total nonperforming assets were $1.9 million at September 30, 2022 compared to $3.2 million at December 31, 2021. Nonperforming assets included $1.4 million in nonaccrual loans and $423,000 in OREO at September 30, 2022 and included $2.4 million in nonaccrual loans and $835,000 in OREO at December 31, 2021. The decrease in nonaccrual loans at September 30, 2022 as compared to December 31, 2021 was primarily due to the resolution of certain impaired loans during the first nine months of 2022. The community banking segment recorded no provision for loan losses for the third quarter of 2022 and recorded a net reversal of provision for loan losses of $700,000 for the first nine months of 2022, compared to no provision for loan losses recorded for the third quarter of 2021 and a reversal of provision for loan losses of $200,000 for the first nine months of 2021. At September 30, 2022, the allowance for loan losses decreased to $14.2 million, compared to $14.8 million at December 31, 2021. Decreases in the allowance for loan losses during 2022 related to the resolution of certain impaired loans and continued strong credit quality of the loan portfolio, which were partially offset by provision related to growth in the loan portfolio. Management believes that the level of the allowance for loan losses is sufficient to absorb losses inherent in the portfolio.

Mortgage Banking Segment. The mortgage banking segment reported net income of $24,000 and $1.7 million for the third quarter and first nine months of 2022, respectively, compared to net income of $2.1 million and $6.6 million, respectively for the same periods in 2021.  

The decrease in net income of the mortgage banking segment for the third quarter and first nine months of 2022 compared to the same periods in 2021 was due primarily to lower volume of mortgage loan originations and mortgage lender services, lower margins on sales of mortgage loans, and lower average balances of loans held for sale, partially offset by lower provision for indemnification reserves and lower expenses tied to mortgage loan origination volume such as salaries and employee benefits, loan processing, and data processing.

Mortgage loan originations for the mortgage banking segment were $184.3 million and $585.3 million for the third quarter and first nine months of 2022, respectively, compared to $358.3 million and $1.16 billion, respectively, for the same periods in 2021. Mortgage loan originations for the mortgage banking segment during the third quarter of 2022 for refinancings and home purchases were $18.3 million and $166.0 million, respectively, compared to $95.0 million and $263.3 million, respectively, during the third quarter of 2021. Mortgage loan originations for the mortgage banking segment during the first nine months of 2022 for refinancings and home purchases were $92.1 million and $493.2 million, respectively, compared to $438.5 million and $723.6 million, respectively, during the first nine months of 2021. Following the elevated volume levels in the mortgage industry during 2020 and 2021 that accompanied historically low mortgage interest rates and a highly active residential real estate market, the rapid rise in mortgage interest rates, combined with limited inventory of homes for sale, has led to a substantial decline in mortgage originations.

During the third quarter and first nine months of 2022, the mortgage banking segment recorded provisions for indemnification losses of $11,000 and a reversal of provisions for indemnification losses of $858,000, respectively, compared to provision for indemnification losses of $20,000 and $52,000, respectively, in the same periods of 2021. The release of indemnification reserves in the first nine months of 2022 was due primarily to improvement in the mortgage banking segment’s assessment of borrower payment performance and other factors affecting expected losses on mortgage loans sold in the secondary market. The mortgage banking segment increased reserves for indemnification losses during 2020 based on widespread forbearance on mortgage loans and economic uncertainty related to the COVID-19 pandemic. To date, the mortgage banking segment has not made any payments for indemnification losses since the onset of the COVID-19 pandemic, and management believes that the indemnification reserve is sufficient to absorb losses related to loans that have been sold in the secondary market.

Consumer Finance Segment. The consumer finance segment reported net income of $1.8 million and $6.0 million for the third quarter and first nine months of 2022, respectively, compared to net income of $2.2 million and $7.6 million, respectively for the same periods in 2021.

Net income for the consumer finance segment decreased $415,000 and $1.6 million for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021 due to margin compression resulting from lower average yields on automobile loans and increased borrowing costs on variable rate loans from the community banking segment and higher provision for loan losses, partially offset by loan growth. Provision for loan losses increased as a result of significant loan growth in 2022, partially offset by a release of reserves related to strong loan performance. Average yields on loans decreased for the third quarter and first nine months of 2022 compared to the same periods in 2021 as a result of the consumer finance segment’s pursuing growth in higher quality, lower yielding loans.

Average loans outstanding increased $114.1 million, or 33.6%, for the third quarter of 2022 compared to the same period in 2021 and increased $91.3 million, or 28.0% for the first nine months of 2022 compared to the same period in 2021. The consumer finance segment experienced net charge-offs at an annualized rate of 0.71 percent of average total loans for the third quarter of 2022, compared to net recoveries of 0.09 for the third quarter of 2021. Annualized net charge-offs for the first nine months of 2022 were 0.19 percent of average total loans, compared to net recoveries of 0.08 percent for the first nine months of 2021. The change in the net charge-off ratio for the third quarter and the first nine months of 2022 compared to the same periods in 2021 reflect a higher number of charge-offs during 2022 as government stimulus measures in response to the pandemic that benefitted borrowers had a decreased effect in 2022. Charge-offs in both years were lower than historical levels for the consumer finance segment, due to strong loan performance and a strong market for used autos, which mitigates losses on defaulted auto loans. Despite some weakening in 2022, the consumer finance segment has experienced loan performance since 2020 that has been consistently stronger than periods prior to the onset of the COVID-19 pandemic, resulting in part from the consumer finance segment continuing to purchase higher quality loans, and in part from government stimulus measures. At September 30, 2022, total delinquent loans as a percentage of total loans was 2.31 percent, compared to 2.16 percent at December 31, 2021 and 1.92 percent at September 30, 2021. The allowance for loan losses was $26.3 million at September 30, 2022, compared to $24.8 million at December 31, 2021. The allowance for loan losses as a percentage of total loans decreased to 5.64 percent at September 30, 2022 from 6.73 percent and 6.85 percent at December 31, 2021 and September 30, 2021, respectively, primarily as a result of continued strong credit quality. Management believes that the level of the allowance for loan losses is sufficient to absorb losses inherent in the portfolio. If loan performance deteriorates resulting in elevated delinquencies or net charge-offs, provision for loan losses may increase in future periods.

Capital and Dividends. The Corporation increased its quarterly cash dividend by 5 percent compared to the previous quarterly dividend, to 42 cents per share during the third quarter of 2022. This dividend, paid to shareholders on October 1, 2022 represents a payout ratio of 22.7 percent of earnings per share for the third quarter of 2022. The Board of Directors of the Corporation continually reviews the amount of cash dividends per share and the resulting dividend payout ratio in light of changes in economic conditions, current and future capital requirements, and expected future earnings.

Total consolidated equity decreased $25.6 million at September 30, 2022 compared to December 31, 2021, due primarily to unrealized losses in the market value of securities available for sale, which are recognized as a component of other comprehensive income. The Corporation’s securities available for sale are fixed income debt securities, and their decline in market value during the first nine months of 2022 was a result of rising market interest rates. The Corporation expects to recover its investments in debt securities through scheduled payments of principal and interest, and unrealized losses are not expected to affect the earnings or regulatory capital of the Corporation or the Bank.

In November 2021, the Board of Directors authorized a program, effective December 1, 2021, to repurchase up to $10.0 million of the Corporation’s common stock through November 30, 2022. During the third quarter of 2022, the Corporation repurchased 34,262 shares, or $1.7 million, of its common stock under this share repurchase program.

About C&F Financial Corporation. C&F Financial Corporation’s common stock is listed for trading on The Nasdaq Stock Market under the symbol CFFI. The common stock closed at a price of $57.30 per share on October 26, 2022. At September 30, 2022, the book value of the Corporation was $52.92 per share and the tangible book value per share was $45.20. For more information about the Corporation’s tangible book value per share, which is not calculated in accordance with GAAP, please see “Use of Certain Non-GAAP Financial Measures” and “Reconciliation of Certain Non-GAAP Financial Measures,” below.

C&F Bank operates 30 banking offices and 4 commercial loan offices located throughout eastern and central Virginia and offers full wealth management services through its subsidiary C&F Wealth Management, Inc. C&F Mortgage Corporation and its subsidiary C&F Select LLC provide mortgage loan origination services through offices located in Virginia, Maryland, North Carolina, South Carolina and West Virginia. C&F Finance Company provides automobile, marine and RV loans through indirect lending programs offered in Alabama, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia from its headquarters in Richmond, Virginia.

Additional information regarding the Corporation’s products and services, as well as access to its filings with the Securities and Exchange Commission (SEC), are available on the Corporation’s website at http://www.cffc.com.

Use of Certain Non-GAAP Financial Measures. The accounting and reporting policies of the Corporation conform to GAAP in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of the Corporation’s performance. These include return on tangible common equity (ROTCE), tangible book value per share, and the following fully-taxable equivalent (FTE) measures: interest income on loans-FTE, interest income on securities-FTE, total interest income-FTE and net interest income-FTE.

Management believes that the use of these non-GAAP measures provides meaningful information about operating performance by enhancing comparability with other financial periods, other financial institutions, and between different sources of interest income. The non-GAAP measures used by management enhance comparability by excluding the effects of balances of intangible assets, including goodwill, that vary significantly between institutions, and tax benefits that are not consistent across different opportunities for investment. These non-GAAP financial measures should not be considered an alternative to GAAP-basis financial statements, and other bank holding companies may define or calculate these or similar measures differently. A reconciliation of the non-GAAP financial measures used by the Corporation to evaluate and measure the Corporation’s performance to the most directly comparable GAAP financial measures is presented below.

Forward-Looking Statements. This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended. These forward-looking statements are based on the beliefs of the Corporation’s management, as well as assumptions made by, and information currently available to, the Corporation’s management, and reflect management’s current views with respect to certain events that could have an impact on the Corporation’s future financial performance. These statements, including without limitation statements made in Mr. Cherry’s quotes, relate to expectations concerning matters that are not historical fact, may express “belief,” “intention,” “expectation,” “potential” and similar expressions, and may use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “may,” “will,” “intend,” “should,” “could,” or similar expressions. These statements are inherently uncertain, and there can be no assurance that the underlying assumptions will prove to be accurate. Actual results could differ materially from those anticipated or implied by such statements. Forward-looking statements in this release may include, without limitation, statements regarding expected future operations and financial performance, expected future recovery of investments in debt securities, future dividend payments, strategic business initiatives and the anticipated effects thereof, rising interest rates and the effects thereof on net interest income, mortgage loan originations, technology initiatives, our diversified business strategy, asset quality, credit quality, adequacy of allowances for loan losses and the level of future charge-offs, capital levels, the effect of future market and industry trends, the effects of future interest rate fluctuations, cybersecurity risks, and inflation. Factors that could have a material adverse effect on the operations and future prospects of the Corporation include, but are not limited to, changes in: (1) interest rates, such as volatility in short-term interest rates or yields on U.S. Treasury bonds and increases or volatility in mortgage interest rates, (2) general business conditions, as well as conditions within the financial markets, (3) general economic conditions, including unemployment levels, inflation rates, supply chain disruptions and slowdowns in economic growth, and also including the economic impacts of the COVID-19 pandemic and the heightened impact it has on many of the risks described herein and in other periodic reports the Corporation files with the SEC, (4) the legislative/regulatory climate, regulatory initiatives with respect to financial institutions, products and services, the Consumer Financial Protection Bureau (CFPB) and the regulatory and enforcement activities of the CFPB, (5) monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, and the effect of these policies on interest rates and business in our markets, (6) the value of securities held in the Corporation’s investment portfolios, (7) the quality or composition of the loan portfolios and the value of the collateral securing those loans, (8) the inventory level and pricing of used automobiles, including sales prices of repossessed vehicles, (9) the level of net charge-offs on loans and the adequacy of our allowance for loan losses, (10) the level of indemnification losses related to mortgage loans sold, (11) demand for loan products, (12) deposit flows, (13) the strength of the Corporation’s counterparties, (14) competition from both banks and non-banks, including competition in the non-prime automobile finance markets, (15) demand for financial services in the Corporation’s market area, (16) reliance on third parties for key services, (17) the commercial and residential real estate markets, (18) demand for residential mortgages and conditions in the secondary residential mortgage loan markets, (19) the Corporation’s technology initiatives and other strategic initiatives, (20) the Corporation’s branch expansions and consolidations, (21) cyber threats, attacks or events, (22) expansion of C&F Bank’s product offerings, and (23) accounting principles, policies and guidelines, and elections by the Corporation thereunder. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this release. For additional information on risk factors that could affect the forward-looking statements contained herein, see the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 and other reports filed with the SEC. The Corporation undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.C&F Financial Corporation Selected Financial Information(dollars in thousands, except for per share data)(unaudited) Financial Condition 9/30/2022 12/31/2021 9/30/2021Interest-bearing deposits in other banks $82,268 $248,053 $186,494Investment securities - available for sale, at fair value 499,564 373,073 363,413Loans held for sale, at fair value 33,541 82,295 116,789Loans, net: Community Banking segment, excluding PPP loans 1,080,643 999,912 986,012PPP loans 496 17,762 31,452Mortgage Banking segment 5,732 8,826 8,896Consumer Finance segment 439,451 343,403 325,204Total assets 2,339,065 2,264,521 2,209,408Deposits 2,019,697 1,914,614 1,853,085Repurchase agreements 37,633 34,735 37,006Other borrowings 55,553 55,726 55,784Total equity 185,440 211,024 205,182 For The For The Quarter Ended Nine Months EndedResults of Operations 9/30/2022 9/30/2021 9/30/2022 9/30/2021Interest income $26,326 $23,604 $72,949 $70,546 Interest expense 1,946 1,986 5,462 6,524 Provision for loan losses: Community Banking segment - - (700) (200)Mortgage Banking segment - 30 32 90 Consumer Finance segment 1,200 400 2,070 220 Noninterest income: Gains on sales of loans 1,870 5,660 6,763 18,665 Other 4,259 6,107 11,758 20,008 Noninterest expenses: Salaries and employee benefits 12,202 13,915 34,700 45,242 Other 8,887 8,986 25,699 27,311 Income tax expense 1,675 2,227 5,144 6,950 Net income 6,545 7,827 19,063 23,082 Fully-taxable equivalent (FTE) amounts1 Interest income on loans-FTE 23,200 22,145 65,676 66,469 Interest income on securities-FTE 2,756 1,513 6,655 4,322 Total interest income-FTE 26,477 23,735 73,352 70,962 Net interest income-FTE 24,531 21,749 67,890 64,438 

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1 For more information about these non-GAAP financial measures, please see “Use of Certain Non-GAAP Financial Measures” and “Reconciliation of Certain Non-GAAP Financial Measures.” For The For The Quarter Ended Nine Months Ended Average Balances 9/30/2022 6/30/2022 9/30/2021 9/30/2022 9/30/2021 Securities $538,901 $469,546 $357,713 $472,301 $328,942 Loans held for sale 32,908 47,545 103,110 43,486 131,549 Loans: Community Banking segment, excluding PPP loans 1,082,236 1,054,228 985,079 1,050,045 964,657 PPP loans 711 3,299 48,212 4,797 74,585 Mortgage Banking segment 11,308 9,848 10,326 10,306 10,288 Consumer Finance segment 453,401 417,503 339,283 417,604 326,333 Interest-bearing deposits in other banks 105,683 215,240 184,603 191,436 158,635 Total earning assets 2,225,148 2,217,209 2,028,326 2,189,975 1,994,989 Total assets 2,336,456 2,345,567 2,178,742 2,315,220 2,146,550 Time, checking and savings deposits 1,376,407 1,383,983 1,274,640 1,365,939 1,272,639 Repurchase agreements 36,913 36,527 29,597 35,403 24,425 Other borrowings 55,585 55,645 55,815 55,646 55,803 Total interest-bearing liabilities 1,468,905 1,476,155 1,360,052 1,456,988 1,352,867 Noninterest-bearing demand deposits 631,519 630,154 568,275 616,032 547,118 Total equity 198,363 196,540 199,954 201,181 195,156 Annualized Average Yields and Rates Loans: Community Banking segment 4.20% 4.21% 4.57% 4.19% 4.55%Mortgage Banking segment 4.99 4.40 3.02 4.16 2.84 Consumer Finance segment 9.78 9.82 10.98 9.92 11.50 Time, checking and savings deposits 0.37 0.32 0.38 0.34 0.45 Net interest margin 4.37 4.12 4.25 4.15 4.31 Asset Quality 9/30/2022 12/31/2021 9/30/2021 Community Banking Loans, excluding purchased loans and PPP loans $1,053,648 $954,262 $934,484 Purchased performing loans1 39,782 56,798 60,911 Purchased credit impaired loans1 1,441 3,655 5,440 PPP loans2 496 17,762 31,452 Total loans $1,095,367 $1,032,477 $1,032,287 Nonaccrual loans $1,449 $2,359 $2,555 Other real estate owned (OREO) $423 $835 $857 Impaired loans3 $2,114 $5,058 $5,180 Allowance for loan losses (ALL) $14,228 $14,803 $14,823 Nonaccrual loans to total loans 0.13% 0.23% 0.25%ALL to total loans 1.30% 1.43% 1.44%ALL to nonaccrual loans 981.92% 627.51% 580.16%ALL to total loans, excluding purchased credit impaired loans4 1.30% 1.44% 1.44%ALL to total loans, excluding purchased loans and PPP loans 1.35% 1.55% 1.59%Annualized year-to-date net charge-offs to average loans 0.01% 0.01% 0.01% Mortgage Banking Total loans $6,122 $9,389 $9,594 Nonaccrual loans $312 $185 $186 Impaired loans $150 $150 $- ALL $390 $563 $698 Nonaccrual loans to total loans 5.10% 1.97% 1.94%ALL to total loans 6.37% 6.00% 7.28%ALL to nonaccrual loans 125.00% 304.32% 375.27%Annualized year-to-date net charge-offs to average loans -% -% -% Consumer Finance Total loans $465,713 $368,194 $349,130 Nonaccrual loans $543 $380 $198 Repossessed assets $276 $190 $196 ALL $26,262 $24,791 $23,926 Nonaccrual loans to total loans 0.12% 0.10% 0.06%ALL to total loans 5.64% 6.73% 6.85%ALL to nonaccrual loans 4,836.46% 6,523.95% 12,083.84%Annualized year-to-date net charge-offs (recoveries) to average loans 0.19% (0.14)% (0.08)%

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1 Acquired loans are tracked in two separate categories: “purchased performing” and “purchased credit impaired.” The remaining discount for purchased performing loans was $811,000 at 9/30/22, $1.1 million at 12/31/21 and $1.2 million at 9/30/21. The remaining discount for purchased credit impaired loans was $3.4 million at 9/30/22, $4.7 million at 12/31/21 and $5.1 million at 9/30/21.
2 The principal amount of outstanding PPP loans was $496,000 at 9/30/22, $18.4 million at 12/31/21 and $32.8 million at 9/30/21.
3 Impaired loans includes $1.3 million of loans on nonaccrual at 9/30/22, $2.2 million of loans on nonaccrual at 12/31/21 and $2.4 million of loans on nonaccrual at 9/30/21. Impaired loans also includes $2.1 million, $2.7 million and $194,000 of TDRs at 9/30/22, 12/31/21, and 9/30/21 respectively.
4 The ratio of ALL to total loans, excluding purchased credit impaired loans, includes purchased performing loans and loans originated under the PPP for which no allowance for loan losses is required. For The For The Quarter Ended Nine Months Ended Other Performance Data 9/30/2022 9/30/2021 9/30/2022 9/30/2021 Net Income (Loss): Community Banking $5,421 $4,166 $13,754 $10,884 Mortgage Banking 24 2,108 1,672 6,621 Consumer Finance 1,779 2,194 6,036 7,596 Other1 (679) (641) (2,399) (2,019)Total $6,545 $7,827 $19,063 $23,082 Net income attributable to C&F Financial Corporation $6,480 $7,674 $18,851 $22,743 Earnings per share - basic and diluted $1.85 $2.16 $5.34 $6.27 Weighted average shares outstanding - basic and diluted 3,511,326 3,550,001 3,531,064 3,626,083 Annualized return on average assets 1.12% 1.44% 1.10% 1.43%Annualized return on average equity 13.20% 15.66% 12.63% 15.77%Annualized return on average tangible common equity2 15.35% 18.02% 14.67% 18.35%Dividends declared per share $0.42 $0.40 $1.22 $1.18 Mortgage loan originations - Mortgage Banking $184,282 $358,251 $585,258 $1,162,062 Mortgage loans sold - Mortgage Banking 193,838 360,170 632,131 1,255,907 

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1 Includes results of the holding company that are not allocated to the business segments and elimination of inter-segment activity.
2 For more information about these non-GAAP financial measures, please see “Use of Certain Non-GAAP Financial Measures” and “Reconciliation of Certain Non-GAAP Financial Measures.”Market Ratios 9/30/2022 12/31/2021Market value per share $53.50 $51.19Book value per share $52.92 $59.32Price to book value ratio 1.01 0.86Tangible book value per share1 $45.20 $51.66Price to tangible book value ratio1 1.18 0.99Price to earnings ratio (ttm) 7.63 6.44

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1 For more information about these non-GAAP financial measures, please see “Use of Certain Non-GAAP Financial Measures” and “Reconciliation of Certain Non-GAAP Financial Measures.” Minimum CapitalCapital Ratios 9/30/2022 12/31/2021 Requirements3C&F Financial Corporation1 Total risk-based capital ratio 15.4% 15.8% 8.0%Tier 1 risk-based capital ratio 12.8% 13.0% 6.0%Common equity tier 1 capital ratio 11.4% 11.5% 4.5%Tier 1 leverage ratio 9.6% 9.7% 4.0% C&F Bank2 Total risk-based capital ratio 14.2% 14.5% 8.0%Tier 1 risk-based capital ratio 12.9% 13.3% 6.0%Common equity tier 1 capital ratio 12.9% 13.3% 4.5%Tier 1 leverage ratio 9.7% 9.8% 4.0%

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1 The Corporation, a small bank holding company under applicable regulations and guidance, is not subject to the minimum regulatory capital regulations for bank holding companies. The regulatory requirements that apply to bank holding companies that are subject to regulatory capital requirements are presented above, along with the Corporation’s capital ratios as determined under those regulations.
2 All ratios at September 30, 2022 are estimates and subject to change pending regulatory filings. All ratios at December 31, 2021 are presented as filed.
3 The ratios presented for minimum capital requirements are those to be considered adequately capitalized. For The Quarter Ended For The Nine Months Ended 9/30/2022 9/30/2021 9/30/2022 9/30/2021Reconciliation of Certain Non-GAAP Financial Measures Return on Average Tangible Common Equity Average total equity, as reported $198,363 $199,954 $201,181 $195,156 Average goodwill (25,191) (25,191) (25,191) (25,191)Average other intangible assets (1,781) (2,092) (1,857) (2,166)Average noncontrolling interest (525) (564) (769) (839)Average tangible common equity $170,866 $172,107 $173,364 $166,960 Net income $6,545 $7,827 $19,063 $23,082 Amortization of intangibles 75 79 224 236 Net income attributable to noncontrolling interest (65) (153) (212) (339)Net income attributable to C&F Financial Corporation $6,555 $7,753 $19,075 $22,979 Annualized return on average tangible common equity 15.35% 18.02% 14.67% 18.35% Fully Taxable Equivalent Net Interest Income1 Interest income on loans $23,159 $22,120 $65,566 $66,399 FTE adjustment 41 25 110 70 FTE interest income on loans $23,200 $22,145 $65,676 $66,469 Interest income on securities $2,646 $1,407 $6,362 $3,976 FTE adjustment 110 106 293 346 FTE interest income on securities $2,756 $1,513 $6,655 $4,322 Total interest income $26,326 $23,604 $72,949 $70,546 FTE adjustment 151 131 403 416 FTE interest income $26,477 $23,735 $73,352 $70,962 Net interest income $24,380 $21,618 $67,487 $64,022 FTE adjustment 151 131 403 416 FTE net interest income $24,531 $21,749 $67,890 $64,438 

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1 Assuming a tax rate of 21%.

September 30, December 31, 2022 2021 Tangible Book Value Per Share Equity attributable to C&F Financial Corporation $184,767 $210,318 Goodwill (25,191) (25,191)Other intangible assets (1,753) (1,977)Tangible equity attributable to C&F Financial Corporation $157,823 $183,150 Shares outstanding 3,491,184 3,545,554 Book value per share $52.92 $59.32 Tangible book value per share $45.20 $51.66 Contact:Jason Long, CFO and Secretary (804) 843-2360