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What changed in C & F FINANCIAL CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of C & F FINANCIAL CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+416 added−416 removedSource: 10-K (2026-03-03) vs 10-K (2025-02-27)

Top changes in C & F FINANCIAL CORP's 2025 10-K

416 paragraphs added · 416 removed · 318 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

63 edited+17 added−37 removed114 unchanged
Biggest changeThe CFPB supervises and regulates providers of consumer financial products and services, and has rulemaking authority in connection with numerous federal consumer financial protection laws (for example, but not limited to, the Truth-in-Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), the Electronic Funds Transfer Act (EFTA), the Equal Credit Opportunity Act (ECOA), the Home Ownership and Equity Protection Act (HOEPA), the Fair Credit and Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA) and the Home Mortgage Disclosure Act (HMDA)). ​ Because the Corporation and the Bank are smaller institutions (i.e., with assets of $10 billion or less), most consumer protection aspects of the Dodd-Frank Act will continue to be applied to the Corporation by the Federal Reserve Board and to the Bank by the FDIC.
Biggest changeThese laws include, but are not limited to, the Truth-in-Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), the Electronic Funds Transfer Act (EFTA), the Equal Credit Opportunity Act (ECOA), the Home Ownership and Equity Protection Act (HOEPA), the Fair Credit and Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA), the Home Mortgage Disclosure Act (HMDA), and the Dodd-Frank Act, and their respective state law counterparts.
Consequently, the growth and earnings performance of the Corporation and the Bank can be affected not only by management’s decisions and general economic conditions, but also by the statutes administered by, and the regulations and policies of, various governmental regulatory authorities including, but not limited to, the Virginia State Corporation Commission Bureau of Financial Institutions (VBFI), the Federal Deposit Insurance Corporation (the FDIC), the Board of Governors of the Federal Reserve System (the Federal Reserve Board), the Internal Revenue Service, federal and state taxing authorities, and the Securities and Exchange Commission (the SEC). ​ The following summary briefly describes significant provisions of currently applicable federal and state laws and certain regulations and the potential impact of such provisions.
Consequently, the growth, financial condition and earnings performance of the Corporation and the Bank can be affected not only by management’s decisions and general economic conditions, but also by the statutes administered by, and the regulations and policies of, various governmental regulatory authorities including, but not limited to, the Virginia State Corporation Commission Bureau of Financial Institutions (VBFI), the Federal Deposit Insurance Corporation (the FDIC), the Board of Governors of the Federal Reserve System (the Federal Reserve Board), the Internal Revenue Service, federal and state taxing authorities, and the Securities and Exchange Commission (the SEC). ​ The following summary briefly describes significant provisions of currently applicable federal and state laws and certain regulations and the potential impact of such provisions.
In June 2019, consistent with the provisions of the EGRRCPA, the federal banking agencies issued a final rule to permit insured depository institutions with total assets of less than $5 billion that do not engage in certain complex or international activities to file the most streamlined version of the quarterly call report, and to reduce data reportable on certain streamlined call report submissions. ​ In December 2018, consistent with the provisions of the EGRRCPA, the federal banking agencies jointly adopted final rules that permit banks with up to $3 billion in total assets, that received a composite CAMELS rating of “1” or “2,” and that meet certain other criteria (including not having undergone any change in control during the previous 12-month period, and not being subject to a formal enforcement proceeding or order), to qualify for an 18-month on-site examination cycle. ​ Effect of Governmental Monetary Policies.
In June 2019, consistent with the provisions of the EGRRCPA, the federal banking agencies issued a final rule to permit insured depository institutions with total assets of less than $5 billion that do not engage in certain complex or international activities to file the most streamlined version of the quarterly call report, and to reduce data reportable on certain streamlined call report submissions. ​ In December 2018, consistent with the provisions of the EGRRCPA, the federal banking agencies jointly adopted final rules that permit banks with up to $3 billion in total assets, that received a composite CAMELS rating of “1” or “2,” and that meet certain other criteria (including not having undergone any change in control during the previous 12-month period, and not being subject to a formal enforcement proceeding or order), to qualify for an 18-month on-site examination cycle. ​ 18 Table of Contents Effect of Governmental Monetary Policies.
The Bank also offers ATMs, internet and mobile banking, peer-to-peer payment capabilities and debit cards, as well as safe deposit box rentals, notary public, electronic transfer and other customary bank services to its customers. C&F Bank manages its commercial lending portfolio primarily through commercial lending offices located in Charlottesville, Fredericksburg, Richmond and Williamsburg, Virginia.
The Bank also offers ATMs, internet and mobile banking, peer-to-peer payment capabilities and debit cards, as well as safe deposit box rentals, notary public, electronic transfer and other customary bank services to its customers. C&F Bank manages its commercial lending portfolio primarily through commercial lending offices located in Charlottesville, Fredericksburg, Richmond, Roanoke, and Williamsburg, Virginia.
Fluctuations in the Federal Reserve Board’s monetary policies have had a significant impact on the operating results of the Corporation and the Bank and are expected to continue to do so in the future. ​ Future Regulation ​ From time to time, various legislative and regulatory initiatives are introduced in Congress and state legislatures, as well as by regulatory agencies.
Fluctuations in the Federal Reserve Board’s monetary policies have had a significant impact on the operating results of the Corporation and the Bank in the past and are expected to continue to do so in the future. ​ Future Regulation ​ From time to time, various legislative and regulatory initiatives are introduced in Congress and state legislatures, as well as by regulatory agencies.
Each regulatory capital classification is subject to certain adjustments and limitations, as implemented by the Basel III Final Rules. The Basel III Final Rules also establish risk weightings that are applied to many classes of assets held by community banks, importantly including applying higher risk weightings to certain commercial real estate loans.
Each regulatory capital classification is subject to certain adjustments and limitations, as implemented by the Basel III Final Rules. The Basel III Final Rules also establish risk weightings that are applied to many classes of assets held by community banks, importantly including applying higher risk weightings to certain commercial real estate (CRE) loans.
The Dodd-Frank Act requires the federal banking agencies and the SEC to establish joint regulations or guidelines prohibiting incentive-based payment arrangements at specified regulated entities with at least $1 billion in total consolidated assets, that encourage inappropriate risks by providing an executive officer, employee, director, or principal stockholder with excessive compensation, fees, or benefits that could lead to material financial loss to the entity. ​ In 2016, the SEC and the federal banking agencies proposed rules that prohibit covered financial institutions (including bank holding companies and banks) from establishing or maintaining incentive-based compensation arrangements that encourage inappropriate risk taking by providing covered persons (consisting of senior executive officers and significant risk takers, as defined in the rules) with excessive compensation, fees or benefits that could lead to material financial loss to the financial institution.
The Dodd-Frank Act requires the federal banking agencies and the SEC to establish joint regulations or guidelines prohibiting incentive-based payment arrangements at specified regulated entities with at least $1 billion in total consolidated assets, that encourage inappropriate risks by providing an executive officer, employee, director, or principal stockholder with excessive compensation, fees, or benefits that could lead to material financial loss to the entity. ​ In 2016, the SEC and the federal banking agencies proposed rules that prohibit covered financial institutions (including bank holding companies and banks) from establishing or maintaining incentive-based compensation 16 Table of Contents arrangements that encourage inappropriate risk taking by providing covered persons (consisting of senior executive officers and significant risk takers, as defined in the rules) with excessive compensation, fees or benefits that could lead to material financial loss to the financial institution.
To 8 Table of Contents establish C&F Finance as one of the principal financing sources for the dealers it serves, we compete predominantly by providing a high level of dealer service, building strong dealer relationships, offering flexible loan terms and quickly funding loans purchased from dealers. ​ No material part of C&F Finance’s business is dependent upon any single dealer relationship, and the loss of any single dealer relationship would not have a materially adverse effect upon C&F Finance’s business. ​ Regulation and Supervision ​ General ​ Bank holding companies, banks and their affiliates are extensively regulated under both federal and state law.
To establish C&F Finance as one of the principal financing sources for the dealers it serves, we compete predominantly by providing a high level of dealer service, building strong dealer relationships, offering flexible loan terms and quickly funding loans purchased from dealers. ​ No material part of C&F Finance’s business is dependent upon any single dealer relationship, and the loss of any single dealer relationship would not have a materially adverse effect upon C&F Finance’s business. ​ Regulation and Supervision ​ General ​ Bank holding companies, banks and their affiliates are extensively regulated under both federal and state law.
In connection with making mortgage loans, the Bank is subject to rules and regulations that, among other things, establish standards for loan origination, prohibit discrimination, provide for 15 Table of Contents inspections and appraisals of property, require credit reports on prospective borrowers, in some cases restrict certain loan features and fix maximum interest rates and fees, require the disclosure of certain basic information to mortgagors concerning credit and settlement costs, limit payment for settlement services to the reasonable value of the services rendered and require the maintenance and disclosure of information regarding the disposition of mortgage applications based on race, gender, geographical distribution and income level.
In connection with making mortgage loans, the Bank is subject to rules and regulations that, among other things, establish standards for loan origination, prohibit discrimination, provide for inspections and appraisals of property, require credit reports on prospective borrowers, in some cases restrict certain loan features and fix maximum interest rates and fees, require the disclosure of certain basic information to mortgagors concerning credit and settlement costs, limit payment for settlement services to the reasonable value of the services rendered and require the maintenance and disclosure of information regarding the disposition of mortgage applications based on race, gender, geographical distribution and income level.
Because C&F Finance serves customers with higher credit risk, C&F Finance typically charges interest at higher rates than those charged by traditional financing sources.
Because C&F Finance serves some customers with higher credit risk, C&F Finance typically charges interest at higher rates than those charged by traditional financing sources.
An insured depository institution which is less than adequately capitalized must adopt an acceptable capital restoration plan, is subject to increased regulatory oversight and is increasingly restricted in the scope of its permissible activities. As of December 31, 2024, the Bank was considered “well capitalized.” ​ Incentive Compensation.
An insured depository institution which is less than adequately capitalized must adopt an acceptable capital restoration plan, is subject to increased regulatory oversight and is increasingly restricted in the scope of its permissible activities. As of December 31, 2025, the Bank was considered “well capitalized.” ​ Incentive Compensation.
Among the advantages such large banks have are their ability to finance wide-ranging advertising campaigns, to make larger investments in technological advancements and new products and services, to maximize efficiencies through economies of scale and, by virtue of their greater total capitalization, to have substantially higher lending limits than the Bank. ​ Factors such as interest rates offered, the number and location of branches, digital services and the types of products offered, as well as the reputation of the institution, affect competition for deposits and loans.
Among the advantages such large banks have are their ability to finance wide-ranging advertising campaigns, to make larger investments in technological advancements and new products and services, to maximize efficiencies through economies of scale and, by virtue of their greater total capitalization, to have substantially higher lending limits than the Bank. ​ 7 Table of Contents Factors such as interest rates offered, the number and location of branches, digital services and the types of products offered, as well as the reputation of the institution, affect competition for deposits and loans.
At December 31, 2024, 28 percent of our employees have been employed by the Corporation or its subsidiaries for at least 15 years. ​ Competition ​ Community Banking ​ In the Bank’s market area, we compete with large national and regional financial institutions, savings associations and other independent community banks, as well as credit unions, mutual funds, brokerage firms, insurance companies and other lending and deposit platforms offered by non-bank financial technology firms, including those that only operate digitally.
At December 31, 2025, 23 percent of our employees have been employed by the Corporation or its subsidiaries for at least 15 years. ​ Competition ​ Community Banking ​ In the Bank’s market area, we compete with large national and regional financial institutions, savings associations and other independent community banks, as well as credit unions, mutual funds, brokerage firms, insurance companies and other lending and deposit platforms offered by non-bank financial technology firms, including those that only operate digitally.
For the purposes of these capital rules, (i) common equity tier 1 capital (CET1) consists principally of common stock (including surplus) and retained earnings; (ii) Tier 1 capital consists principally of CET1 plus non-cumulative preferred stock and related surplus, and certain grandfathered cumulative preferred stocks and trust preferred securities; and (iii) Tier 2 capital consists of other capital instruments, principally qualifying subordinated debt and preferred stock, and limited amounts of an institution’s allowance for credit losses.
For the purposes of these capital rules, (i) common equity tier 1 capital (CET1) consists principally of common stock (including surplus) and retained earnings; (ii) Tier 1 capital consists principally of CET1 plus non-cumulative preferred stock and related surplus, and certain grandfathered cumulative preferred stocks and trust 10 Table of Contents preferred securities; and (iii) Tier 2 capital consists of other capital instruments, principally qualifying subordinated debt and preferred stock, and limited amounts of an institution’s allowance for credit losses.
The various laws and regulations issued and administered by the regulatory agencies (including the CFPB) affect corporate practices, such as the payment of dividends, the incurrence of debt and the acquisition of financial institutions and other companies, and affect business practices and operations, such as the payment of interest on deposits, the charging of interest on loans, the types of business conducted, the products and terms offered to customers and the location of offices.
The various laws and regulations issued and administered by the regulatory agencies (including the CFPB) affect corporate practices, such as the payment of dividends, the incurrence of debt and the acquisition of financial institutions and other companies, and affect business practices and operations, such as the payment of interest on deposits, the charging 12 Table of Contents of interest on loans, the types of business conducted, the products and terms offered to customers and the location of offices.
To continue to operate profitably, lenders must have a high level of operational and risk management skills and access to competitive costs of funds. ​ Providers of automobile financing traditionally have competed on the basis of interest rates charged, the quality of credit accepted, the flexibility of loan terms offered and the quality of service provided to dealers and customers.
To continue to 8 Table of Contents operate profitably, lenders must have a high level of operational and risk management skills and access to competitive costs of funds. ​ Providers of automobile financing traditionally have competed on the basis of interest rates charged, the quality of credit accepted, the flexibility of loan terms offered and the quality of service provided to dealers and customers.
An institution's assessment rate is based on a 12 Table of Contents statistical analysis of financial ratios that estimates the likelihood of failure over a three-year period, which considers the institution’s weighted average CAMELS composite rating, and is subject to further adjustments including those related to levels of unsecured debt and brokered deposits.
An institution's assessment rate is based on a statistical analysis of financial ratios that estimates the likelihood of failure over a three-year period, which considers the institution’s weighted average CAMELS composite rating, and is subject to further adjustments including those related to levels of unsecured debt and brokered deposits.
The EGRRCPA, and final rules adopted to implement the EGRRCPA, exempt all 19 Table of Contents banks with less than $10 billion in assets (including their holding companies and affiliates) from the Volcker Rule, provided that the institution has total trading assets and liabilities of 5 percent or less of total assets, subject to certain limited exceptions.
The EGRRCPA, and final rules adopted to implement the EGRRCPA, exempt all banks with less than $10 billion in assets (including their holding companies and affiliates) from the Volcker Rule, provided that the institution has total trading assets and liabilities of 5 percent or less of total assets, subject to certain limited exceptions.
We compete by emphasizing customer service, establishing long-term customer relationships, building customer loyalty and providing traditional and digital products and services to address the specific needs of our customers. Our relationships with customers depend on, 7 Table of Contents among other things, our ability to attract and retain talented community bankers.
We compete by emphasizing customer service, establishing long-term customer relationships, building customer loyalty and providing traditional and digital products and services to address the specific needs of our customers. Our relationships with customers depend on, among other things, our ability to attract and retain talented community bankers.
C&F Wealth Management, which was organized 5 Table of Contents in April 1995, is a full-service brokerage firm offering a comprehensive range of wealth management services and insurance products through third-party service providers primarily at C&F Bank branch locations.
C&F Wealth Management, which was organized in 5 Table of Contents April 1995, is a full-service brokerage firm offering a comprehensive range of wealth management services through third-party service providers primarily at C&F Bank branch locations.
Certain provisions of Regulation Z require mortgage lenders to make a reasonable and good faith determination, based on verified and documented information, that a consumer applying for a mortgage loan has a reasonable ability to repay the loan according to its terms.
Certain provisions of Regulation Z require mortgage lenders to make a reasonable and good faith determination, based on verified 14 Table of Contents and documented information, that a consumer applying for a mortgage loan has a reasonable ability to repay the loan according to its terms.
We have created career paths for specific positions that are designed to encourage an employee’s advancement and growth within our organization, and we aim to provide employees with the skills and opportunities they need to achieve their career goals and become leaders in our businesses. ​ At December 31, 2024, we employed 545 total employees.
We have created career paths for specific positions that are designed to encourage an employee’s advancement and growth within our organization, and we aim to provide employees with the skills and opportunities they need to achieve their career goals and become leaders in our businesses. ​ At December 31, 2025, we employed 575 total employees.
Community banking revenues and operations are not materially affected by seasonal factors; however, municipal deposits tend to increase with tax collections primarily in the fourth quarter of each year and decline with spending thereafter. At December 31, 2024, assets of the community banking segment totaled $2.4 billion.
Community banking revenues and operations are not materially affected by seasonal factors; however, municipal deposits tend to increase with tax collections primarily in the fourth quarter of each year and decline with spending thereafter. At December 31, 2025, assets of the community banking segment totaled $2.7 billion.
Based on existing regulatory guidance, the Corporation and the Bank will be expected to consider the institution’s interest rate risk management, commercial real estate loan concentrations and other credit-related information, and funding and liquidity management during this analysis of adverse market conditions or outcomes. ​ Volcker Rule.
Based on existing regulatory guidance, the Corporation and the Bank will be expected to consider the institution’s interest rate risk management, CRE loan concentrations and other credit-related information, and funding and liquidity management during this analysis of adverse market conditions or outcomes. ​ Volcker Rule.
Copies of documents also can be obtained free of charge by writing to the Corporation’s secretary at 3600 La Grange Parkway, Toano, VA 23168 or by calling 804-843-2360. ​ ​ ​ 20 Table of Contents
Copies of documents also can be obtained free of charge by writing to the Corporation’s secretary at 3600 La Grange Parkway, Toano, VA 23168 or by calling 804-843-2360. ​
The Federal Reserve Board and the FDIC have adopted rules to implement the Basel III capital framework as outlined by the Basel Committee on Banking Supervision and standards for calculating risk- 10 Table of Contents weighted assets and risk-based capital measurements (collectively, the Basel III Final Rules) that apply to banking institutions they supervise.
The Federal Reserve Board and the FDIC have adopted rules to implement the Basel III capital framework as outlined by the Basel Committee on Banking Supervision and standards for calculating risk-weighted assets and risk-based capital measurements (collectively, the Basel III Final Rules) that apply to banking institutions they supervise.
The Federal Reserve Board may, in its discretion, exclude any bank holding company from the application of the Small Bank Holding Company Policy Statement if such action is warranted for supervisory purposes. ​ In August 2018, the Federal Reserve Board issued an interim final rule to apply the Small Bank Holding Company Policy Statement to bank holding companies with consolidated total assets of less than $3 billion.
The Federal Reserve Board may, in its discretion, exclude any bank holding company from the application of the Small Bank Holding Company Policy Statement if such action is warranted for supervisory purposes. ​ 11 Table of Contents In August 2018, the Federal Reserve Board issued an interim final rule to apply the Small Bank Holding Company Policy Statement to bank holding companies with consolidated total assets of less than $3 billion, such as the Corporation.
As of December 31, 2024, the Corporation and C&F Finance were not subject to supervision by the CFPB. ​ Certain federal regulatory agencies, and in particular, the CFPB, the Federal Trade Commission, and the Federal Reserve Board, as well as certain state agencies, have recently become more active in investigating the products, services and operations of banks and other finance companies engaged in auto finance activities.
As of December 31, 2025, the Corporation and C&F Finance were not subject to supervision by the CFPB. ​ 15 Table of Contents Certain federal regulatory agencies, and in particular, the CFPB, the Federal Trade Commission, and the Federal Reserve Board, as well as certain state agencies, have recently become more active in investigating the products, services and operations of banks and other finance companies engaged in auto finance activities.
C&F Bank provides community banking services at its main office in West Point, Virginia, and through its branch network of over 30 branches located in eastern and central Virginia.
C&F Bank provides community banking services at its main office in West Point, Virginia, and through its branch network of over 30 branches located throughout Virginia.
See “Risks Related to the Regulation of the Corporation” below in Item 1A of Part I of Annual Report on Form 10-K for further discussion. ​ Regulatory Environment ​ Banking and other financial services statutes, regulations and policies are continually under review by the U.S. Congress, state legislatures and federal and state regulatory agencies.
See “Risks Related to the Regulation of the Corporation” below in Item 1A of Part I of Annual Report on Form 10-K for further discussion. ​ Regulatory Environment ​ Banking and other financial services statutes, regulations and policies are continually under review by the U.S.
Increased competition has come from out-of-state banks through their acquisition of Virginia-based banks and interstate branching, and expansion of community and regional banks into our service areas. ​ The banking business in Virginia, and specifically in the Bank’s primary service areas of eastern and central Virginia, is highly competitive for both loans and deposits, and is dominated by a relatively small number of large banks with many offices operating over a wide geographic area.
Increased competition has come from out-of-state banks through their acquisition of Virginia-based banks and interstate branching, and expansion of community and regional banks into our service areas. ​ The banking business in Virginia is highly competitive for both loans and deposits, is dominated by a relatively small number of large banks with many offices operating over a wide geographic area and is constantly evolving.
As of December 31, 2024, the Bank has not elected to apply the CBLRF, 11 Table of Contents but the Bank continues to assess the potential impact of opting in to CBLRF as part of its ongoing capital management and planning processes. ​ Small Bank Holding Company.
As of December 31, 2025, the Bank has not elected to apply the CBLRF, but the Bank continues to assess the potential impact of opting in to CBLRF as part of its ongoing capital management and planning processes. ​ Small Bank Holding Company.
C&F Finance also generally adheres to the principles of the 16 Table of Contents FDCPA, which prohibits certain debt collectors from contacting borrowers during certain times and at certain places, from using threatening practices and from making false implications when attempting to collect a debt. ​ The CFPB has the authority to issue and enforce regulations under many federal consumer protection laws, including (subject to certain statutory limitations) TILA, ECOA, FDCPA, FCRA and EFTA.
C&F Finance also generally adheres to the principles of the FDCPA, which prohibits certain debt collectors from contacting borrowers during certain times and at certain places, from using threatening practices and from making false implications when attempting to collect a debt. ​ The CFPB has the authority to issue and enforce regulations under many federal consumer protection laws, including (subject to certain statutory limitations) TILA, ECOA, FDCPA, FCRA, EFTA and the prohibition on unfair, deceptive and abusive acts and practices.
For the year ended December 31, 2024, net income for this segment totaled $20.3 million. ​ Mortgage Banking ​ We conduct mortgage banking activities through C&F Mortgage, which was organized in September 1995, and its 51%-owned subsidiary, C&F Select LLC, which was organized in January 2019.
For the year ended December 31, 2025, net income for this segment totaled $27.2 million. ​ Mortgage Banking ​ We conduct mortgage banking activities through C&F Mortgage, which was organized in September 1995, and its 51%-owned subsidiary, C&F Select LLC, which was organized in January 2019.
However, seasonal trends may be disrupted by cyclical and other economic factors that affect the residential real estate market. At December 31, 2024, assets of the mortgage banking segment totaled $29.8 million. For the year ended December 31, 2024, net income for this segment totaled $1.1 million. ​ Consumer Finance ​ We conduct consumer finance activities through C&F Finance.
However, seasonal trends may be disrupted by cyclical and other economic factors that affect the residential real estate market. At December 31, 2025, assets of the mortgage banking segment totaled $51.3 million. For the year ended December 31, 2025, net income for this segment totaled $2.3 million. ​ Consumer Finance ​ We conduct consumer finance activities through C&F Finance.
Further, a change in the manner in which laws, regulations and regulatory guidance are interpreted by regulatory agencies or courts may have a material impact on our business, operations and earnings. ​ Regulation of the Corporation ​ As a bank holding company, the Corporation is subject to the Bank Holding Company Act of 1956 (the BHCA) and regulation and supervision by the Federal Reserve Board.
A change in applicable laws, regulations or regulatory guidance, in the manner in which laws, regulations and regulatory guidance are interpreted by regulatory agencies or courts, or in the supervisory environment generally, may have a material impact on our business, operations and earnings. ​ 9 Table of Contents Regulation of the Corporation ​ As a bank holding company, the Corporation is subject to the Bank Holding Company Act of 1956 (the BHCA) and regulation and supervision by the Federal Reserve Board.
C&F Finance is a regional finance company purchasing automobile, marine and recreational vehicle (RV) loans primarily in the Mid-Atlantic, Midwest and Southern United States.
C&F Finance is a regional finance company purchasing automobile loans primarily in the Mid-Atlantic, Midwest and Southern United States.
We cannot currently predict the nature and timing of future developments related to the Corporate Transparency Act. ​ Cybersecurity. The federal banking agencies have adopted guidelines for establishing information security standards and cybersecurity programs for implementing safeguards under the supervision of a financial institution’s board of directors.
We cannot currently predict the nature and timing of future developments related to the CTA. 17 Table of Contents Cybersecurity. The federal banking agencies have adopted guidelines for establishing information security standards and cybersecurity programs for implementing safeguards under the supervision of a financial institution’s board of directors.
Each FHLB makes loans to members in accordance with policies and procedures established by the Board of Directors of the FHLB. As a member, the Bank must purchase and maintain stock in the FHLB. At December 31, 2024, the Bank owned $3.6 million of FHLB stock. ​ Consumer Protection.
Each FHLB makes loans to members in accordance with policies and procedures established by the Board of Directors of the FHLB. As a member, the Bank must purchase and maintain stock in the FHLB. At December 31, 2025, the Bank owned $3.7 million of FHLB stock. ​ 13 Table of Contents Consumer Protection.
At December 31, 2024, assets of the consumer finance segment totaled $472.7 million. For the year ended December 31, 2024, net income for this segment totaled $1.4 million. ​ Human Capital Resources ​ The Corporation and its subsidiaries foster a culture of respect, teamwork, ownership, responsibility, initiative, integrity, and service.
At December 31, 2025, assets of the consumer finance segment totaled $469.9 million. For the year ended December 31, 2025, net income for this segment totaled $1.2 million. ​ Human Capital Resources ​ The Corporation and its subsidiaries foster a culture of respect, teamwork, ownership, responsibility, initiative, integrity, and service.
These contracts are also purchased on an indirect basis through a referral program administered by a third party and are for prime loans made to individuals with higher credit scores and therefore typically priced at rates 6 Table of Contents lower than C&F Finance’s automobile loans, and average less than $50,000.
These contracts were purchased on an indirect basis through a referral program administered by the third-party and were for prime loans made to individuals with higher credit scores and therefore typically priced at rates lower than C&F Finance’s automobile loans and averaged less than $50,000.
The FDIC also may impose capital requirements in excess of these standards on a case-by-case basis for various reasons, including financial condition or actual or anticipated growth. ​ Basel III Capital Framework.
The FDIC establishes risk-based and leveraged capital standards for the financial institutions they regulate. The FDIC also may impose capital requirements in excess of these standards on a case-by-case basis for various reasons, including financial condition or actual or anticipated growth. ​ Basel III Capital Framework.
In addition, all federal and state banking agencies continue to increase focus on cybersecurity programs and risks as part of regular supervisory exams. ​ On November 18, 2021, the federal bank regulatory agencies issued a final rule to improve the sharing of information about cybersecurity incidents that may affect the U.S. banking system.
In addition, federal and state banking agencies continue to increase focus on cybersecurity programs and risks as part of regular supervisory exams. ​ The federal bank regulatory agencies adopted rules to improve the sharing of information about cybersecurity incidents that may affect the U.S. banking system.
In reviewing applications seeking approval of merger and acquisition transactions, the bank regulatory agencies will consider, among other things, the competitive effect and public benefits of the transactions, the financial condition, managerial resources, capital position and any asset concentrations (including commercial real estate loan concentrations) of the constituent organizations and the combined organization, the risks to the stability of the U.S. banking or financial system, the applicant's performance record under the Community Reinvestment Act (CRA), fair lending laws, and fair housing initiatives, the data security and cybersecurity infrastructure of the constituent organizations and the combined organization, the applicant’s risk management programs and processes, and the applicant’s compliance with and the effectiveness of the subject organizations in combating money laundering activities and complying with Bank Secrecy Act requirements. ​ The federal regulatory framework applicable to bank mergers has recently received significant attention and been the subject of numerous proposals to update or revise such framework.
In reviewing applications seeking approval of merger and acquisition transactions, the bank regulatory agencies will consider, among other things, the competitive effect and public benefits of the transactions, the financial condition, managerial resources, capital position and any asset concentrations (including CRE loan concentrations) of the constituent organizations and the combined organization, the risks to the stability of the U.S. banking or financial system, the applicant's performance record under the Community Reinvestment Act (CRA), fair lending laws, and fair housing initiatives, the data security and cybersecurity infrastructure of the constituent organizations and the combined organization, the applicant’s risk management programs and processes, and the applicant’s compliance with and the effectiveness of the subject organizations in combating money laundering activities and complying with Bank Secrecy Act requirements. ​ Certain Transactions by Insured Banks with their Affiliates .
We consider relations with our employees to be excellent. We strive for our workforce to reflect the diversity of the customers and communities we serve. Our selection and promotion processes are without bias. We also aim for our employees to develop their careers in our businesses.
We consider relations with our employees to be excellent. Our selection and promotion processes are without bias. We also aim for our employees to develop their careers in our businesses.
The rule requires a banking organization to notify its primary federal regulator of any significant computer-security incident as soon as possible and no later than 36 hours after the banking organization determines that a cybersecurity incident has occurred.
A banking organization must notify its primary federal regulator of any significant computer-security incident that may pose a threat to the stability of the U.S. financial sector as soon as possible and no later than 36 hours after the banking organization determines that a notification incident has occurred.
The CTA imposes additional reporting requirements on entities not previously subject to such beneficial ownership disclosure regulations and also contains exemptions for several different types of entities, including among others: (i) certain banks, bank holding companies, and credit unions; (ii) money transmitting businesses registered with FinCEN; and (iii) certain insurance companies.
The CTA imposes additional reporting requirements on entities not previously subject to such beneficial ownership disclosure regulations and also contains exemptions for several different types of entities, including among others: (i) certain banks, bank holding companies, and credit unions; (ii) money transmitting businesses registered with FinCEN; and (iii) certain insurance companies. ​ On September 29, 2022, FinCEN issued the final rule (the Reporting Rule) to implement the beneficial ownership reporting requirements of the CTA, which was effective January 1, 2024, and would have required reporting of beneficial ownership for entities that were formed or first registered prior to 2024 by January 1, 2025.
The CFPB is specifically authorized by the Dodd-Frank Act, among other things, to take action to prevent companies providing consumer financial products or services and their service providers from engaging in unfair, deceptive or abusive acts or practices in connection with consumer financial products and services, and to issue rules requiring enhanced disclosures for consumer financial products or services.
The CFPB is specifically authorized by the Dodd-Frank Act, among other things, to take action to prevent companies providing consumer financial products or services and their service providers from engaging in unfair, deceptive or abusive acts or practices in connection with consumer financial products and services, and to issue rules requiring enhanced disclosures for consumer financial products or services. ​ Because the Corporation and the Bank are smaller institutions (i.e., with assets of $10 billion or less), most consumer protection aspects of the Dodd-Frank Act will continue to be applied to the Corporation by the Federal Reserve Board and to the Bank by the FDIC.
The Corporation also must file annual, quarterly and other periodic reports with, and comply with other regulations of, the SEC. ​ Capital Requirements ​ Regulatory Capital Requirements. All financial institutions are required to maintain minimum levels of regulatory capital. The FDIC establishes risk-based and leveraged capital standards for the financial institutions they regulate.
The Corporation also must file annual, quarterly and other periodic reports with, and comply with other regulations of, the SEC, as well as the rules of the NASDAQ Global Select Market. ​ Capital Requirements ​ Regulatory Capital Requirements. All financial institutions are required to maintain minimum levels of regulatory capital.
The specific impacts of regulatory reforms cannot yet be fully predicted 9 Table of Contents and will depend to a large extent on the specific regulations that are likely to be adopted in the future.
The specific impacts of regulatory reforms cannot yet be fully predicted and will depend to a large extent on the specific regulations that are likely to be adopted in the future. In addition to laws and regulations, regulatory agencies may issue policy statements, interpretive letters, and similar written guidance applicable to us.
The CFPB is the federal regulatory agency that is responsible for implementing, examining and enforcing compliance with federal consumer financial laws for institutions with more than $10 billion of assets and, to a lesser extent, smaller institutions.
Failure to comply with consumer protection requirements may also result in delays in obtaining or failure to obtain any required bank regulatory approval for proposed merger or acquisition transactions. ​ The CFPB is the federal regulatory agency that is responsible for implementing, examining and enforcing compliance with federal consumer financial laws for institutions with more than $10 billion of assets and, to a lesser extent, smaller institutions.
In addition, the rule requires a bank service provider to notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected or is reasonably likely to materially affect banking organization customers for four or more hours.
A bank service provider must also notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected or is reasonably likely to materially affect banking organization customers for four or more hours. ​ With increased focus on cybersecurity, we are continuing to monitor legislative, regulatory and supervisory developments related thereto.
The rule became effective on May 1, 2022. ​ With increased focus on cybersecurity, we are continuing to monitor legislative, regulatory and supervisory developments related thereto. We had no material cybersecurity incidents in 2024. ​ Stress Testing. The federal banking agencies have implemented stress testing requirements for certain large or risky financial institutions, including bank holding companies and state-chartered banks.
We had no material cybersecurity incidents in 2025. ​ Stress Testing. The federal banking agencies have implemented stress testing requirements for certain large or risky financial institutions, including bank holding companies and state-chartered banks.
The policy statement, which, among other things, exempts certain bank holding companies from minimum consolidated regulatory capital ratios that apply to other bank holding companies.
The policy statement, which, among other things, exempts certain bank holding companies from minimum consolidated regulatory capital ratios that apply to other bank holding companies. When the Corporation reaches $3 billion in assets, the Corporation will be subject to the Basel III Final Rules independent of the Bank.
The Corporation’s SEC filings also are available through our website at http://www.cffc.com under “Investor Relations/Financial Documents/SEC Filings” as of the day they are filed with the SEC.
The Corporation’s SEC filings also are available through our website at http://www.cffc.com under “Investor Relations/Financials/SEC Filings” as of the day they are filed or furnished with the SEC. The information contained on our website is not part of this Form 10-K nor incorporated by reference into this Form 10-K or of any other filing with the SEC.
The Corporation and the Bank continue to monitor the status of those proposed rules and FDIC action and statements with respect thereto. ​ Other Regulations ​ Prompt Corrective Action. The federal banking agencies have broad powers under current federal law to take prompt corrective action to resolve problems of insured depository institutions.
The rules became effective on April 1, 2021 and, to date, there has been no material impact to either the Corporation or the Bank from the rules. ​ Other Regulations ​ Prompt Corrective Action. The federal banking agencies have broad powers under current federal law to take prompt corrective action to resolve problems of insured depository institutions.
As a result of this final rule, the total base assessment rates beginning with the first quarter of 2023 for institutions with less than $10 billion in assets that have been insured for at least five years range from 2.5 to 32 basis points.
At December 31, 2025, total base assessment rates for institutions that have been insured for at least five years range from 2.5 to 32 basis points (bps) applying to banks with less than $10 billion in assets. ​ Regulation and Supervision of the Bank and Other Subsidiaries ​ The Bank is subject to supervision, regulation and examination by the VBFI and its primary federal regulator, the FDIC.
The Corporation expects that its trust preferred securities will be included in the Corporation’s regulatory capital as Tier 1 capital instruments until their maturity. ​ As of December 31, 2024, the Bank met all capital adequacy requirements under the Basel III Final Rules, including the capital conservation buffer. ​ In July 2023, the Federal Reserve Board and the FDIC issued proposed rules to implement the final components of the Basel III agreement, often known as the “Basel III endgame.” These proposed rules contain provisions that apply to banks with $100 billion or more in total assets and that will significantly alter how those banks calculate risk-based assets.
The Corporation expects that its trust preferred securities will be included in the Corporation’s regulatory capital as Tier 1 capital instruments until their maturity. ​ As of December 31, 2025, the Bank met all capital adequacy requirements under the Basel III Final Rules, including the capital conservation buffer. ​ Community Bank Leverage Ratio.
Pending further court action, beneficial ownership information reporting obligations are back in effect and a majority of companies must now report by March 21, 2025. ​ The Corporation will continue to monitor regulatory developments related to the CTA, including future FinCEN rulemakings, and will continue to assess the ultimate impact of the CTA on the Corporation and the Bank.
In March 2025, FinCEN issued an interim final rule removing the requirements for U.S. companies and U.S. persons to report such beneficial ownership information and indicated that it would issue a modified set of regulations regarding beneficial ownership disclosures. ​ The Corporation will continue to monitor regulatory developments related to the CTA, including future FinCEN rulemakings, and will continue to assess the ultimate impact of the CTA on the Corporation and the Bank.
These factors also are considered in evaluating mergers, acquisitions and applications to open a branch or facility.
These factors also are considered in evaluating mergers, acquisitions and applications to open a branch or facility. In 2023, the last time that the Bank’s CRA activities were evaluated by the FDIC, the Bank received a “Satisfactory” CRA rating. ​ Federal Home Loan Bank of Atlanta.
As a result of ongoing litigation, all deadlines for compliance with the amendments to Regulation B are currently stayed. If implemented as issued, the final rule would require the Bank to compile, maintain, and submit to the bureau certain small business lending data, including data on applications for credit by women-owned, minority-owned, and small businesses.
As a result of ongoing litigation, all deadlines for compliance with the amendments to Regulation B are currently stayed.
The SEC and the Federal Reserve did not join in such re-proposal. If these proposed rules are adopted, they may restrict the way that incentive compensation is structured. ​ Confidentiality and Required Disclosures of Customer Information. The Corporation is subject to various laws and regulations that address the privacy of nonpublic personal financial information of consumers.
It is unclear whether or when this rule will be finalized. ​ Confidentiality and Required Disclosures of Customer Information. The Corporation is subject to various laws and regulations that address the privacy of nonpublic personal financial information of consumers.
These investigations have extended to banks that engage in indirect automobile lending. ​ Brokered Deposits .
These investigations have extended to banks that engage in indirect automobile lending. ​ Real Estate Lending Standards and Guidance. The federal regulatory agencies have adopted regulations setting forth standards for extensions of credit that are secured by real estate.
Removed
In addition to automobile financing, C&F Finance expanded its lending portfolio to include marine and RV loan contracts.
Added
In addition to automobile financing, C&F Finance’s lending portfolio includes marine and recreational vehicle (RV) loan contracts; however, the third-party administrator of this program significantly decreased sales of those loans to outside parties during 2025, which led to the consumer finance segment ending future purchases under the program.
Removed
The scope of the laws and regulations, and the intensity of the supervision to which the Corporation and its subsidiaries are subject, have increased in recent years, initially in response to the 2008 financial crisis, and more recently in light of other factors, including continued turmoil and stress in the financial markets, technological factors, market changes, increased scrutiny of proposed bank mergers and acquisitions by federal and state bank regulators, and regulatory initiatives related to social policy goals, including the elimination of certain fees charged by financial institutions. ​ Proposals to change the laws, regulations, and policies governing the banking industry are frequently raised at both the state and federal levels, and we expect that the new presidential administration will seek to implement a regulatory reform agenda that is significantly different than the agenda and policies of the previous administration, which we expect may significantly impact the rulemaking, supervision, examination, and enforcement priorities of the federal banking agencies.
Added
The marine 6 Table of Contents and RV loan portfolio is expected to run off over the next several years as scheduled borrower payments are made on the existing loans.
Removed
On January 20, 2025, the President issued a presidential memorandum titled “Regulatory Freeze Pending Review” that directs federal agencies to (1) not propose or issue any rules until they are reviewed and approved by a department or agency head appointed by the President, (2) immediately withdraw any unpublished rules to allow for the review by a department or agency head as described above, and (3) consider postponing for 60 days from the date of the executive order the effective date for any rules that have been published in the Federal Register, or any rules that have been issued but have not taken effect, to allow for review of any questions of fact, law, or policy.
Added
Many of these non-bank competitors are not subject to the same extensive federal regulations that govern bank holding companies and federally insured banks, which may allow them to offer greater lending limits and certain products and services that the Bank does not provide.
Removed
Subsequent to that presidential memorandum, the presidential administration has taken actions that have reduced available staffing at certain regulatory agencies, and reduced the current regulatory and enforcement activities of certain regulatory agencies, among other substantive impacts. ​ The Corporation continues to experience ongoing regulatory reform and these regulatory changes could have a significant effect on how we conduct business.
Added
Congress, state legislatures and federal and state regulatory agencies. ​ Proposals to change the laws, regulations, and policies governing the banking industry are frequently raised at both the state and federal levels.
Removed
These proposed rules do not apply to holding companies or banks with less than $100 billion in assets, such as the Corporation and the Bank, but the final impacts of these rules cannot yet be predicted. The comment window for these proposed rules closed on January 16, 2024. ​ Community Bank Leverage Ratio.
Added
These laws and regulations impose compliance costs and create obligations, including, in some cases, reporting obligations, and compliance with these laws, regulations, and obligations may require us to use significant resources. ​ The Corporation continues to experience ongoing regulatory reform and these regulatory changes could have a significant effect on how we conduct business.
Removed
As a result of the interim final rule, which was effective August 30, 2018, the Corporation expects that it will be treated as a small bank holding company and will not be subject to regulatory capital requirements.
Added
In November 2025, the federal banking regulators issued a proposal that would lower the leverage ratio for purposes of the CBLRF from 9% to 8%.
Removed
The comment period on the interim final rule closed on October 29, 2018 and, to date, the Federal Reserve Board has not issued a final rule to replace the interim final rule.
Added
The Bank is subject to a number of federal and state consumer protection laws that extensively govern its relationship with its customers.
Removed
At December 31, 2024, total base assessment rates for institutions that have been insured for at least five years range from 2.5 to 32 basis points applying to banks with less than $10 billion in assets. ​ The Dodd-Frank Act transferred to the FDIC increased discretion with regard to managing the required amount of reserves for the DIF, or the “designated reserve ratio.” The FDIA requires that the FDIC consider the appropriate level for the designated reserve ratio on at least an annual basis.
Added
If we fail to comply with these laws and regulations, we may be subject to various penalties or enforcement actions.
Removed
On October 18, 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rate schedules uniformly by 2 basis points, beginning in the first quarterly assessment period of 2023.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditional provision for indemnification losses or additional obligations arising from prepayments would have an adverse effect on the Corporation’s net income. ​ Our level of credit risk is higher due to the concentration of our loan portfolio in commercial real estate loans and in consumer finance automobile loans. ​ At December 31, 2024, 55 percent of our loan portfolio consisted of commercial real estate loans, which includes loans secured by apartment complexes, retail properties, and office and warehouse properties.
Biggest changeIf the Corporation is forced to sell debt securities in an unrealized loss position for liquidity or other needs or it determines that there is credit loss with respect to any of the Corporation’s debt securities, the Corporation may be forced to recognize those losses or an impairment charge in net income. ​ The concentration of commercial real estate loans, including construction loans, and consumer finance automobile loans in our loan portfolio increases credit risk. ​ At December 31, 2025, 46 percent of our loan portfolio consisted of commercial real estate loans and commercial real estate construction loans, which includes both owner-occupied and non-owner-occupied loans secured by apartment complexes, retail properties, and office and warehouse properties.
However, a deterioration in economic or other conditions in the localities in which these institutions do business in could adversely affect their financial condition and results of operations, and therefore adversely affect the value of our investments.
However, a deterioration in economic or other conditions in the localities in which these institutions do business could adversely affect their financial condition and results of operations, and therefore adversely affect the value of our investments.
Business, of this Annual Report on Form 10-K for a more detailed description of the certain regulatory requirements applicable to the Corporation. ​ The financial services industry may be subject to new or changing legislation, regulation, and government policy, which could affect the banking industry and the broader economy. ​ At this time, it is difficult to predict the legislative and regulatory changes that will result from the combination of the new presidential administration and both Houses of Congress having majority memberships from the same political party.
Business, of this Annual Report on Form 10-K for a more detailed description of the certain regulatory requirements applicable to the Corporation. ​ The financial services industry may be subject to new or changing legislation, regulation, and government policy, which could affect the banking industry and the broader economy. ​ At this time, it is difficult to predict the legislative and regulatory changes that will result from the combination of the current presidential administration and both Houses of Congress having majority memberships from the same political party.
For example, consumers can now maintain funds that would have historically been held as bank deposits in brokerage accounts, mutual funds, general-purpose reloadable prepaid cards, or in other types of assets, including crypto currencies or other digital assets. Consumers can also complete transactions such as paying bills or transferring funds directly without the assistance of banks.
For example, consumers can now maintain funds that would have historically been held as bank deposits in brokerage accounts, mutual funds, general-purpose reloadable prepaid cards, or in other types of assets, including crypto currencies, stablecoins or other digital assets. Consumers can also complete transactions such as paying bills or transferring funds directly without the assistance of banks.
In particular, in the current higher interest rate environment (when compared to 2020 to 2022), our originations of mortgage loans decreased, resulting in fewer loans available to be sold to investors, which has resulted in a decrease in noninterest income that may continue into future periods, and which may occur during other periods of rising interest rates.
In particular, in the current higher interest rate environment (when compared to 2020 to 2022), our originations of mortgage loans have decreased, resulting in fewer loans available to be sold to investors, which has resulted in a decrease in noninterest income that may continue into future periods, and which may occur during other periods of rising interest rates.
Additionally, the Corporation could experience further net interest margin compression if it is unable to maintain its current level of loans outstanding by continuing to originate new loans or if it experiences a decrease in deposit balances, which would require the Corporation to seek funding from other sources at relatively higher rates of interest.
Additionally, the Corporation could experience net interest margin compression if it is unable to maintain its current level of loans outstanding by continuing to originate new loans or if it experiences a decrease in deposit balances, which would require the Corporation to seek funding from other sources at relatively higher rates of interest.
Adverse conditions in our business climate, including a significant decline in future operating cash flows, changes in interest rates that may lead to net interest margin compression, changes in demand for loans or our ability to originate and hold loans, a sustained period of elevated loan losses, a significant decrease in valuations or stock prices of the Corporation or other bank holding companies, or a deviation from our expected growth rate and performance, may significantly affect the fair value of the Corporation’s reporting units and may trigger impairment losses on intangible assets, which could be materially adverse to our results of operations. ​ ​ Risk Factors Related to our Operations and Technology ​ Our risk management framework may not be effective in mitigating risk and loss. ​ We maintain an enterprise risk management program that is designed to identify, quantify, monitor, report and control the risks we face.
Adverse conditions in our business climate, including a significant decline in future operating cash flows, changes in interest rates that may lead to net interest margin compression, changes in demand for loans or our ability to originate and hold loans, a sustained period of elevated loan losses, a significant decrease in valuations or stock prices of the Corporation or other bank holding companies, or a deviation from our expected growth rate and performance, may significantly affect the fair value of the Corporation’s reporting units and may trigger impairment losses on intangible assets, which could be materially adverse to our results of operations. ​ 25 Table of Contents Risk Factors Related to our Operations and Technology ​ Our risk management framework may not be effective in mitigating risk and loss. ​ We maintain an enterprise risk management program that is designed to identify, quantify, monitor, report and control the risks we face.
Adverse developments in any of these factors could result in among other things, a decline in loan demand, a reduction in the number of credit-worthy borrowers seeking loans, an increase in delinquencies, defaults and foreclosures, an increase in classified and nonaccrual loans, a decrease in the value of loan collateral, and a decline in the financial condition of borrowers and guarantors, any of which could adversely affect our financial condition or business. ​ The level of the Corporation’s allowance for credit losses is particularly sensitive to changes in the actual and forecasted national unemployment rate and changes in current conditions or reasonably expected future conditions affecting the collectability of loans.
Adverse developments in any of these factors could result in among other things, a decline in loan demand, a reduction in the number of credit-worthy borrowers seeking loans, an increase in delinquencies, defaults and foreclosures, an increase in classified and nonaccrual loans, a decrease in the value of loan collateral, and a decline in the financial condition of borrowers and guarantors, any of which could adversely affect our financial condition or business. ​ 20 Table of Contents The level of the Corporation’s allowance for credit losses is particularly sensitive to changes in the actual and forecasted national unemployment rate and changes in current conditions or reasonably expected future conditions affecting the collectability of loans.
If our risk management program has flaws or gaps, or if our risk management controls do not function effectively, our results of operations, financial condition or business may be adversely affected. 26 Table of Contents We are subject to security and operational risks, including cybersecurity risks and cybersecurity attacks, relating to our use of technology that could damage our reputation and our business. ​ In the ordinary course of business, the Corporation collects and stores sensitive data, including proprietary business information and personally identifiable information of our customers and employees, in systems and on networks, including those hosted by third-party vendors.
If our risk management program has flaws or gaps, or if our risk management controls do not function effectively, our results of operations, financial condition or business may be adversely affected. ​ We are subject to security and operational risks, including cybersecurity risks and cybersecurity attacks, relating to our use of technology that could damage our reputation and our business. ​ In the ordinary course of business, the Corporation collects and stores sensitive data, including proprietary business information and personally identifiable information of our customers and employees, in systems and on networks, including those hosted by third-party vendors.
The potential impact of any changes in agency personnel, policies, priorities, regulations and interpretations on the financial services sector, including us, cannot be predicted. ​ The new presidential administration and Congress also may cause broader economic changes due to changes in governing ideology and governing style, as well as changes to the size, scope and operations of the federal government.
The potential impact of any changes in agency personnel, policies, priorities, regulations and interpretations on the financial services sector, including us, cannot be predicted. ​ The current presidential administration and Congress also may cause broader economic changes due to changes in governing ideology and governing style, as well as changes to the size, scope and operations of the federal government.
These factors could materially and adversely affect the Company’s business, financial condition, liquidity, results of operations, and capital position, and could cause the Company’s actual results to differ materially from its historical results or the results contemplated by the forward-looking statements contained in this Annual Report on Form 10-K, in which case the trading price of the Company’s common stock could decline. ​ Risk Factors Related to our Lending Activities and Economic Conditions ​ Our business is subject to various lending and other economic risks that could adversely affect our results of operations and financial condition. ​ Deterioration in economic conditions could adversely affect our business.
These factors could materially and adversely affect the Company’s business, financial condition, liquidity, results of operations, and capital position, and could cause the Company’s actual results to differ materially from its historical results or the results contemplated by the forward-looking statements contained in this Annual Report on Form 10-K, in which case the trading price of the Company’s common stock could decline. ​ 19 Table of Contents Risk Factors Related to our Lending Activities and Economic Conditions ​ Our business is subject to various lending and other economic risks that could adversely affect our results of operations and financial condition. ​ Deterioration in economic conditions could adversely affect our business.
Although we believe our allowance for credit losses is adequate to absorb losses that are inherent in our loan portfolio, we cannot predict the timing or severity of such losses nor give any assurance that our allowance will be adequate in the future. ​ Our banking regulators, as an integral part of their examination process, periodically review the allowance for credit losses and may require us to increase our allowance by recognizing additional provision for credit losses charged to expense, or to decrease the allowance by recognizing loan charge-offs.
Although we believe our allowance for credit losses is adequate to absorb expected losses in our loan portfolio, we cannot predict the timing or severity of such losses nor give any assurance that our allowance will be adequate in the future. ​ Our banking regulators, as an integral part of their examination process, periodically review the allowance for credit losses and may require us to increase our allowance by recognizing additional provision for credit losses charged to expense, or to decrease the allowance by recognizing loan charge-offs.
A deterioration in local economic conditions or in the condition of an industry on which a local market depends, such as the U.S. military and related defense contractors and industries, could adversely affect such factors as unemployment rates, business formations and expansions and housing market conditions.
A deterioration in local economic conditions or in the condition of an industry on which a local market depends, such as the U.S. federal government and related contractors or the U.S. military and related defense contractors and industries, could adversely affect such factors as unemployment rates, business formations and expansions and housing market conditions.
Further, we may rely on AI models developed by third parties, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility.
Further, we may rely on AI models developed by third parties, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited 27 Table of Contents visibility.
General market declines or market volatility in the future, especially in the financial institutions sector, could adversely affect the price of our common stock, and the current market price may not be indicative of future market prices. 30 Table of Contents Future issuances of our common stock could adversely affect the market price of our common stock and could be dilutive. ​ We may issue additional shares of common stock or securities that are convertible into or exchangeable for, or that represent the right to receive, shares of our common stock.
General market declines or market volatility in the future, especially in the financial institutions sector, could adversely affect the price of our common stock, and the current market price may not be indicative of future market prices. ​ Future issuances of our common stock could adversely affect the market price of our common stock and could be dilutive. ​ We may issue additional shares of common stock or securities that are convertible into or exchangeable for, or that represent the right to receive, shares of our common stock.
Banking regulators may also require us to maintain higher levels of capital due to our commercial real estate lending activity than we would otherwise be expected to maintain, which could adversely affect our business, financial condition, and results of operations. ​ At December 31, 2024, 21 percent of our loan portfolio consisted of consumer finance automobile loans, which includes loans to customers who have limited access to traditional automobile financing due to increased credit risk.
Banking regulators may also require us to maintain higher levels of capital due to our commercial real estate lending activity than we would otherwise be expected to maintain, which could adversely affect our business, financial condition, and results of operations. ​ At December 31, 2025, 20 percent of our loan portfolio consisted of consumer finance automobile loans, which includes loans to customers who may have limited access to traditional automobile financing due to increased credit risk.
If we are unable to access funding sufficient to support our business operations and growth strategies or are unable to access such funding on attractive terms, we may not be able to implement our business strategies which may negatively affect our financial performance. ​ 25 Table of Contents Consumers may increasingly decide not to use banks to complete their financial transactions, which could have a material adverse impact on our financial condition and operations. ​ Technology and other changes are allowing parties to complete financial transactions through alternative methods that historically have involved banks.
If we are unable to access funding sufficient to support our business operations and growth strategies or are unable to access such funding on attractive terms, we may not be able to implement our business strategies which may negatively affect our financial performance. ​ Consumers may increasingly decide not to use banks to complete their financial transactions, which could have a material adverse impact on our financial condition and operations. ​ Technology and other changes are allowing parties to complete financial transactions through alternative methods that historically have involved banks.
In addition, banking regulators 23 Table of Contents examine commercial real estate lending activity with heightened scrutiny due to these reasons and may require banks with higher levels of commercial real estate loans to implement more stringent underwriting, internal controls, risk management policies, and portfolio stress testing.
In addition, banking regulators examine commercial real estate lending activity with heightened scrutiny due to these reasons and may require banks with higher levels of commercial real estate loans to implement more stringent underwriting, internal controls, risk management policies, and portfolio stress testing.
In addition, each of these third parties faces the risk of a cyber-attack, information breach or loss, or technology failure and there is no assurance that they have not or will not experience a system or network breach .
In addition, 26 Table of Contents each of these third parties faces the risk of a cyber-attack, information breach or loss, or technology failure and there is no assurance that they have not or will not experience a system or network breach .
The Corporation’s insurance may not cover all claims that may be asserted against it in legal or administrative actions or costs that it may incur defending such actions, and any claims asserted against it, regardless of merit or eventual outcome, may harm the Corporation’s reputation.
The Corporation’s insurance may not cover all claims that may be asserted against it in legal or administrative actions or costs that it may incur defending such actions, 31 Table of Contents and any claims asserted against it, regardless of merit or eventual outcome, may harm the Corporation’s reputation.
In addition, establishing systems and processes to achieve compliance with these laws and regulations may increase our costs and/or limit our ability to pursue certain business opportunities. ​ 28 Table of Contents Laws and regulations, and any interpretations and applications with respect thereto, generally are intended to benefit consumers, borrowers and depositors, but not stockholders.
In addition, establishing systems and processes to achieve compliance with these laws and regulations may increase our costs and/or limit our ability to pursue certain business opportunities. ​ Laws and regulations, and any interpretations and applications with respect thereto, generally are intended to benefit consumers, borrowers and depositors, but not stockholders.
Available for sale debt securities are carried at estimated fair value with the corresponding unrealized gains and losses recognized in other comprehensive income. Gains or losses are only recognized in net income upon the sale of the security.
Available for sale debt securities are carried at estimated fair 23 Table of Contents value with the corresponding unrealized gains and losses recognized in other comprehensive income. Gains or losses are only recognized in net income upon the sale of the security.
Either of these outcomes could have a material adverse impact on our financial condition and results of operations. ​ The development and use of Artificial Intelligence (“AI”) presents risks and challenges that may adversely impact our business. ​ We or our third-party vendors, clients or counterparties may develop or incorporate AI technology in certain business processes, services, or products.
Either of these outcomes could have a material adverse impact on our financial condition and results of operations. ​ The development and use of Artificial Intelligence (“AI”) presents risks and challenges that may adversely impact our business. ​ We and our third-party vendors, clients or counterparties have begun to develop and incorporate and will likely continue to develop or incorporate AI technology in certain business processes, services, or products.
Any deterioration in economic conditions, in particular a prolonged economic slowdown within our geographic region or a broader disruption in the economy, possibly as a result of a pandemic or other widespread public health emergency, acts of terrorism or outbreak of domestic or international hostilities (including the ongoing military conflicts between Russia and Ukraine and in the Middle East), could result in the following consequences, any of which could hurt our business materially: an increase in loan delinquencies; an increase in problem assets and foreclosures; a decline in demand for our products and services; a deterioration in the value of collateral for loans made by our various business segments; and changes in the fair value of financial instruments held by the Corporation or its subsidiaries. ​ Our earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies. ​ The policies of the Federal Reserve affect us significantly.
Any deterioration in economic conditions, in particular a prolonged economic slowdown within our geographic region or a broader disruption in the economy, possibly as a result of a pandemic or other widespread public health emergency, acts of terrorism or outbreak of domestic or international hostilities (including the military conflict with Iran), could result in the following consequences, any of which could hurt our business materially: an increase in loan delinquencies; an increase in problem assets and foreclosures; a decline in demand for our products and services; a deterioration in the value of collateral for loans made by our various business segments; and changes in the fair value of financial instruments held by the Corporation or its subsidiaries. ​ Our earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies. ​ The policies of the Federal Reserve affect us significantly.
Our inability to identify, recruit and retain talented personnel to manage our operations effectively and in a timely manner could limit our growth or impair our ability to implement our business strategy effectively and efficiently, which could materially adversely affect our business. ​ The Corporation or any of its subsidiaries is a defendant from time to time in a variety of litigation and other actions. ​ The Corporation or any of its subsidiaries may be involved from time to time in a variety of litigation arising out of its business, and the Corporation operates in a legal and regulatory environment that exposes it to potential significant litigation risk.
Our inability to identify, recruit and retain talented personnel to manage our operations effectively and in a timely manner could limit our growth or impair our ability to implement our business strategy effectively and efficiently, which could materially adversely affect our business. ​ The Corporation or any of its subsidiaries is a defendant from time to time in a variety of litigation and other actions. ​ From time to time, the Corporation or any of its subsidiaries or their respective directors and management are or may become involved in a variety of litigation arising out of its business, and the Corporation operates in a legal and regulatory environment that exposes it to potential significant litigation risk.
Our business is directly affected by general economic and market conditions; broad trends in industry and finance; legislative and regulatory changes; changes in governmental monetary and fiscal policies, including trade policies and tariffs; and inflation, all of which are beyond our control.
Our business is directly affected by general economic and market conditions; broad trends in industry and finance; legislative and regulatory changes; changes in governmental monetary and fiscal policies, including trade policies and tariffs; level and volatility of interest rates; and inflation, all of which are beyond our control.
The loss of the services of one or more of these officers could disrupt our operations and impair our ability to implement our business strategy, which could adversely affect our business, financial condition and results of operations. ​ The success of our business strategies depends on our ability to identify, recruit and retain individuals with experience and relationships in our primary markets. ​ The successful implementation of our business strategy will require us to continue to attract, hire, motivate and retain skilled personnel to develop new customer relationships as well as new financial products and services.
The loss of the services of one or more of these officers could disrupt our operations and impair our ability to implement our business strategy, and we may not be able to find adequate replacements, which could adversely affect our business, financial condition and results of operations. ​ The success of our business strategies depends on our ability to identify, recruit and retain individuals with experience and relationships in our primary markets. ​ The successful implementation of our business strategy will require us to continue to attract, hire, motivate and retain skilled personnel to develop new customer relationships as well as new financial products and services.
Our lending and deposit activities are directly affected by, and our financial success 21 Table of Contents depends on, economic conditions within these markets, as well as conditions in the industries on which those markets are economically dependent.
Our lending and deposit activities are directly affected by, and our financial success depends on, economic conditions within these markets, as well as conditions in the industries on which those markets are economically dependent.
The development and use of AI presents several potential risks and challenges to our business.
The development and use of AI present several potential risks and challenges to our business.
Accordingly, use of such third parties creates an unavoidable inherent risk to our businesses’ operations. 27 Table of Contents Our business is technology dependent, and an inability to successfully implement technological improvements may adversely affect our ability to be competitive and our results of operations and financial condition. ​ The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products, systems and services, which may require substantial initial investment to be implemented, including the cost of modifying or adapting existing products, systems and services.
Accordingly, use of such third parties creates an unavoidable inherent risk to our businesses’ operations. ​ Our business is technology dependent, and an inability to successfully implement technological improvements may adversely affect our ability to be competitive and our results of operations and financial condition. ​ The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products, systems and services, which may require substantial initial investment to be implemented, including the cost of modifying or adapting existing products, systems and services, and we anticipate that new technologies will continue to emerge.
It appears that the new presidential administration will seek to implement a regulatory reform agenda that is significantly different than that of the previous administration, impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies.
It appears that the current presidential administration is seeking to implement a regulatory reform agenda that is significantly different than that of the previous administration, impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies.
Additionally, the majority of the debt securities in which we have invested remained in an unrealized loss position as of December 31, 2024, due primarily to increases in interest rates after we purchased those debt securities.
Additionally, a portion of the debt securities in which we have invested remained in an unrealized loss position as of December 31, 2025, due primarily to increases in interest rates after we purchased those debt securities.
In addition, the Corporation’s results of operations could be adversely affected by changes in the way in which existing statutes and regulations are interpreted or applied by courts and government agencies. See “Regulation and Supervision” included in Item 1.
In addition, the Corporation’s results of operations could be adversely affected by changes in the way in which existing statutes and regulations are interpreted or applied by courts and government agencies, or as a result of changes in supervision, examination and enforcement priorities and policies of government agencies. See “Regulation and Supervision” included in Item 1.
However, because the techniques used to obtain unauthorized access, or to disable or degrade systems change frequently and are often not recognized until launched against a target, even with all reasonable security efforts, the Corporation may be unable to anticipate these techniques or to implement adequate protective measures. ​ Certain key applications, including our core data processing are outsourced to third party providers.
However, because the techniques used to obtain unauthorized access, or to disable or degrade systems change frequently and are often not recognized until launched against a target, even with all reasonable security efforts, the Corporation may be unable to anticipate these techniques or to implement adequate protective measures.
Prolonged periods of inflation may impact our profitability by negatively impacting our fixed costs and expenses, including increasing funding costs and expenses related to talent acquisition and retention, and negatively impacting the demand for our products and services. Additionally, inflation may lead to a decrease in consumer and client’s purchasing power and an increase in default rates on our loans.
Prolonged periods of inflation may impact our profitability by negatively impacting our fixed costs and expenses, including increasing funding costs and expenses related to talent acquisition and retention, and negatively impacting the demand for our products and services. Additionally, inflation and supply chain disruptions for our consumers and clients may lead to an increase in default rates on our loans.
If the Bank is unable to pay dividends to the Corporation, the Corporation may not be able to service its outstanding borrowings and other debt, pay its other obligations or pay a cash dividend to the holders of the Corporation’s common stock, and the Corporation’s business, financial condition and results of operations may be materially adversely affected. ​ Our common stock price may be volatile, which could result in losses to our investors. ​ Our common stock price has been volatile in the past, and several factors could cause the price to fluctuate in the future.
For information on these regulatory restrictions on the ability of the Bank to pay dividends to the Corporation, see Part I – Item I – “Regulation and Supervision – Limits on Dividends.” If the Bank is unable to pay dividends to the Corporation, the Corporation may not be able to service its outstanding borrowings and other debt, pay its other obligations or pay a cash dividend to the holders of the Corporation’s common stock, and the Corporation’s business, financial condition and results of operations may be materially adversely affected. 30 Table of Contents Our common stock price may be volatile, which could result in losses to our investors. ​ Our common stock price has been volatile in the past, and several factors could cause the price to fluctuate in the future.
The number of delinquent loans, fluctuations in wholesale values of used automobiles and the availability of repossession agencies may impact the amount of net charge-offs experienced within the consumer finance automobile portfolio.
The number of delinquent loans, fluctuations in wholesale values of used automobiles and the availability of repossession agencies may impact the amount of net charge-offs experienced within the consumer finance automobile portfolio. In addition, our servicing costs may increase without a corresponding increase in our finance charge income.
Increased competition could require us to increase the rates we pay on deposits or lower the rates we offer on loans, which could adversely affect our profitability. ​ Accounting for business combinations may expose us to intangible asset risk, which could affect our results of operations. ​ In connection with accounting for prior acquisitions, we recorded assets acquired and liabilities assumed at their fair value, which resulted in the recognition of certain intangible assets, including goodwill.
Accounting for business combinations may expose us to intangible asset risk, which could affect our results of operations. ​ In connection with accounting for prior acquisitions, we recorded assets acquired and liabilities assumed at their fair value, which resulted in the recognition of certain intangible assets, including goodwill.
If we are required to materially increase our level of allowance for credit losses for any reason, such increase could adversely affect our business, financial condition, and results of operations. ​ An increase in mortgage loan defaults or prepayments may result in losses related to loans sold by C&F Mortgage. ​ Deterioration in economic conditions may cause borrowers to default on their mortgages, which may result in losses to investors who purchased residential mortgage loans originated by C&F Mortgage and sold in the secondary market, especially if accompanied by declines in the value of residential real estate securing those loans.
Any such required additional provisions for credit losses or charge-offs could have a material adverse effect on our financial condition and results of operations. ​ 22 Table of Contents An increase in mortgage loan defaults or prepayments may result in losses related to loans sold by C&F Mortgage. ​ Deterioration in economic conditions may cause borrowers to default on their mortgages, which may result in losses to investors who purchased residential mortgage loans originated by C&F Mortgage and sold in the secondary market, especially if accompanied by declines in the value of residential real estate securing those loans.
Further, the financial services industry has recently faced more aggressive enforcement of laws at federal, state and local levels, particularly in connection with practices that they deem to harm consumers or the financial system more generally. ​ Future legislation, regulation and government policy, particularly following changes in political leadership and policymakers in the federal government, could affect the banking industry as a whole, including the Corporation’s business and results of operations, in ways that are difficult to predict.
Our success depends on our ability to maintain compliance with both existing and new laws and regulations. 28 Table of Contents Further, the financial services industry faces more aggressive enforcement of laws at federal, state and local levels, particularly in connection with practices that may harm consumers or the financial system more generally. ​ Future legislation, regulation and government policy, particularly following changes in political leadership and policymakers in the federal government, could affect the banking industry as a whole, including the Corporation’s business and results of operations, in ways that are difficult to predict.
ESG-related costs, including with respect to compliance with any additional regulatory or disclosure requirements or expectations, could adversely impact our results of operations. ​ Risks Related to Owning the Corporation’s Common Stock ​ The trading volume of our common stock may not provide adequate volume for investors, and future sales of our common stock by shareholders or the perception that those sales could occur may cause our common stock price to decline. ​ Although our common stock is listed for trading on NASDAQ Global Select Market, the trading volume in our common stock may be lower than that of other larger financial institutions.
We cannot currently predict the impact of such changes on our business, financial condition and results of operation. ​ Risks Related to Owning the Corporation’s Common Stock ​ The trading volume of our common stock may not provide adequate volume for investors, and future sales of our common stock by shareholders or the perception that those sales could occur may cause our common stock price to decline. ​ Although our common stock is listed for trading on NASDAQ Global Select Market, the trading volume in our common stock may be lower than that of other larger financial institutions.
We are subject to interest rate risk and fluctuations in interest rates may negatively affect our financial performance. ​ Our profitability depends in substantial part on our net interest margin, which is the difference between the interest earned on loans, securities and other interest-earning assets, and interest paid on deposits and borrowings divided by total interest-earning assets.
Additional provision for indemnification losses or additional obligations arising from prepayments would have an adverse effect on the Corporation’s net income. ​ ​ Risk Factors Related to our Industry and Financial Markets ​ We are subject to interest rate risk and fluctuations in interest rates may negatively affect our financial performance. ​ Our profitability depends in substantial part on our net interest margin, which is the difference between the interest earned on loans, securities and other interest-earning assets, and interest paid on deposits and borrowings divided by total interest-earning assets.
These factors include, but are not limited to, actual or anticipated variations in earnings, changes in analysts’ recommendations or projections with regard to our common stock or the markets and businesses in which we operate, operations and stock performance of other companies deemed to be our peers, and reports of trends and concerns and other issues related to the financial services industry.
These factors include, but are not limited to, actual or anticipated variations in earnings, changes in analysts’ recommendations or projections with regard to our common stock or the markets and businesses in which we operate, operations and stock performance of other companies deemed to be our peers, reports of trends and concerns and other issues related to the financial services industry, changes in government regulations, geopolitical conditions such as acts or threats of terrorism, military conflicts, the effects (or perceived effects) of pandemics and trade relations, and the realization of any of the other risks presented in this Form 10-K.
The process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits.
Trends toward digital financial transactions have accelerated, and we may face increased competition from fintech companies. The process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits.
Additionally, under ASC 326 a loss is recognized for expected credit losses on available for sale debt securities or when the Corporation does not expect to recover its investment in a debt security, to the extent that the carrying amount of the security exceeds its market value.
Under Accounting Standards Codification (ASC) 326, a loss is recognized when the Corporation does not expect to recover its investment in a debt security, calculated as the amount that the carrying value of the security exceeds its market value.
The anticipated amount of estimated credit losses on loans, and therefore the appropriateness of the allowance for credit losses and related provision for credit losses charged against earnings, could change significantly and adversely affect our financial condition and results of operations. ​ The Corporation also invests in the debt securities of corporate issuers, primarily financial institutions, that the Corporation views as having a strong financial position and earnings potential.
The anticipated amount of estimated credit losses on loans, and therefore the appropriateness of the allowance for credit losses and related provision for credit losses charged against earnings, could change significantly and adversely affect our financial condition and results of operations.
Although the Federal Reserve lowered the target range by 50 basis points in September 2024 and 25 basis points in both November and December 2024, the inflationary outlook in the U.S. remains uncertain and the Corporation cannot predict the timing or magnitude of future Federal Reserve monetary policy actions.
Although the Federal Reserve has shifted toward reducing the target range, the economic and inflationary outlook in the U.S. remains uncertain and the Corporation cannot predict the timing or magnitude of future Federal Reserve monetary policy actions.
The legislative and regulatory environment is beyond our control, may change rapidly and unpredictably and may negatively influence our revenues, costs, earnings, and capital levels. Our success depends on our ability to maintain compliance with both existing and new laws and regulations.
The legislative and regulatory environment is beyond our control, may change rapidly and unpredictably and may negatively influence our revenues, costs, earnings, and capital levels.
The limitations and restrictions imposed by the CFPB may produce significant, material effects on our business, financial condition and results of operations. 29 Table of Contents Increased scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to environmental, social and governance (ESG) practices may impose additional costs on the Corporation or expose it to new or additional risks.
Additionally, comprehensive changes to the federal government could be materially adverse to the regional and local economies where we conduct business and to our customers, which, in turn, could be materially adverse to our business, financial condition and results of operations. ​ ​ Increased scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to environmental, social and governance (ESG) practices may impose additional costs on the Corporation or expose it to new or additional risks.
Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures. ​ Risks Related to the Regulation of the Corporation ​ Compliance with laws, regulations and supervisory guidance, both new and existing, may adversely affect our business, financial condition and results of operations. ​ We are subject to numerous laws, regulations and supervision from both federal and state agencies.
To the extent that any flawed models or inaccurate model outputs are used in reports to banking agencies or the public, we could be subjected to supervisory actions, private litigation, and other proceedings that may adversely affect our business, financial condition, and results of operations. ​ ​ Risks Related to the Regulation of the Corporation ​ Compliance with laws, regulations and supervisory guidance, both new and existing, may adversely affect our business, financial condition and results of operations. ​ We are subject to numerous laws, regulations and supervision from both federal and state agencies.
Alternatively, an expansion of the money supply could make it easier for a borrower to obtain a loan from another financial institution at a lower interest rate, resulting in a payoff of that borrower’s higher rate loan with us, and which could have an adverse effect on our financial condition and results of operations. ​ Adverse changes in economic conditions in our market areas or adverse conditions in an industry on which a local market in which we do business is dependent could adversely affect our results of operations and financial condition. ​ We provide full-service banking and other financial services throughout eastern and central Virginia, mortgage banking in Virginia and the surrounding states, and consumer finance activities primarily throughout the Mid-Atlantic, Midwest and Southern United States.
If interest rates were to decline quickly, our net interest margin could be adversely affected in the short term as our assets typically reprice downward more quickly than our deposits and borrowings. ​ Adverse changes in economic conditions in our market areas or adverse conditions in an industry on which a local market in which we do business is dependent could adversely affect our results of operations and financial condition. ​ We provide full-service banking and other financial services throughout eastern and central Virginia, mortgage banking in Virginia and the surrounding states, and consumer finance activities primarily throughout the Mid-Atlantic, Midwest and Southern United States.
Changes in interest rates will affect our net interest margin in diverse ways, including the pricing 24 Table of Contents of loans and deposits, the levels of prepayments and asset quality. We are unable to predict actual fluctuations of market interest rates because many factors influencing interest rates, including changes in economic conditions, are beyond our control.
Changes in interest rates will affect our net interest margin in diverse ways, including the pricing of loans and deposits, the levels of prepayments and asset quality.
Should the ultimate judgments or settlements and/or costs incurred in any litigation exceed any applicable insurance coverage, they could have a material adverse effect on the Corporation’s financial condition and results of operation for any period. ​ ITEM 1B. UNRESOLVED STAFF COMMENT S ​ The Corporation has no unresolved comments from the SEC staff. ​
Should the ultimate judgments or settlements and/or costs incurred in any litigation exceed any applicable insurance coverage, they could have a material adverse effect on the Corporation’s financial condition and results of operation for any period. ​ We are subject to physical and financial risks associated with climate change and other weather and natural disaster impacts ​ We are subject to the growing risk of climate change.
Additionally, comprehensive changes to the federal government could be materially adverse to the regional and local economies where we conduct business and to our customers, which, in turn, could be materially adverse to our business, financial condition and results of operations. ​ The CFPB may increase our regulatory compliance burden and could affect the consumer financial products and services that we offer. ​ The CFPB significantly influences consumer financial laws, regulation and policy through rulemaking related to enforcement of the Dodd-Frank Act’s prohibitions against unfair, deceptive and abusive consumer finance products or practices, which are directly affecting the business operations of financial institutions offering consumer financial products or services, including the Corporation.
Any adverse publicity or adverse impact on our reputation in connection with ESG, any shifts in investing priorities among investors, or any loss of business resulting from any of the foregoing, may result in adverse effects on the trading price of our common stock and/or our business, operations and earnings. ​ 29 Table of Contents The CFPB may increase our regulatory compliance burden and could affect the consumer financial products and services that we offer. ​ The CFPB influences consumer financial laws, regulation and policy through rulemaking related to enforcement of the Dodd-Frank Act’s prohibitions against unfair, deceptive and abusive consumer finance products or practices, which directly affect the business operations of financial institutions offering consumer financial products or services, including the Corporation.
Further, the CFPB may include its own examiners in regulatory examinations by the Corporation’s primary regulators.
Further, the CFPB may include its own examiners in regulatory examinations by the Corporation’s primary regulators. The limitations and restrictions imposed by the CFPB may produce significant, material effects on our business, financial condition and results of operations.
As a regulated financial institution and a publicly traded company, we may face increasing scrutiny from customers, regulators, investors, and other stakeholders related to ESG practices and disclosure. Investor advocacy groups, investment funds, and influential investors are increasingly focused on these practices, especially as they relate to climate risk, hiring practices, diversity, health and safety and human rights.
As a regulated financial institution and a publicly traded company, we may face increasing scrutiny from customers, regulators, investors, and other stakeholders related to ESG practices and disclosure. Often these stakeholders have differing, and sometimes conflicting, priorities and expectations regarding ESG issues.
While we manage the higher risk inherent in loans made to these borrowers through our underwriting criteria for installment sales contracts we purchase and collection methods, we cannot guarantee that these criteria or methods will ultimately provide adequate protection against these risks. ​ ​ Risk Factors Related to our Industry and Financial Markets ​ Our business, financial condition, and results of operations could be adversely affected by developments impacting the financial services industry, such as bank failures or concerns involving liquidity.
While we manage the higher risk inherent in loans made to these borrowers through our underwriting criteria for installment sales contracts we purchase and collection methods, we cannot guarantee that these criteria or methods will ultimately provide adequate protection against these risks. ​ ​ 21 Table of Contents Weakness in the secondary residential mortgage loan markets or demand for mortgage loans may adversely affect income from C&F Mortgage. ​ Our mortgage banking segment has historically provided a significant portion of our noninterest income by generating gains on sales of mortgage loans that we originate.
As a result of increases in market interest rates during 2022 and 2023, the market value of the Corporation’s investment portfolio declined significantly during those periods.
Increases in market interest rates has in the past, and may in the future, cause the market value of the Corporation’s investment portfolio to decline significantly.
Failure to comply with these laws and regulations could result in financial, structural and operational penalties, including receivership.
Our compliance with these laws is costly and potentially restricts certain of our activities, including payment of dividends, mergers and acquisitions, investments, loans and interest rates charged, interest rates paid on deposits and locations of our offices. Failure to comply with these laws and regulations could result in financial, structural and operational penalties, including receivership.
The loss of these revenue streams and the loss of deposits as a lower cost source of funds could have a material adverse effect on our financial condition and results of operations. ​ Competition from other financial institutions and financial intermediaries may adversely affect our profitability. ​ We face substantial competition in originating loans and in attracting deposits.
The loss of these revenue streams and the loss of deposits as a lower cost source of funds could have a material adverse effect on our financial condition and results of operations. ​ There has also been a significant increase in digital asset adoption globally over the past several years. For example, the Guiding and Establishing National Innovation for U.S.
Removed
If the Corporation is forced to sell debt securities in an unrealized loss position for liquidity or other needs or it determines that there is credit loss with respect to any of the Corporation’s debt securities, the Corporation may be forced to recognize those losses or an impairment charge in net income. ​ Weakness in the secondary residential mortgage loan markets or demand for mortgage loans may adversely affect income from C&F Mortgage. ​ Our mortgage banking segment has historically provided a significant portion of our noninterest income by generating gains on sales of mortgage loans that we originate.
Added
Alternatively, an expansion of the money supply could make it easier for a borrower to obtain a loan from another financial institution at a lower interest rate, resulting in a payoff of that borrower’s higher rate loan with us, and which could have an adverse effect on our financial condition and results of operations.
Removed
Because any estimate of credit losses is necessarily subjective and the accuracy of any estimate depends on the outcome of future events that are not within our control, we face the risk that charge-offs in future periods will exceed our allowance for credit losses and that additional provision for credit losses will be required, which would have an adverse 22 Table of Contents effect on the Corporation’s net income.
Added
The Corporation also invests in the debt securities of corporate issuers, primarily financial institutions, that the Corporation views as having a strong financial position and earnings potential.
Removed
Any such required additional provisions for credit losses or charge-offs could have a material adverse effect on our financial condition and results of operations. ​ On January 1, 2023, we adopted Accounting Standards Codification (ASC) Topic 326, “Financial Instruments—Credit Losses” (ASC 326), which replaced the accounting principles for the recognition of loan losses based on losses that have been incurred with a requirement to record an allowance for credit losses that represents expected credit losses over the lifetime of all loans in the Corporation’s portfolio.
Added
If our banking regulators determine that our commercial real estate lending activities are particularly risky and are subject to such heightened scrutiny, we may incur significant additional costs or be required to restrict certain of our commercial real estate lending activities.
Removed
Under ASC 326, the Corporation’s estimate of expected credit losses is based on reasonable and supportable forecasts of future economic conditions and loan performance.
Added
The process to determine the allowance for credit losses uses models and assumptions that require us to make difficult and complex judgments that are often interrelated. This includes forecasting how borrowers will perform in changing and unprecedented economic conditions.
Removed
While the adoption of ASC 326 does not affect ultimate loan performance or cash flows of the Corporation from making loans, recognizing an allowance based on expected credit losses may create volatility in the level of our allowance for credit losses and our results of operations, including based on volatility in economic forecasts and our expectations of loan performance in future periods, as actual results may differ materially from our estimates.
Added
The ability of our borrowers to repay their obligations will likely be impacted by changes in future economic conditions, which in turn could impact the accuracy of our loss forecasts and allowance estimates.
Removed
Because our borrowers have increased credit risk, the actual rates of delinquencies, defaults, repossessions and losses on these loans are higher than those experienced in the general automobile finance industry and could be dramatically affected by a general economic downturn. In addition, our servicing costs may increase without a corresponding increase in our finance charge income.
Added
There is also the possibility that we have failed or will fail to accurately identify the appropriate economic indicators, to accurately estimate the timing of future changes in economic conditions, or to estimate accurately the impacts of future changes in economic conditions to our borrowers, which similarly could impact the accuracy of our loss forecasts and allowance estimates.
Removed
The bank closures in the first half of 2023 led to such disruption and volatility in the financial services industry generally, including deposit outflows and increasing liquidity needs at many regional banks, which led banking regulators to take extraordinary actions to insure otherwise uninsured deposit accounts at the closed banks and to permit such banks’ depositors to promptly access all funds on deposit.
Added
If the models, estimates, and assumptions we use to establish reserves or the judgments we make in extending credit to our borrowers prove inaccurate in predicting future events, we may suffer unexpected losses.
Removed
We believe that our current interest rate exposure is manageable and does not indicate any significant exposure to interest rate changes.
Added
The allowance for credit losses is our best estimate of expected credit losses; however, there is no guarantee that it will be sufficient to address credit losses, particularly if the economic outlook deteriorates significantly and quickly. In such an event, we may increase our allowance for credit losses, which would reduce our earnings.
Removed
To combat rising inflation, beginning in March 2022, the Federal Reserve began raising its benchmark federal funds interest rate at the fastest pace in over 40 years, increasing 425 basis points during 2022 and an additional 100 basis points in 2023.
Added
Additionally, to the extent that economic conditions worsen, impacting our consumer and commercial borrowers or underlying collateral, and credit losses are worse than expected, as may be caused by inflation, an economic recession or otherwise, we may increase our provision for loan losses, which could have an adverse effect on our business, financial condition, and results of operations.
Removed
Additionally, banks and other financial institutions with larger capitalization and financial intermediaries not subject to bank regulatory restrictions have larger lending limits and are thereby able to serve the credit needs of larger clients. These institutions may be able to offer the same loan products and services that we offer at more competitive rates and prices.
Added
We are unable to predict actual fluctuations of market interest rates because many factors influencing interest rates, including changes in economic conditions and the policies of the Federal Reserve and other governmental and regulatory agencies, are beyond our control. We believe that our current interest rate exposure is manageable.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeManagement is responsible for ensuring that such third parties use suitable information security controls when providing services to us. As part of the oversight of third-party service providers, management will determine whether cybersecurity risks are identified, measured, mitigated, monitored, and reported by such third parties. ​ ​ ​ ​ 32 Table of Contents
Biggest changeManagement is responsible for ensuring that such third parties use suitable information security controls when providing services to us. As part of the oversight of third-party service providers, management will determine whether cybersecurity risks are identified, measured, mitigated, monitored, and reported by such third parties. ​ ​ ​
To help carry out their responsibilities, Directors, management, and all employees are periodically trained to understand IT activities and risks, including cybersecurity risks. Management, via the Systems and IT Steering Committee and ISO, or combination, provides a status report to the Board of Directors at least annually, with more frequent communications as necessary.
To help carry out their responsibilities, Directors, management, and all employees are periodically trained to understand IT activities and risks, including cybersecurity risks. Management, via the Systems and IT Steering Committee and ISO, or a combination, provides a status report to the Board of Directors at least annually, with more frequent communications as necessary.
Additionally, the Corporation has established a comprehensive enterprise risk management program to monitor risks related to its operations, including cybersecurity risk, and the Corporation’s Chief Risk Officer has primary responsibility for the enterprise risk management program. Management also engages the services of third parties to assist the ISO with their tasks.
Additionally, the Corporation has established a comprehensive enterprise risk management program to monitor risks related to its operations, including cybersecurity risk, and the Corporation’s Chief Risk Officer has primary responsibility for the enterprise risk management program. Management also engages the services of third parties to assist the ISO with his tasks.
The Board of Directors and Audit Committee approve and periodically review and re-approve the ISP and other IT related policies. While the Board of Directors may delegate the design, implementation, and monitoring of certain IT activities to the CIO or designee, the full Board of Directors remains responsible for overseeing IT strategies and policies, including cybersecurity.
The Board of Directors and Audit Committee approve and periodically review and re-approve the ISP and other IT related policies. While the Board of Directors may delegate the design, implementation, and monitoring of certain IT activities to the CIO 32 Table of Contents or designee, the full Board of Directors remains responsible for overseeing IT strategies and policies, including cybersecurity.
The ISP is developed and maintained utilizing the Federal Financial Institutions Examination Council (FFIEC) Information 31 Table of Contents Technology Examination Handbook and represents the standards, policies, procedures, and guidelines defining the Corporation’s security requirements and related activities, which includes risk management and risk assessment practices.
The ISP is developed and maintained utilizing the Federal Financial Institutions Examination Council (FFIEC) Information Technology Examination Handbook and represents the standards, policies, procedures, and guidelines defining the Corporation’s security requirements and related activities, which includes risk management and risk assessment practices.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe operations center of C&F Bank, which includes the offices of the community banking segment’s loan, deposit and administrative functions, is located in Toano, Virginia. Additionally, the community banking segment operates 30 branch offices. The community banking segment also operates four regional commercial lending offices in Virginia, three of which are situated at bank branch locations.
Biggest changeThe operations center of C&F Bank, which includes the offices of the community banking segment’s loan, deposit and administrative functions, is located in Toano, Virginia. The community banking segment operates 30 additional branch offices and five regional commercial lending offices in Virginia, three of which are situated at bank branch locations.
Of the 32 locations used as bank branches or commercial lending offices, 25 are owned by the community banking segment and seven are leased from nonaffiliates. ​ The mortgage banking segment’s main administrative office and a loan production office are located in Midlothian, Virginia, in a building owned by C&F Bank that also houses a branch of C&F Bank.
Of the 33 locations used as bank branches or commercial lending offices, 25 are owned by the community banking segment and eight are leased from nonaffiliates. ​ The mortgage banking segment’s main administrative office and a loan production office are located in Midlothian, Virginia, in a building owned by C&F Bank that also houses a branch of C&F Bank.
ITEM 2. PROPERTIE S ​ The following describes the location and general character of the principal offices and other materially important physical properties of the Corporation. ​ The main office of C&F Bank is located in West Point, VA.
ITEM 2. PROPERTIE S ​ The following describes the location and general character of the principal offices and other materially important physical properties of the Corporation. ​ The main office, which operates as a branch office, of C&F Bank is located in West Point, VA.
In addition, the mortgage banking segment has 16 loan production offices, of which four in Virginia are located in C&F Bank branches and 12 are leased from nonaffiliates, including 10 in Virginia, one in North Carolina, and one in West Virginia. ​ The consumer finance segment’s headquarters and its loan and administrative functions and staff are located in Henrico, Virginia, in offices that are owned by C&F Finance. ​ All of the Corporation’s properties are in good operating condition and are adequate for the Corporation’s present and anticipated future needs. ​
In addition, the mortgage banking segment has 19 loan production offices, of which four in Virginia are located in C&F Bank branches and 15 are leased from nonaffiliates, including 14 in Virginia, four in North Carolina, and one in West Virginia. ​ The consumer finance segment’s headquarters and its loan and administrative functions and staff are located in Henrico, Virginia, in offices that are owned by C&F Finance. ​ All of the Corporation’s properties are in good operating condition and are adequate for the Corporation’s present and anticipated future needs. ​ 33 Table of Contents

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURE S ​ None. ​ 33 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS ​ ​ ​ ​ ​ Name (Age) Present Position Business Experience During Past Five Years ​ Thomas F.
Biggest changeITEM 4. MINE SAFETY DISCLOSURE S ​ None. ​ INFORMATION ABOUT OUR EXECUTIVE OFFICERS ​ ​ ​ ​ ​ Name (Age) Present Position ​ ​ ​ Business Experience During Past Five Years ​ ​ ​ Thomas F.
Cherry (56) President and Chief Executive Officer ​ Chief Executive Officer of the Corporation and C&F Bank since 2019; President of the Corporation and C&F Bank since 2014; Director of the Corporation and C&F Bank since 2015; Secretary of the Corporation and C&F Bank from 2002 to 2018; Chief Financial Officer of the Corporation and C&F Bank from 2004 to 2016 ​ Larry G.
Cherry (57) President and Chief Executive Officer ​ Chief Executive Officer of the Corporation and C&F Bank since 2019; President of the Corporation and C&F Bank since 2014; Director of the Corporation and C&F Bank since 2015; Secretary of the Corporation and C&F Bank from 2002 to 2018; Chief Financial Officer of the Corporation and C&F Bank from 2004 to 2016 ​ Larry G.
Long (45) Executive Vice President, Chief Financial Officer and Secretary ​ Executive Vice President and Chief Financial Officer of the Corporation and C&F Bank since 2020; Senior Vice President and Chief Financial Officer of the Corporation and C&F Bank from 2016 to 2020; Secretary of the Corporation and C&F Bank since 2019 ​ ​ ​ Mark A.
Long (46) Executive Vice President, Chief Financial Officer and Secretary ​ Executive Vice President and Chief Financial Officer of the Corporation and C&F Bank since 2020; Senior Vice President and Chief Financial Officer of the Corporation and C&F Bank from 2016 to 2020; Secretary of the Corporation and C&F Bank since 2019 ​ ​ ​ Mark A.
Dillon (72) Executive Chairman ​ Chairman of the Board of Directors of the Corporation and C&F Bank since 1989; Chief Executive Officer of the Corporation and C&F Bank from 1989 to 2018; President of the Corporation and C&F Bank from 1989 to 2014 ​ Jason E.
Dillon (73) Executive Chairman ​ Chairman of the Board of Directors of the Corporation and C&F Bank since 1989; Chief Executive Officer of the Corporation and C&F Bank from 1989 to 2018; President of the Corporation and C&F Bank from 1989 to 2014 ​ Jason E.
Fox (59) President and Chief Executive Officer, C&F Mortgage ​ President and Chief Executive Officer of C&F Mortgage beginning January 1, 2025; Executive Vice President, Chief Operating Officer of C&F Mortgage from 2005 to 2024, Chief Financial Officer of C&F Mortgage from 1995 to 2005 ​ ​ ​ S.
Fox (60) President and Chief Executive Officer, C&F Mortgage ​ President and Chief Executive Officer of C&F Mortgage beginning January 1, 2025; Executive Vice President, Chief Operating Officer of C&F Mortgage from 2005 to 2024, Chief Financial Officer of C&F Mortgage from 1995 to 2005 ​ ​ ​ S.
Dustin Crone (56) President and Chief Executive Officer, C&F Finance ​ Chief Executive Officer of C&F Finance since 2020; President of C&F Finance since 2010 ​ ​ ​ John A.
Dustin Crone (57) President and Chief Executive Officer, C&F Finance ​ Chief Executive Officer of C&F Finance since 2020; President of C&F Finance since 2010 ​ ​ ​ John A.
Seaman, III (67) Executive Vice President and Chief Credit Officer, C&F Bank ​ Executive Vice President and Chief Credit Officer of C&F Bank since 2011 ​ ​ PART I I ​
Seaman, III (68) Executive Vice President and Chief Credit Officer, C&F Bank ​ Executive Vice President and Chief Credit Officer of C&F Bank since 2011 ​ ​ 34 Table of Contents PART I I ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThere can be no assurance that the Corporation’s stock performance in the future will continue with the same or similar trends depicted in the graph below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 ​ 12/31/2023 12/31/2024 C&F Financial Corporation ​ ​ 100.00 ​ ​ 70.12 ​ ​ 99.74 ​ ​ 117.17 ​ ​ 141.41 ​ ​ 152.50 NASDAQ Composite Index ​ ​ 100.00 ​ ​ 144.92 ​ ​ 177.06 ​ ​ 119.45 ​ ​ 172.77 ​ ​ 223.87 2024 Peer Group ​ ​ 100.00 ​ ​ 77.82 ​ ​ 105.22 ​ ​ 104.82 ​ ​ 102.58 ​ ​ 113.87 2023 Peer Group ​ ​ 100.00 ​ ​ 77.91 ​ ​ 103.83 ​ ​ 104.87 ​ ​ 103.95 ​ ​ 114.02 ​ The 2024 Peer Group consists of entities that meet the following criteria: (i) publicly-traded commercial financial institution headquartered in Virginia, Maryland, North Carolina, South Carolina, Tennessee, Pennsylvania, New Jersey, Ohio, Indiana, Georgia, Florida, and Alabama (excluding certain large metropolitan areas that are not similar to the economic markets served by the Corporation) and (ii) total assets as of December 31, 2023 of between $1.2 billion and $5.0 billion.
Biggest changeThere can be no assurance that the Corporation’s stock performance in the future will continue with the same or similar trends depicted in the graph below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index ​ ​ ​ 12/31/2020 ​ ​ ​ 12/31/2021 ​ ​ ​ 12/31/2022 ​ ​ ​ 12/31/2023 ​ 12/31/2024 ​ ​ ​ 12/31/2025 C&F Financial Corporation ​ ​ 100.00 ​ ​ 142.26 ​ ​ 167.12 ​ ​ 201.69 ​ ​ 217.49 ​ ​ 227.52 NASDAQ Composite Index ​ ​ 100.00 ​ ​ 122.18 ​ ​ 82.43 ​ ​ 119.22 ​ ​ 154.48 ​ ​ 187.14 2025 Peer Group ​ ​ 100.00 ​ ​ 138.24 ​ ​ 133.72 ​ ​ 131.02 ​ ​ 142.99 ​ ​ 161.01 2024 Peer Group ​ ​ 100.00 ​ ​ 135.21 ​ ​ 134.70 ​ ​ 131.82 ​ ​ 146.33 ​ ​ 163.33 ​ The 2025 Peer Group consists of entities that meet the following criteria: (i) publicly-traded commercial financial institution headquartered in Virginia, Maryland, North Carolina, South Carolina, Tennessee, Pennsylvania, New Jersey, Ohio, Indiana, Georgia, Florida, and Alabama (excluding certain large metropolitan areas that are not similar to the economic markets served by the Corporation) and (ii) total assets as of December 31, 2024 of between $1.2 billion and $5.0 billion.
Repurchases under the 2025 Repurchase Program may be made through privately negotiated transactions or open market transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and shares repurchased will be returned to the status of authorized and unissued shares of common stock.
Repurchases under the 2026 Repurchase Program may be made through privately negotiated transactions or open market transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and shares repurchased will be returned to the status of authorized and unissued shares of common stock.
The 2023 Peer Group consisted of entities that met the following criteria: (i) publicly-traded commercial financial institution headquartered in Virginia, Maryland, North Carolina, West Virginia, South Carolina, Tennessee, Pennsylvania, New Jersey, Ohio, Indiana, Georgia, Florida and Alabama (excluding certain large metropolitan areas that are not similar to the economic markets served by the Corporation) and (ii) total assets as of December 31, 2022 of between $1.2 billion and $5.0 billion.
The 2024 Peer Group consisted of entities that met the following criteria: (i) publicly-traded commercial financial institution headquartered in Virginia, Maryland, North Carolina, South Carolina, Tennessee, Pennsylvania, New Jersey, Ohio, Indiana, Georgia, Florida and Alabama (excluding certain large metropolitan areas that are not similar to the economic markets served by the Corporation) and (ii) total assets as of December 31, 2023 of between $1.2 billion and $5.0 billion.
As of that date, the closing price of our common stock on the NASDAQ Global Select Stock Market was $76.29. ​ Payment of dividends is at the discretion of the Corporation’s Board of Directors and is subject to various federal and state regulatory limitations. For further information regarding payment of dividends refer to Item 1.
As of that date, the closing price of our common stock on the NASDAQ Global Select Stock Market was $72.82. ​ Payment of dividends is at the discretion of the Corporation’s Board of Directors and is subject to various federal and state regulatory limitations. For further information regarding payment of dividends refer to Item 1.
In 2024, the Corporation changed the composition of the peer group used to evaluate financial performance of the Corporation primarily to reflect consolidation within the banking industry.
In 2025, the Corporation changed the composition of the peer group used to evaluate financial performance of the Corporation primarily to reflect consolidation within the banking industry.
“Business,” under the heading “Regulation and Supervision–­­Limits on Dividends.” In making its decision on the payment of dividends on the Corporation’s common stock, the Corporation’s Board of Directors considers operating results, financial condition, capital adequacy, regulatory requirements, shareholder returns, and other factors. ​ 34 Table of Contents Issuer Purchases of Equity Securities ​ The Corporation’s Board of Directors authorized a program, effective January 1, 2024 through December 31, 2024, to repurchase up to $10.0 million of the Corporation’s common stock (the 2024 Repurchase Program).
“Business,” under the heading “Regulation and Supervision–­­Limits on Dividends.” In making its decision on the payment of dividends on the Corporation’s common stock, the Corporation’s Board of Directors considers operating results, financial condition, capital adequacy, regulatory requirements, shareholder returns, and other factors. ​ Issuer Purchases of Equity Securities ​ The Corporation’s Board of Directors authorized a program, effective January 1, 2025 through December 31, 2025, to repurchase up to $5.0 million of the Corporation’s common stock (the 2025 Repurchase Program).
The graph assumes $100 invested on December 31, 2019 in the Corporation, the NASDAQ Composite Index and the Peer Group, and shows the total return on such an investment as of December 31, 2024, assuming reinvestment of dividends.
The graph assumes $100 invested on December 31, 2020 in the Corporation, the NASDAQ Composite Index and the Peer Group, and shows the total return on such an investment as of December 31, 2025, assuming reinvestment of dividends.
Performance of the 2024 Peer Group is presented on a weighted basis according to each peer financial institution’s market capitalization as of December 31, 2019. 36 Table of Contents The following financial institutions were included in the 2024 Peer Group: ​ ​ ​ ​ ​ ​ ACNB Corporation ​ First Bank ​ Norwood Financial Corp.
Performance of the 2024 Peer Group is presented on a weighted basis according to each peer financial institution’s market capitalization as of December 31, 2020. ​ The following financial institutions were included in the 2024 Peer Group: ​ ​ ​ ​ ​ ​ ACNB Corporation ​ First Bank ​ Norwood Financial Corp.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ The Corporation’s common stock is listed for trading on the NASDAQ Global Select Market of the NASDAQ Stock Market under the symbol “CFFI.” As of February 24, 2025, there were approximately 2,500 shareholders of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ The Corporation’s common stock is listed for trading on the NASDAQ Global Select Market of the NASDAQ Stock Market under the symbol “CFFI.” As of February 27, 2026, there were approximately 3,500 shareholders of our common stock.
The 2023 Peer Group consisted of 53 publicly-traded commercial financial institutions with a median asset size of $2.2 billion based on total assets as of December 31, 2022.
The 2025 Peer Group consisted of 46 publicly-traded commercial financial institutions with a median asset size of $2.2 billion based on total assets as of December 31, 2024.
The timing, number and purchase price of shares repurchased under repurchase programs, if any, will be determined by management in its discretion and will depend on a number of factors, including the market price of the shares, general market and economic conditions, applicable legal requirements and other conditions, and there is no assurance that the Corporation will purchase any shares under repurchase programs. ​ The following table summarizes repurchases of the Corporation’s common stock that occurred during the three months ended December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum Number ​ ​ ​ ​ ​ ​ ​ ​ ​ (or Approximate ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Dollar Value) of ​ ​ ​ ​ ​ ​ ​ Shares Purchased as ​ Shares that May Yet ​ ​ ​ ​ ​ ​ ​ Part of Publicly ​ Be Purchased ​ ​ Total Number of ​ Average Price Paid ​ Announced Plans or ​ Under the Plans or ​ ​ Shares Purchased 1 ​ per Share ​ Programs ​ Programs October 1, 2024 - October 31, 2024 ​ 9,629 ​ $ 60.86 ​ 9,600 ​ $ 2,146,531 ​ November 1, 2024 - November 30, 2024 ​ 1,500 ​ $ 62.89 ​ 1,500 ​ $ 2,052,191 ​ December 1, 2024 - December 31, 2024 ​ 4,592 ​ $ 71.95 ​ — ​ $ — ​ Total 15,721 ​ $ 64.29 11,100 ​ ​ ​ ​ 1 During the three months ended December 31, 2024, 4,621 shares were withheld upon the vesting of restricted shares granted to employees of the Corporation and its subsidiaries in order to satisfy tax withholding obligations. ​ ​ 35 Table of Contents Five-Year Stock Performance ​ The following graph compares the yearly cumulative total shareholder return on the common stock of the Corporation with the yearly cumulative total shareholder return on stock included in (1) the NASDAQ Composite Index and (2) a group of peer commercial financial institutions identified by the Corporation for 2024 (the 2024 Peer Group) and for 2023 (the 2023 Peer Group).
The timing, number and purchase price of shares repurchased under repurchase programs, if any, will be determined by management in its discretion and will depend on a number of factors, including the market price of the shares, general market and economic conditions, applicable legal requirements and other conditions, and there is no assurance that the Corporation will purchase any shares under repurchase programs. ​ The following table summarizes repurchases of the Corporation’s common stock that occurred during the three months ended December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum Number ​ ​ ​ ​ ​ ​ ​ ​ ​ (or Approximate ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Dollar Value) of ​ ​ ​ ​ ​ ​ ​ Shares Purchased as ​ Shares that May Yet ​ ​ ​ ​ ​ ​ ​ Part of Publicly ​ Be Purchased ​ ​ Total Number of ​ Average Price Paid ​ Announced Plans or ​ Under the Plans or Period ​ Shares Purchased 1 ​ per Share ​ Programs ​ Programs October 1, 2025 - October 31, 2025 ​ — ​ $ — ​ — ​ $ 5,000,000 ​ November 1, 2025 - November 30, 2025 ​ — ​ $ — ​ — ​ $ 5,000,000 ​ December 1, 2025 - December 31, 2025 ​ 7,306 ​ $ 69.47 ​ — ​ $ — ​ Total 7,306 ​ $ 69.47 — ​ ​ ​ ​ 1 During the three months ended December 31, 2025, 7,306 shares were withheld upon the vesting of restricted shares granted to employees of the Corporation and its subsidiaries in order to satisfy tax withholding obligations. ​ ​ 35 Table of Contents Five-Year Stock Performance ​ The following graph compares the yearly cumulative total shareholder return on the common stock of the Corporation with the yearly cumulative total shareholder return on stock included in (1) the NASDAQ Composite Index and (2) a group of peer commercial financial institutions identified by the Corporation for 2025 (the 2025 Peer Group) and for 2024 (the 2024 Peer Group).
Performance of the 2023 Peer Group is presented on a weighted basis according to each peer financial institution’s market capitalization as of December 31, 2019. ​ The following financial institutions were included in the 2023 Peer Group: ​ ​ ​ ​ ​ ​ ACNB Corporation ​ Fidelity D & D Bancorp, Inc. ​ Ohio Valley Banc Corp.
Performance of the 2025 Peer Group is presented on a weighted basis according to each peer financial institution’s market capitalization as of December 31, 2020. 36 Table of Contents The following financial institutions were included in the 2025 Peer Group: ​ ​ ​ ​ ​ ​ ACNB Corporation ​ F & M Bank Corp. ​ Meridian Corporation AmeriServ Financial, Inc. ​ Farmers & Merchants Bancorp, Inc. ​ MetroCity Bankshares, Inc.
As of December 31, 2024, the Corporation made aggregate common stock repurchases of 160,694 shares, or $7.9 million, under the 2024 Repurchase Program. ​ The Corporation’s Board of Directors authorized a program, effective January 1, 2025 through December 31, 2025, to repurchase up to $5.0 million of the Corporation’s common stock (the 2025 Repurchase Program).
During the year ended December 31, 2025, the Corporation did not make any repurchases of its common stock under the 2025 Repurchase Program. ​ The Corporation’s Board of Directors authorized a program, effective January 1, 2026 through December 31, 2026, to repurchase up to $5.0 million of the Corporation’s common stock (the 2026 Repurchase Program).
Capital City Bank Group, Inc. ​ First Savings Financial Group, Inc. ​ Peoples Financial Services Corp. CapStar Financial Holdings, Inc. ​ First United Corporation ​ Primis Financial Corp. Carter Bankshares, Inc. ​ FNCB Bancorp, Inc. ​ Princeton Bancorp, Inc. CB Financial Services, Inc. ​ Franklin Financial Services Corporation ​ Richmond Mutual Bancorporation, Inc.
Capital City Bank Group, Inc. ​ First Community Corporation ​ Parke Bancorp, Inc. Carter Bankshares, Inc. ​ First National Corporation ​ Peoples Bancorp of North Carolina, Inc. CB Financial Services, Inc. ​ First United Corporation ​ Primis Financial Corp. CF Bankshares Inc. ​ Franklin Financial Services Corporation ​ Princeton Bancorp, Inc.
Farmers & Merchants Bancorp, Inc. ​ Middlefield Banc Corp. ​ Southern States Bancshares, Inc. Fidelity D & D Bancorp, Inc. ​ National Bankshares, Inc. ​ Virginia National Bankshares Corporation ​ Previously, the Corporation reported a different group of peer companies.
Farmers & Merchants Bancorp, Inc. ​ Middlefield Banc Corp. ​ Southern States Bancshares, Inc. Fidelity D & D Bancorp, Inc. ​ National Bankshares, Inc. ​ Virginia National Bankshares Corporation ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ITEM 6. [RESERVED] ​ 37 Table of Contents
CF Bankshares Inc. ​ FVCBankcorp, Inc. ​ River Financial Corporation Citizens & Northern Corporation ​ HomeTrust Bancshares, Inc. ​ SB Financial Group, Inc. Citizens Financial Services, Inc. ​ John Marshall Bancorp, Inc. ​ Security Federal Corporation Civista Bancshares, Inc. ​ LCNB Corp. ​ SmartFinancial, Inc. Codorus Valley Bancorp, Inc. ​ MainStreet Bancshares, Inc. ​ Southern First Bancshares, Inc.
Chain Bridge Bancorp, Inc. ​ FVCBankcorp, Inc. ​ Richmond Mutual Bancorporation, Inc. Citizens & Northern Corp. ​ HomeTrust Bancshares, Inc. ​ SB Financial Group, Inc. Citizens Financial Services, Inc. ​ John Marshall Bancorp, Inc. ​ Southern First Bancshares, Inc.
Removed
American National Bankshares Inc. ​ First Community Bankshares, Inc. ​ Old Point Financial Corporation AmeriServ Financial, Inc. ​ First Community Corporation ​ Orrstown Financial Services, Inc. Blue Ridge Bankshares, Inc. ​ First Financial Corporation ​ Penns Woods Bancorp, Inc. Burke & Herbert Financial Services Corp. ​ First National Corporation ​ Peoples Bancorp of North Carolina, Inc.
Added
BayFirst Financial Corp. ​ Fidelity D & D Bancorp, Inc. ​ Middlefield Banc Corp. Blue Foundry Bancorp ​ Finward Bancorp ​ National Bankshares, Inc. Blue Ridge Bankshares, Inc. ​ First Bank ​ Norwood Financial Corp. Capital Bancorp, Inc. ​ First Community Bankshares, Inc. ​ Ohio Valley Banc Corp.
Removed
Colony Bankcorp, Inc. ​ Mid Penn Bancorp, Inc. ​ Southern States Bancshares, Inc. Eagle Financial Services, Inc. ​ Middlefield Banc Corp. ​ Summit Financial Group, Inc. F & M Bank Corp. ​ National Bankshares, Inc. ​ Virginia National Bankshares Corporation Farmers & Merchants Bancorp, Inc. ​ Norwood Financial Corp. ​ ​ ​ ​ ​ ​ ​ ​ ITEM 6.
Added
Civista Bancshares, Inc. ​ LCNB Corp. ​ Virginia National Bankshares Corporation Colony Bankcorp, Inc. ​ LINKBANCORP, Inc. ​ ​ Eagle Financial Services, Inc. ​ MainStreet Bancshares, Inc. ​ ​ ​ Previously, the Corporation reported a different group of peer companies.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeITEM 6. RESERVED ​ 37 ​ ​ ​ ​ ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ 38 ​ ​ ​ ​ ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ​ 79 ​ ​ ​ ​ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ 82 ​ ​ ​ ​
Biggest changeITEM 6. [ RESERVED ] ​ 37 ​ ​ ​ ​ ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ 38 ​ ​ ​ ​ ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ​ 77 ​ ​ ​ ​ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ 80 ​ ​ ​ ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

156 edited+38 added−44 removed131 unchanged
Biggest changeBranch consolidation are gains recognized on the sale of former bank branch locations subsequent to consolidation into nearby branches and are net of related income taxes of $61,000 for the year ended December 31, 2022. ​ ​ ​ 76 Table of Contents TABLE 25: Non-GAAP Table ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For The Year Ended ​ ​ ​ ​ December 31, ​ (Dollars in thousands, except per share amounts) ​ ​ 2024 ​ 2023 ​ 2022 ​ Adjusted ROE ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average total equity, as reported ​ ​ $ 220,856 ​ $ 203,261 ​ $ 197,876 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ROE, as reported ​ ​ ​ 9.02 % ​ 11.68 % ​ 14.84 % Adjusted ROE ​ ​ ​ 9.05 % ​ 11.68 % ​ 13.64 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted ROA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average total assets, as reported ​ ​ $ 2,494,496 ​ $ 2,393,497 ​ $ 2,319,683 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ROA, as reported ​ ​ ​ 0.80 % ​ 0.99 % ​ 1.27 % Adjusted ROA ​ ​ ​ 0.80 % ​ 0.99 % ​ 1.16 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on Average Tangible Common Equity and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Return on Average Tangible Common Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average total equity, as reported ​ ​ $ 220,856 ​ $ 203,261 ​ $ 197,876 ​ Average goodwill ​ ​ ​ (25,191) ​ ​ (25,191) ​ ​ (25,191) ​ Average other intangible assets ​ ​ ​ (1,273) ​ ​ (1,538) ​ ​ (1,820) ​ Average noncontrolling interest ​ ​ ​ (649) ​ ​ (675) ​ ​ (737) ​ Average tangible common equity ​ ​ $ 193,743 ​ $ 175,857 ​ $ 170,128 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ ​ $ 19,918 ​ $ 23,746 ​ $ 29,369 ​ Amortization of intangibles ​ ​ ​ 260 ​ ​ 273 ​ ​ 298 ​ Net income attributable to noncontrolling interest ​ ​ ​ (84) ​ ​ (142) ​ ​ (210) ​ Net tangible income attributable to C&F Financial Corporation ​ ​ $ 20,094 ​ $ 23,877 ​ $ 29,457 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted net income ​ ​ $ 19,993 ​ $ 23,746 ​ $ 26,990 ​ Amortization of intangibles ​ ​ ​ 260 ​ ​ 273 ​ ​ 298 ​ Net income attributable to noncontrolling interest ​ ​ ​ (84) ​ ​ (142) ​ ​ (210) ​ Adjusted net tangible income attributable to C&F Financial Corporation ​ ​ $ 20,169 ​ $ 23,877 ​ $ 27,078 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average tangible common equity ​ ​ ​ 10.37 % ​ 13.58 % ​ 17.31 % Adjusted return on average tangible common equity ​ ​ ​ 10.41 % ​ 13.58 % ​ 15.92 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For The Year Ended (Dollars in thousands, except per share amounts) ​ ​ December 31, Fully Taxable Equivalent Net Interest Income ​ ​ 2024 ​ 2023 ​ 2022 Interest income on loans ​ ​ $ 127,089 ​ $ 110,938 ​ $ 90,833 FTE adjustment ​ ​ ​ 199 ​ ​ 208 ​ ​ 154 FTE interest income on loans ​ ​ $ 127,288 ​ $ 111,146 ​ $ 90,987 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income on securities ​ ​ $ 11,131 ​ $ 11,954 ​ $ 9,243 FTE adjustment ​ ​ ​ 948 ​ ​ 756 ​ ​ 431 FTE interest income on securities ​ ​ $ 12,079 ​ $ 12,710 ​ $ 9,674 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest income ​ ​ $ 139,594 ​ $ 124,137 ​ $ 101,354 FTE adjustment ​ ​ ​ 1,147 ​ ​ 964 ​ ​ 585 FTE interest income ​ ​ $ 140,741 ​ $ 125,101 ​ $ 101,939 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ ​ $ 96,775 ​ $ 97,707 ​ $ 93,464 FTE adjustment ​ ​ ​ 1,147 ​ ​ 964 ​ ​ 585 FTE net interest income ​ ​ $ 97,922 ​ $ 98,671 ​ $ 94,049 ​ 77 Table of Contents TABLE 25: Non-GAAP Table ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands, except per share amounts) ​ ​ December 31, Tangible Book Value Per Share ​ ​ 2024 ​ 2023 Equity attributable to C&F Financial Corporation ​ ​ $ 226,360 ​ $ 216,878 Less goodwill ​ ​ ​ (25,191) ​ ​ (25,191) Less other intangible assets ​ ​ ​ (1,147) ​ ​ (1,407) Tangible equity attributable to C&F Financial Corporation ​ ​ $ 200,022 ​ $ 190,280 ​ ​ ​ ​ ​ ​ ​ ​ Shares outstanding ​ ​ ​ 3,233,672 ​ ​ 3,374,098 ​ ​ ​ ​ ​ ​ ​ ​ Book value per share ​ ​ $ 70.00 ​ $ 64.28 Tangible book value per share ​ ​ $ 61.86 ​ $ 56.40 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 78 Table of Contents
Biggest changeThese non-GAAP financial measures should not be considered an alternative to, or more important than, GAAP-basis financial statements, and other bank holding companies may define or calculate these or similar measures differently. 75 Table of Contents 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. ​ ​ ​ ​ TABLE 25: Non-GAAP Table ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For The Year Ended ​ ​ ​ ​ December 31, ​ (Dollars in thousands, except per share amounts) ​ ​ 2025 ​ 2024 ​ 2023 ​ Reconciliation of Certain Non-GAAP Financial Measures ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on Average Tangible Common Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average total equity, as reported ​ ​ $ 243,033 ​ $ 220,856 ​ $ 203,261 ​ Average goodwill ​ ​ ​ (25,191) ​ ​ (25,191) ​ ​ (25,191) ​ Average other intangible assets ​ ​ ​ (1,017) ​ ​ (1,273) ​ ​ (1,538) ​ Average noncontrolling interest ​ ​ ​ (693) ​ ​ (649) ​ ​ (675) ​ Average tangible common equity ​ ​ $ 216,132 ​ $ 193,743 ​ $ 175,857 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ ​ $ 26,991 ​ $ 19,918 ​ $ 23,746 ​ Amortization of intangibles ​ ​ ​ 238 ​ ​ 260 ​ ​ 273 ​ Net income attributable to noncontrolling interest ​ ​ ​ (156) ​ ​ (84) ​ ​ (142) ​ Net tangible income attributable to C&F Financial Corporation ​ ​ $ 27,073 ​ $ 20,094 ​ $ 23,877 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average equity, as reported ​ ​ ​ 11.11 % ​ 9.02 % ​ 11.68 % Return on average tangible common equity ​ ​ ​ 12.53 % ​ 10.37 % ​ 13.58 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For The Year Ended (Dollars in thousands, except per share amounts) ​ ​ December 31, Fully Taxable Equivalent Net Interest Income 1 ​ ​ 2025 ​ 2024 ​ 2023 Interest and fees on loans ​ ​ $ 135,623 ​ $ 127,089 ​ $ 110,938 FTE adjustment ​ ​ ​ 198 ​ ​ 199 ​ ​ 208 FTE interest and fees on loans ​ ​ $ 135,821 ​ $ 127,288 ​ $ 111,146 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest and dividends on securities ​ ​ $ 13,378 ​ $ 11,131 ​ $ 11,954 FTE adjustment ​ ​ ​ 1,037 ​ ​ 948 ​ ​ 756 FTE interest and dividends on securities ​ ​ $ 14,415 ​ $ 12,079 ​ $ 12,710 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest income ​ ​ $ 151,499 ​ $ 139,594 ​ $ 124,137 FTE adjustment ​ ​ ​ 1,235 ​ ​ 1,147 ​ ​ 964 FTE interest income ​ ​ $ 152,734 ​ $ 140,741 ​ $ 125,101 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ ​ $ 106,210 ​ $ 96,775 ​ $ 97,707 FTE adjustment ​ ​ ​ 1,235 ​ ​ 1,147 ​ ​ 964 FTE net interest income ​ ​ $ 107,445 ​ $ 97,922 ​ $ 98,671 1.
The release of indemnification reserves in 2024 and 2023 was due primarily to improvement in the mortgage banking segment’s assessment of borrower payment performance, lower volume of mortgage loan originations in recent years and other factors affecting expected losses on mortgage loans sold in the secondary market, such as time since origination.
The release of indemnification reserves in 2025, 2024 and 2023 was due primarily to lower volume of mortgage loan originations in recent years, 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, such as time since origination.
During the year ended December 31, 2024, the Corporation repurchased 160,694 shares, or $7.9 million, of its common stock under the 2024 Repurchase Program. ​ In December 2024, the Board of Directors authorized a new program, effective January 1, 2025 through December 31, 2025, to repurchase up to $5.0 million of the Corporation’s common stock (the 2025 Repurchase Program).
During the year ended December 31, 2024, the Corporation repurchased 160,694 shares, or $7.9 million, of its common stock under the 2024 Repurchase Program. ​ In December 2024, the Board of Directors authorized a program, effective January 1, 2025 through December 31, 2025, to repurchase up to $5.0 million of the Corporation’s common stock (the 2025 Repurchase Program).
In addition, there is risk associated with the value 53 Table of Contents of collateral other than real estate which may depreciate over time and cannot be appraised with as much precision. ● Consumer loans are comprised primarily of residential mortgage loans and home equity lines secured by residential real estate and carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral. ● Consumer finance loans are comprised of indirect financing for purchases of automobiles and marine and RVs and carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral, which are typically rapidly-depreciating vehicles.
In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time and cannot be appraised with as much precision. ● Consumer loans are comprised primarily of residential mortgage loans and home equity lines secured by residential real estate and carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral. 54 Table of Contents ● Consumer finance loans are comprised of indirect financing for purchases of automobiles and marine and RVs and carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral, which are typically rapidly-depreciating vehicles.
Because these loans are usually larger in amount and involve more risk than consumer lot loans, we carefully evaluate the borrower’s assumptions and projections about market conditions and absorption rates in the community in which the property is located and the borrower’s ability to carry the loan if the borrower’s assumptions prove inaccurate. ​ 66 Table of Contents Builder Lines ​ The community banking segment offers builder lines of credit to residential home builders to support their land and lot inventory needs.
Because these loans are usually larger in amount and involve more risk than consumer lot loans, we carefully evaluate the borrower’s assumptions and projections about market conditions and absorption rates in the community in which the property is located and the borrower’s ability to carry the loan if the borrower’s assumptions prove inaccurate. ​ 65 Table of Contents Builder Lines ​ The community banking segment offers builder lines of credit to residential home builders to support their land and lot inventory needs.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Income Taxes” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 , which was filed with the SEC on February 27, 2024, and is incorporated herein by reference. ​ BUSINESS SEGMENTS ​ The Corporation operates in a decentralized manner in three business segments: community banking, mortgage banking and consumer finance.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Income Taxes” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 , which was filed with the SEC on February 27, 2025 and is incorporated herein by reference. ​ BUSINESS SEGMENTS ​ The Corporation operates in a decentralized manner in three business segments: community banking, mortgage banking and consumer finance.
For consumer finance loans, cash flow projections and estimated expected losses reflect historical average loss experience based on internal observations for automobile loans and based on external loss observations for marine and recreational vehicle (RV) loans. ​ Management’s estimate of the allowance for credit losses on loans that are collectively evaluated also includes a qualitative assessment of available information relevant to assessing collectability that is not captured in the loss estimation process.
For consumer finance loans, cash flow projections and estimated expected losses reflect historical average loss experience based on internal observations for automobile loans and based on external loss observations for marine and RV loans. ​ Management’s estimate of the allowance for credit losses on loans that are collectively evaluated also includes a qualitative assessment of available information relevant to assessing collectability that is not captured in the loss estimation process.
If market interest rates were to rise, net interest margin could be positively affected in the short term as the Corporation generally expects its assets to reprice upward more quickly than its deposits and borrowings. ​ Discussion of net interest income for the year ended December 31, 2022 has been omitted as such discussion was provided in Part II, Item 7.
If market interest rates were to rise, net interest margin could be positively affected in the short term as the Corporation generally expects its assets to reprice upward more quickly than its deposits and borrowings. ​ Discussion of net interest income for the year ended December 31, 2023 has been omitted as such discussion was provided in Part II, Item 7.
The community banking segment also makes construction loans for office and warehouse facilities and other nonresidential projects, generally limited to borrowers that present other business opportunities for the community banking segment. ​ 65 Table of Contents The amounts, interest rates and terms for construction loans vary, depending upon market conditions, the size and complexity of the project, and the financial strength of the borrower and any guarantors of the loan.
The community banking segment also makes construction loans for office and warehouse facilities and other nonresidential projects, generally limited to borrowers that present other business opportunities for the community banking segment. ​ 64 Table of Contents The amounts, interest rates and terms for construction loans vary, depending upon market conditions, the size and complexity of the project, and the financial strength of the borrower and any guarantors of the loan.
Unrealized gains and losses on investments held in the Corporation’s rabbi trust are offset by changes in deferred compensation liabilities, recorded in salaries and employee benefits expense. ​ Discussion of noninterest income for the year ended December 31, 2022 has been omitted as such discussion was provided in Part II, Item 7.
Unrealized gains and losses on investments held in the Corporation’s rabbi trust are offset by changes in deferred compensation liabilities, recorded in salaries and employee benefits expense. ​ Discussion of noninterest income for the year ended December 31, 2023 has been omitted as such discussion was provided in Part II, Item 7.
If loan performance deteriorates resulting in further elevated delinquencies or net charge-offs, the provision for credit losses may increase in future periods. ​ Discussion of the consumer finance segment for the year ended December 31, 2022 has been omitted as such discussion was provided in Part II, Item 7.
If loan performance deteriorates resulting in further elevated delinquencies or net charge-offs, the provision for credit losses may increase in future periods. ​ Discussion of the consumer finance segment for the year ended December 31, 2023 has been omitted as such discussion was provided in Part II, Item 7.
We manage this risk by lending to experienced builders and by using specific underwriting policies and procedures for these types of loans. ​ Residential Mortgage – Held for Investment ​ The community banking segment originates residential mortgage loans secured by first and second liens on properties located in its primary market areas in eastern and central Virginia.
We manage this risk by lending to experienced builders and by using specific underwriting policies and procedures for these types of loans. ​ Residential Mortgage – Held for Investment ​ The community banking segment originates residential mortgage loans secured by first and second liens on properties located in its primary market areas in Virginia.
The preferred automobile is a later model, low mileage used vehicle because the value of new vehicles typically depreciates rapidly. In addition to automobile financing, marine and RV loan contracts are also purchased on an indirect basis through a referral program administered by a third party.
The preferred automobile is a later model, low mileage used vehicle because the value of new vehicles typically depreciates rapidly. In addition to automobile financing, marine and RV loan contracts were also purchased on an indirect basis through a referral program administered by a third party.
In the last evaluation of goodwill at the community banking segment and the consumer finance segment, which was the annual evaluation in the fourth quarter of 2024, the Corporation concluded that no impairment existed based on an assessment of qualitative factors. ​ For further information concerning accounting policies, refer to Item 8.
In the last evaluation of goodwill at the community banking segment and the consumer finance segment, which was the annual evaluation in the fourth quarter of 2025, the Corporation concluded that no impairment existed based on an assessment of qualitative factors. ​ For further information concerning accounting policies, refer to Item 8.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Noninterest Expense” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 , which was filed with the SEC on February 27, 2024, and is incorporated herein by reference. ​ INCOME TAXES ​ Income tax expense on 2024 earnings was $4.2 million, resulting in an effective tax rate of 17.5 percent, compared with $5.4 million, or 18.6 percent, in 2023.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Noninterest Expense” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 , which was filed with the SEC on February 27, 2025, and is incorporated herein by reference. ​ INCOME TAXES ​ Income tax expense on 2025 earnings was $6.1 million, resulting in an effective tax rate of 18.4 percent, compared with $4.2 million, or 17.5 percent, in 2024.
All regulatory capital ratios of the Bank were in excess of mandated minimum requirements at December 31, 2024 and 2023. ​ In addition to the regulatory risk-based capital requirements, the Bank must maintain a capital conservation buffer of additional capital of 2.5 percent of risk-weighted assets as required by the Basel III Final Rule.
All regulatory capital ratios of the Bank were in excess of mandated minimum requirements at December 31, 2025 and 2024. ​ In addition to the regulatory risk-based capital requirements, the Bank must maintain a capital conservation buffer of additional capital of 2.5 percent of risk-weighted assets as required by the Basel III Final Rule.
Management believes that the level of the allowance for credit losses is adequate to reflect the net amount expected to be collected. ​ Discussion of the community banking segment for the year ended December 31, 2022 has been omitted as such discussion was provided in Part II, Item 7.
Management believes that the level of the allowance for credit losses is adequate to reflect the net amount expected to be collected. ​ Discussion of the community banking segment for the year ended December 31, 2023 has been omitted as such discussion was provided in Part II, Item 7.
Management believes that the indemnification reserve is sufficient to absorb losses related to loans that have been sold in the secondary market. ​ Discussion of the mortgage banking segment for the year ended December 31, 2022 has been omitted as such discussion was provided in Part II, Item 7.
Management believes that the indemnification reserve is sufficient to absorb losses related to loans that have been sold in the secondary market. ​ Discussion of the mortgage banking segment for the year ended December 31, 2023 has been omitted as such discussion was provided in Part II, Item 7.
The Corporation pursues collection of deficiencies, as allowed by state law, when it deems such action to be appropriate. ​ Table 15 summarizes the Corporation’s credit ratios on a consolidated basis and Table 16 summarizes nonperforming assets by principal business segment as of December 31, 2024 and 2023.
The Corporation pursues collection of deficiencies, as allowed by state law, when it deems such action to be appropriate. ​ Table 15 summarizes the Corporation’s credit ratios on a consolidated basis and Table 16 summarizes nonperforming assets by principal business segment as of December 31, 2025 and 2024.
The consumer finance segment’s automobile customers are both prime and non-prime and as such, may have experienced prior credit difficulties.
The consumer finance segment’s automobile customers are both prime and non-prime and as such, some customers may have experienced prior credit difficulties.
Actual indemnification payments may differ materially from management’s estimates, which may result in additional provision for indemnification losses in future periods. There were no payments made in 2024, 2023 or 2022. ​ Risks also arise from the possible inability of investors to meet the terms of their contracts.
Actual indemnification payments may differ materially from management’s estimates, which may result in additional provision for indemnification losses in future periods. There were no payments made in 2025, 2024 or 2023. ​ Risks also arise from the possible inability of investors to meet the terms of their contracts.
The conventional loans that the mortgage banking segment originates that have loan-to-value ratios greater than 80 percent at origination are generally insured by private mortgage insurance. ​ 64 Table of Contents Commercial Real Estate ​ The community banking segment’s commercial real estate loans are primarily secured by the value of real property.
The conventional loans that the mortgage banking segment originates that have loan-to-value ratios greater than 80 percent at origination are generally insured by private mortgage insurance. 63 Table of Contents Commercial Real Estate ​ The community banking segment’s commercial real estate loans are primarily secured by the value of real property.
The proceeds of commercial real estate loans are generally used by the borrower to finance or refinance the cost of acquiring and/or improving a commercial property. The properties that typically secure these loans are office and warehouse facilities, hotels, apartment complexes, retail facilities, restaurants and other commercial properties.
The proceeds of commercial real estate loans are generally used by the borrower to finance or refinance the cost of acquiring and/or improving a commercial property. The properties that typically secure these loans are office and warehouse facilities, hotels, apartment complexes, retail facilities, restaurants, residential investment properties and other commercial properties.
While the approval process is generally the same as the indirect automobile approval process described above, borrowers on marine and RV contracts purchased by the consumer finance segment have typically not had prior credit issues and these contracts are considered prime.
While the approval process was generally the same as the indirect automobile approval process described above, borrowers on marine and RV contracts purchased by the consumer finance segment have typically not had prior credit issues and these contracts are considered prime.
The average amounts deferred of automobile loans on a monthly basis, which are not included in delinquent loans, during 2024 were 1.80 percent of average automobile loans outstanding, compared to 1.87 percent during 2023 and 1.47 percent during 2022. ​ The consumer finance segment is an indirect lender that provides automobile financing through lending programs that are designed to serve customers in both the prime and “non-prime” markets, including those who may have limited access to traditional automobile financing due to having experienced prior credit difficulties.
The average amounts deferred of automobile loans on a monthly basis, which are not included in delinquent loans, during 2025 were 1.97 percent of average automobile loans outstanding, compared to 1.80 percent during 2024 and 1.87 percent during 2023. ​ The consumer finance segment is an indirect lender that provides automobile financing through lending programs that are designed to serve customers in both the prime and “non-prime” markets, including those who may have limited access to traditional automobile financing due to having experienced prior credit difficulties.
All of the Corporation’s mortgage-backed securities are direct issues of United States government agencies or government-sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments.
All of the Corporation’s mortgage-backed securities are direct issues of United States government agencies or government-sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full 69 Table of Contents faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Business Segments” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 , which was filed with the SEC on February 27, 2024, and is incorporated herein by reference. ​ ASSET QUALITY ​ Allowance and Provision for Credit Losses ​ The Corporation conducts an analysis of the collectability of the loan portfolio on a regular basis and uses this analysis to assess the sufficiency of the allowance for credit losses on loans and to determine the necessary provision for credit losses. ​ The Corporation segments the loan portfolio into three loan portfolios based on common risk characteristics.
“Management’s Discussion and Analysis of Financial Condition and Results of 53 Table of Contents Operations,” under the heading “Business Segments” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 , which was filed with the SEC on February 27, 2025, and is incorporated herein by reference. ​ ASSET QUALITY ​ Allowance and Provision for Credit Losses ​ The Corporation conducts an analysis of the collectability of the loan portfolio on a regular basis and uses this analysis to assess the sufficiency of the allowance for credit losses on loans and to determine the necessary provision for credit losses. ​ The Corporation segments the loan portfolio into three loan portfolios based on common risk characteristics.
Credit approval is centralized, which along with the application processing system, ensures that contract purchase decisions comply with the consumer finance segment’s underwriting policies and procedures. ​ Finance contract application packages completed by prospective borrowers are submitted by the automobile dealers electronically through a third-party online automotive sales and finance platform to the consumer finance segment’s automated origination and application system, which processes the credit bureau report, generates all relevant loan calculations and displays the requested contract structure.
Credit approval is centralized, which along with the application processing system, ensures that contract purchase decisions comply with the consumer finance segment’s underwriting policies and procedures. ​ Finance contract application packages completed by prospective borrowers are submitted by the automobile dealers electronically through multiple third-party online automotive sales and finance platforms to the consumer finance segment’s automated origination and application system, which processes the credit bureau report, generates all relevant loan calculations and displays the requested contract structure.
The Corporation utilizes credit scores based on the methods developed and defined by the Fair Isaac Corporation (FICO) as a key indicator of the risk of loss to manage the portfolio and estimate the allowance for credit losses. A FICO Score is a three-digit number based on the information in an applicant’s credit reports.
The Corporation utilizes credit scores based on the methods developed and defined by the Fair Isaac Corporation (FICO) as a key indicator of the risk of loss to manage the portfolio 55 Table of Contents and estimate the allowance for credit losses. A FICO Score is a three-digit number based on the information in an applicant’s credit reports.
The mortgage banking segment has procedures in place to evaluate the credit risk of investors and does not expect any counterparty to fail to meet its obligations. ​ The Corporation’s derivative financial instruments include (1) interest rate swaps that qualify and are designated as cash flow hedges on the Corporation’s trust preferred capital notes, (2) interest rate swaps with certain qualifying commercial loan customers and dealer counterparties and (3) interest rate contracts arising from mortgage banking activities, including interest rate lock commitments (IRLCs) on mortgage loans and related forward sales of mortgage loans and mortgage backed securities.
The mortgage banking segment has procedures in place to evaluate the credit risk of investors and does not expect any counterparty to fail to meet its obligations. ​ The Corporation’s derivative financial instruments include (1) interest rate swaps that qualify and are designated as cash flow hedges on the Corporation’s trust preferred capital notes, (2) interest rate swaps with certain qualifying commercial loan customers and dealer counterparties and (3) interest rate contracts arising from mortgage banking activities, including interest rate lock commitments (IRLCs) on mortgage loans.
The Corporation’s securities available for sale are fixed income debt securities, and their unrealized loss position, a component of other comprehensive income, is a result of increased market interest rates since they were purchased. The Corporation expects to recover its investments in debt securities through scheduled payments of principal and interest.
The Corporation’s securities available for sale are fixed income debt securities and their unrealized loss position is a result of increased market interest rates since they were purchased. The Corporation expects to recover its investments in debt securities through scheduled payments of principal and interest.
The possibility of loss is extremely high. 54 Table of Contents ​ ● Loss rated loans are not considered collectible under normal circumstances and there is no realistic expectation for any future payment on the loan. Loss rated loans are fully charged off. ​ Allowance for Credit Losses Methodology – Consumer Finance.
The possibility of loss is extremely high. ​ ● Loss rated loans are not considered collectible under normal circumstances and there is no realistic expectation for any future payment on the loan. Loss rated loans are fully charged off. ​ Allowance for Credit Losses Methodology – Consumer Finance.
In December 2024, the Board of Directors authorized a program, effective January 1, 2025 through December 31, 2025, to repurchase up to $5.0 million of the Corporation’s common stock (the 2025 Repurchase Program).
In December 2025, the Board of Directors authorized a program, effective January 1, 2026 through December 31, 2026, to repurchase up to $5.0 million of the Corporation’s common stock (the 2026 Repurchase Program).
While we will continue to look for opportunities to invest capital in profitable growth, share repurchases are another tool that facilitates improving shareholder return, as measured by ROE and earnings per share. ​ Under the small bank holding company policy statement of the Federal Reserve Board, which applies to certain bank holding companies with consolidated total assets of less than $3 billion, the Corporation is not subject to regulatory capital requirements.
While we will continue to look for opportunities to invest capital in profitable growth, share repurchases are another tool that facilitates improving shareholder return, as measured by ROE and earnings per share. ​ Under the small bank holding company policy statement of the Federal Reserve Board, which applies to certain bank holding companies with consolidated total assets of less than $3 billion, the Corporation was not subject to regulatory capital requirements as of December 31, 2025.
“Financial Statements and Supplementary Data” under the heading “Note 1: Summary of Significant Accounting Policies.” ​ RESULTS OF OPERATIONS ​ NET INTEREST INCOME ​ The following table shows the average balance sheets, the amounts of interest earned on earning assets, with related yields, and interest expense on interest-bearing liabilities, with related rates, for each of the years ended December 31, 2024, 2023 and 2022.
“Financial Statements and Supplementary Data” under the heading “Note 1: Summary of Significant Accounting Policies.” ​ 42 Table of Contents RESULTS OF OPERATIONS ​ NET INTEREST INCOME ​ The following table shows the average balance sheets, the amounts of interest earned on earning assets, with related yields, and interest expense on interest-bearing liabilities, with related rates, for each of the years ended December 31, 2025, 2024 and 2023.
Changes in economic conditions may also affect consumer demand for used automobiles and values of automobiles 61 Table of Contents securing outstanding loans, due to changes in demand or changes in levels of inventory of used automobiles, which may directly affect the amount of a loss incurred by the consumer finance segment in the event of default.
Changes in economic conditions may also affect consumer demand for used automobiles and values of automobiles securing outstanding loans, due to changes in demand or changes in levels of inventory of used automobiles, which may directly affect the amount of a loss incurred by the consumer finance segment in the event of default.
Consumer finance segment personnel with credit authority 67 Table of Contents review the transaction and determine whether to approve or deny the purchase of the contract.
Consumer finance segment personnel with credit authority 66 Table of Contents review the transaction and determine whether to approve or deny the purchase of the contract.
At December 31, 2024 and 2023, all debt securities in the Corporation’s investment portfolio were classified as available for sale. ​ 68 Table of Contents Table 21 sets forth the composition of the Corporation’s securities available for sale in dollar amounts at fair value and as a percentage of the Corporation’s total securities available for sale at the dates indicated. ​ TABLE 21: Securities Available for Sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 (Dollars in thousands) Amount Percent Amount Percent U.S.
At December 31, 2025 and 2024, all debt securities in the Corporation’s investment portfolio were classified as available for sale. ​ Table 21 sets forth the composition of the Corporation’s securities available for sale in dollar amounts at fair value and as a percentage of the Corporation’s total securities available for sale at the dates indicated. ​ TABLE 21: Securities Available for Sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 (Dollars in thousands) ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ Amount ​ ​ ​ Percent U.S.
The Board of Directors 39 Table of Contents 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 levels and requirements and expected future earnings.
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 levels and requirements and expected future earnings.
“Financial Statements and Supplementary Data” under the headings “Note 9: Leases,” “Note 11: Borrowings,” and “Note 18: Commitments and Contingent Liabilities.” ​ As a result of the Corporation’s management of liquid assets and the ability to generate liquidity through liability funding, management believes that the Corporation maintains overall liquidity sufficient to satisfy its operational requirements and contractual obligations. ​ CAPITAL RESOURCES ​ Total equity was $227.0 million as of December 31, 2024, compared with $217.5 million as of December 31, 2023.
“Financial Statements and Supplementary Data” under the headings “Note 9: Leases,” “Note 11: Borrowings,” and “Note 18: Commitments and Contingent Liabilities.” ​ As a result of the Corporation’s management of liquid assets and the ability to generate liquidity through liability funding, management believes that the Corporation maintains overall liquidity sufficient to satisfy its operational requirements and contractual obligations. ​ CAPITAL RESOURCES ​ Total equity was $262.3 million as of December 31, 2025, compared with $227.0 million as of December 31, 2024.
Effective management of these sources and uses of funds is essential in attaining a financial institution’s maximum profitability while maintaining an acceptable level of risk. ​ At December 31, 2024, the Corporation had total assets of $2.56 billion compared to $2.44 billion at December 31, 2023.
Effective management of these sources and uses of funds is essential in attaining a financial institution’s maximum profitability while maintaining an acceptable level of risk. ​ At December 31, 2025, the Corporation had total assets of $2.77 billion compared to $2.56 billion at December 31, 2024.
The Corporation’s funding sources, including capacity, amount outstanding and amount available at December 31, 2024 are presented in Table 24.
The Corporation’s funding sources, including capacity, amount outstanding and amount available at December 31, 2025 are presented in Table 24.
For further information concerning the Corporation’s expected timing of such payments as of December 31, 2024, refer to Item 8.
For further information concerning the Corporation’s expected timing of such payments as of December 31, 2025, refer to Item 8.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Overview” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 , which was filed with the SEC on February 27, 2024, and is incorporated herein by reference. ​ Capital Management and Dividends ​ Total equity was $227.0 million at December 31, 2024, compared to $217.5 million at December 31, 2023.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Overview” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 , which was filed with the SEC on February 27, 2025, and is incorporated herein by reference. ​ Capital Management and Dividends ​ Total equity was $262.3 million at December 31, 2025, compared to $227.0 million at December 31, 2024.
Repurchases under the 2025 Repurchase Program may be made through privately negotiated transactions or open market transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and shares repurchased will be returned to the status of authorized and unissued shares of common stock. ​ At December 31, 2024, the book value per share of the Corporation’s common stock was $70.00, and tangible book value per share, a non-GAAP measure, was $61.86, compared to $64.28 and $56.40 respectively, at December 31, 2023.
Repurchases under the 2026 Repurchase Program may be made through privately negotiated transactions or open market transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and shares repurchased will be returned to the status of authorized and unissued shares of common stock. ​ At December 31, 2025, the book value per share of the Corporation’s common stock was $80.64, and tangible book value per share, a non-GAAP measure, was $72.60, compared to $70.00 and $61.86 respectively, at December 31, 2024.
The Corporation also believes any such adverse impacts could be somewhat mitigated by renewals of fixed rate loans originated during periods of lower interest rates and purchases of securities available for sale in the current higher interest rate environment.
The Corporation also believes any such adverse impacts could be somewhat mitigated by renewals of fixed rate loans originated during periods of lower interest rates and purchases of securities available for sale with higher interest rates.
The disclosure below reflects the Corporation’s consolidated capital as determined under regulations that apply to bank holding companies that are not small bank holding companies and minimum capital requirements that would apply to the Corporation if it were not a small bank holding company. ​ At December 31, 2024 and 2023, the Corporation’s CET1 to total risk-weighted assets ratio was 10.7 percent and 11.3 percent, respectively; the Corporation’s Tier 1 capital to risk-weighted assets ratio was 11.9 percent and 12.6 percent, respectively; the Corporation’s total capital to risk-weighted assets ratio was 14.1 percent and 14.8 percent, respectively; and the Corporation’s Tier 1 leverage ratio was 9.8 percent and 10.1 percent, respectively.
The disclosure below reflects the Corporation’s consolidated capital as determined under regulations that apply to bank holding companies that are not small bank holding companies and minimum capital requirements that would apply to the Corporation if it were not a small bank holding company. ​ At December 31, 2025 and 2024, the Corporation’s CET1 to total risk-weighted assets ratio was 11.0 percent and 10.7 percent, respectively; the Corporation’s Tier 1 capital to risk-weighted assets ratio was 12.2 percent and 11.9 percent, respectively; the Corporation’s total capital to risk-weighted assets ratio was 15.2 percent and 14.1 percent, respectively; and the Corporation’s Tier 1 leverage ratio was 10.0 percent and 9.8 percent, respectively.
The measurement of the allowance for credit losses on commercial and consumer loans is based in part on forecasts of the national unemployment rate, which we believe to be indicative of risk factors related to the collectability of commercial and consumer loans.
The measurement of the allowance for credit losses on commercial and consumer loans is based in part on the twelve-month forecast of the national unemployment rate, which we believe to be indicative of risk factors related to the collectability of commercial and consumer loans.
Locked loan commitments were $39.3 million at December 31, 2024, compared to $26.2 million at December 31, 2023 and $42.3 million at December 31, 2022. Mortgage loan segment originations include originations of loans sold to the community banking segment, at prices similar to those paid by third-party investors.
Locked loan commitments were $44.6 million at December 31, 2025, compared to $39.3 million at December 31, 2024 and $26.2 million at December 31, 2023. Mortgage loan segment originations include originations of loans sold to the community banking segment, at prices similar to those paid by third-party investors.
The Corporation’s internal policy limits brokered deposits to 20 percent of total deposits, representing approximately $409.1 million of additional net availability for additional brokered deposits as of December 31, 2024. ​ In the ordinary course of business, the Corporation has entered into contractual obligations and has made other commitments to make future payments.
The Corporation’s internal policy limits brokered deposits to 20 percent of total deposits, representing approximately $555.6 million of additional net availability for additional brokered deposits as of December 31, 2025. ​ In the ordinary course of business, the Corporation has entered into contractual obligations and has made other commitments to make future payments.
Management believes that the level of the allowance for credit losses is adequate to reflect the net amount 52 Table of Contents expected to be collected.
Management believes that the level of the allowance for credit losses is adequate to reflect the net amount expected to be collected.
Loans secured by non-owner-occupied properties are made when: (1) the borrower is in strong financial condition and presents a substantial business opportunity for the Corporation and (2) the borrower often has substantially pre-leased the property to high-caliber tenants. ​ Our commercial real estate loans are usually amortized over a period of time ranging from 15 years to 30 years and usually have a term to maturity ranging from 5 years to 15 years, with fixed rates of interest typically for periods of up to ten years.
Loans secured by non-owner-occupied properties are made when the borrower is in strong financial condition and oftentimes the borrower has substantially pre-leased the property to high-caliber tenants. ​ Our commercial real estate loans are usually amortized over a period of time ranging from 15 years to 30 years and usually have a term to maturity ranging from 5 years to 15 years, with fixed rates of interest typically for periods of up to ten years.
In making its decision on the payment of dividends on the Corporation’s common stock, the Corporation’s Board of Directors considers operating results, financial condition, capital adequacy, regulatory requirements, shareholder returns, growth expectations and other factors. ​ In November 2022, the Board of Directors of the Corporation authorized a program, effective December 1, 2022 through December 31, 2023, to repurchase up to $10.0 million of the Corporation’s common stock (the 2022 Repurchase Program).
In making its decision on the payment of dividends on the Corporation’s common stock, the Corporation’s Board of Directors considers operating results, financial condition, capital adequacy, regulatory requirements, shareholder returns, growth expectations and other factors. ​ 39 Table of Contents In December 2023, the Board of Directors authorized a program, effective January 1, 2024 through December 31, 2024, to repurchase up to $10.0 million of the Corporation’s common stock (the 2024 Repurchase Program).
At December 31, 2024, repossessed vehicles at fair value less estimated costs to sell included in other assets totaled $779,000, compared to $646,000 at December 31, 2023.
At December 31, 2025, repossessed vehicles at fair value less estimated costs to sell included in other assets totaled $937,000, compared to $779,000 at December 31, 2024.
The total contract amount of standby letters of credit was $18.8 million at December 31, 2024, compared to $7.9 million at December 31, 2023. ​ The mortgage banking segment sells the majority of the residential mortgage loans it originates to third-party investors.
The total contract amount of standby letters of credit was $22.2 million at December 31, 2025, compared to $18.8 million at December 31, 2024. ​ The mortgage banking segment sells the majority of the residential mortgage loans it originates to third-party investors.
Depending on our liquidity levels, our capital position, conditions in the capital markets, our business operations and initiatives, and other factors, we may from time to time consider the issuance of debt, equity or other securities or other possible capital market transactions, the proceeds of which could provide additional liquidity for our operations. ​ Time deposits maturing in less than one year and in more than one year totaled $705.7 million and $112.6 million, respectively, at December 31, 2024. ​ Uninsured deposits represent an estimate of amounts above the FDIC insurance coverage limit of $250,000.
Depending on our liquidity levels, our capital position, conditions in the capital markets, our business operations and initiatives, and other factors, we may from time to time consider the 73 Table of Contents issuance of debt, equity or other securities or other possible capital market transactions, the proceeds of which could provide additional liquidity for our operations. ​ Time deposits maturing in less than one year and in more than one year totaled $837.9 million and $58.5 million, respectively, at December 31, 2025. ​ Uninsured deposits represent an estimate of amounts above the FDIC insurance coverage limit of $250,000.
The accumulated other comprehensive loss related to the Corporation’s securities available for sale, net of deferred income taxes, decreased to $23.7 million at December 31, 2024, compared to $25.0 million at December 31, 2023 due primarily to fluctuations in debt security market interest rates and a decrease in the balance of securities available for sale as a result of maturities, calls and paydowns outpacing purchases. ​ The Corporation’s Board of Directors continued its historical practice of paying dividends in 2024.
The accumulated other comprehensive loss related to the Corporation’s securities available for sale, net of deferred income taxes, decreased to $10.2 million at December 31, 2025, compared to $23.7 million at December 31, 2024 due primarily to fluctuations in debt security market interest rates and a decrease in the balance of securities available for sale in an unrealized loss position as a result of maturities, calls and paydowns. ​ The Corporation’s Board of Directors continued its historical practice of paying dividends in 2025.
At December 31, 2024 and 2023, the Bank’s CET1 to total risk-weighted assets ratio was 12.3 percent and 12.9 percent, respectively; the Bank’s Tier 1 capital to risk-weighted assets ratio was 12.3 percent and 12.9 percent, respectively; the Bank’s total capital to risk-weighted assets ratio was 13.5 percent and 14.1 percent, respectively; and the Bank’s Tier 1 leverage ratio was 10.1 percent and 10.3 percent, respectively.
At December 31, 2025 and 2024, the Bank’s CET1 to total risk-weighted assets ratio was 13.6 percent and 12.3 percent, respectively; the Bank’s Tier 1 capital to risk-weighted assets ratio was 13.6 percent and 12.3 percent, respectively; the Bank’s total capital to risk-weighted assets ratio was 14.8 percent and 13.5 percent, respectively; and the Bank’s Tier 1 leverage ratio was 11.1 percent and 10.1 percent, respectively.
At December 31, 2024, total delinquent loans as a percentage of total loans was 3.90 percent, compared to 4.09 percent at December 31, 2023. The allowance for credit losses was $22.7 million at December 31, 2024, compared to $23.6 million at December 31, 2023.
At December 31, 2025, total delinquent loans as a percentage of total loans was 4.38 percent, compared to 3.90 percent at December 31, 2024. The allowance for credit losses was $22.3 million at December 31, 2025, compared to $22.7 million at December 31, 2024.
The decrease in the net unrealized losses on the market value of securities available for sale during 2024 was due primarily to a decrease in the balance of securities available for sale. ​ The Corporation seeks to diversify its portfolio to minimize risk, including by purchasing shorter-duration mortgage-backed securities to reduce interest rate risk and for cash flow and reinvestment opportunities and obligations of states and political subdivisions due to the tax benefits and the higher tax-adjusted yield obtained from these securities.
The decrease in the net unrealized losses on the market value of securities available for sale during 2025 was due primarily to fluctuations in debt security market interest rates and a decrease in the balance of securities available for sale in an unrealized loss position as a result of maturities, calls and paydowns. ​ The Corporation seeks to diversify its portfolio to minimize risk, including by purchasing shorter-duration mortgage-backed securities to reduce interest rate risk and for cash flow and reinvestment opportunities and obligations of states and political subdivisions due to the tax benefits and the higher tax-adjusted yield obtained from these securities.
Management believes that the level of the allowance for credit losses is adequate to reflect the net amount expected to be collected. ​ Nonaccrual loans at the consumer finance segment decreased to $614,000 at December 31, 2024 from $892,000 at December 31, 2023.
Management believes that the level of the allowance for credit losses is adequate to reflect the net amount expected to be collected. ​ Nonaccrual loans at the consumer finance segment increased to $1.0 million at December 31, 2025 from $614,000 at December 31, 2024.
The following table presents the Corporation’s reserve for unfunded commitments for the periods indicated. ​ TABLE 12: Reserve for Unfunded Commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) 2024 ​ 2023 Balance at the beginning of year ​ $ 1,650 ​ $ — Impact of ASC 326 adoption ​ — ​ 1,501 Provision charged to operations ​ 150 ​ 149 Balance at the end of year ​ $ 1,800 ​ $ 1,650 ​ ​ The allowance for credit losses on loans and available for sale debt securities and the reserve for unfunded commitments are established through a provision for credit losses charged against earnings.
The following table presents the Corporation’s reserve for unfunded commitments for the periods indicated. ​ TABLE 12: Reserve for Unfunded Commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) ​ ​ ​ 2025 ​ 2024 Balance at the beginning of period ​ $ 1,800 ​ $ 1,650 Provision charged to operations ​ (200) ​ 150 Total ​ $ 1,600 ​ $ 1,800 ​ ​ The allowance for credit losses on loans and available for sale debt securities and the reserve for unfunded commitments are established through a provision for credit losses charged against earnings.
The non-GAAP measures used by management enhance comparability by excluding the effects of (1) items that do not reflect ongoing operating performance, (2) balances of intangible assets, including goodwill, that vary significantly between institutions, and (3) tax benefits that are not consistent across different opportunities for investment.
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.
The following table presents selected financial performance highlights for the periods indicated: ​ TABLE 1: Financial Performance Highlights ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands, except for per share data) ​ Year Ended December 31, ​ ​ 2024 2023 ​ 2022 ​ Net Income (Loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Community Banking ​ $ 20,284 ​ $ 22,928 ​ $ 24,374 ​ Mortgage Banking ​ ​ 1,108 ​ ​ 465 ​ ​ 1,210 ​ Consumer Finance ​ ​ 1,414 ​ ​ 2,879 ​ ​ 6,831 ​ Other ​ ​ (2,888) ​ ​ (2,526) ​ ​ (3,046) ​ Consolidated net income ​ $ 19,918 ​ $ 23,746 ​ $ 29,369 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted net income 1 ​ $ 19,993 ​ $ 23,746 ​ $ 26,990 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share - basic and diluted ​ $ 6.01 ​ $ 6.92 ​ $ 8.29 ​ Adjusted earnings per share - basic and diluted 1 ​ $ 6.03 ​ $ 6.92 ​ $ 7.61 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average equity ​ ​ 9.02 % ​ 11.68 % ​ 14.84 % Adjusted return on average equity 1 ​ ​ 9.05 % ​ 11.68 % ​ 13.64 % Return on average assets ​ ​ 0.80 % ​ 0.99 % ​ 1.27 % Adjusted return on average assets 1 ​ ​ 0.80 % ​ 0.99 % ​ 1.16 % Return on average tangible common equity (ROTCE) 1 ​ ​ 10.37 % ​ 13.58 % ​ 17.31 % Adjusted ROTCE 1 ​ ​ 10.41 % ​ 13.58 % ​ 15.92 % 1 Refer to “Use of Certain Non-GAAP Financial Measures,” below, for information about these non-GAAP financial measures, including a reconciliation to the most directly comparable financial measures calculated in accordance with U.S.
The following table presents selected financial performance highlights for the periods indicated: ​ TABLE 1: Financial Performance Highlights ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands, except for per share data) ​ Year Ended December 31, ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ 2023 ​ Net Income (Loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Community Banking ​ $ 27,231 ​ $ 20,284 ​ $ 22,928 ​ Mortgage Banking ​ ​ 2,307 ​ ​ 1,108 ​ ​ 465 ​ Consumer Finance ​ ​ 1,229 ​ ​ 1,414 ​ ​ 2,879 ​ Other ​ ​ (3,776) ​ ​ (2,888) ​ ​ (2,526) ​ Consolidated net income ​ $ 26,991 ​ $ 19,918 ​ $ 23,746 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share - basic and diluted ​ $ 8.29 ​ $ 6.01 ​ $ 6.92 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average assets ​ ​ 1.01 % ​ 0.80 % ​ 0.99 % Return on average equity ​ ​ 11.11 % ​ 9.02 % ​ 11.68 % Return on average tangible common equity (ROTCE) 1 ​ ​ 12.53 % ​ 10.37 % ​ 13.58 % 1 Refer to “Use of Certain Non-GAAP Financial Measures,” below, for information about these non-GAAP financial measures, including a reconciliation to the most directly comparable financial measures calculated in accordance with U.S.
The Corporation’s deposits are principally provided by individuals and businesses located within the communities served. ​ During the year ended December 31, 2024, deposits increased $104.7 million to $2.17 billion at December 31, 2024, compared to $2.07 billion at December 31, 2023.
The Corporation’s deposits are principally provided by individuals and businesses located within the communities served. ​ During the year ended December 31, 2025, deposits increased $174.9 million to $2.35 billion at December 31, 2025, compared to $2.17 billion at December 31, 2024.
We maintain a structure that will assure an adequate level of capital to support anticipated asset growth and to absorb potential losses.
We regularly review the adequacy of the Corporation’s and the Bank’s capital. We maintain a structure that will assure an adequate level of capital to support anticipated asset growth and to absorb potential losses.
With the consumer finance segment’s scorecard model for purchasing loan contracts, the credit-worthiness of borrowers at origination has improved for automobile loans purchased and the level of credit losses experienced has decreased relative to long-term historical averages. We cannot provide any assurance that the consumer finance segment’s net charge-off ratio will not increase in future periods.
With the consumer finance segment’s scorecard model for purchasing loan contracts, the credit-worthiness of borrowers at origination has improved for automobile loans 62 Table of Contents purchased and the level of credit losses experienced has decreased relative to long-term historical averages. No assurances can be made that the consumer finance segment’s net charge-off ratio will not increase in future periods.
Lock-adjusted originations for the mortgage banking segment increased by 11.3 percent for the year ended December 31, 2024 compared to the year ended December 31, 2023. Locked loan commitments increased by $13.1 million in the year ended December 31, 2024 and decreased by $16.1 million in the year ended December 31, 2023.
Lock-adjusted originations for the mortgage banking segment increased by 27.0 percent for the year ended December 31, 2025 compared to the year ended December 31, 2024. Locked loan commitments increased by $5.3 million in the year ended December 31, 2025 and increased by $13.1 million in the year ended December 31, 2024.
The total effective duration of the investment portfolio is 3.8 years as of December 31, 2024. ​ 69 Table of Contents TABLE 22: Maturity of Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Weighted ​ ​ Amortized ​ Average ​ (Dollars in thousands) ​ Cost ​ Yield 1 ​ U.S.
The total effective duration of the investment portfolio was 3.7 years as of December 31, 2025. ​ TABLE 22: Maturity of Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Amortized ​ Average ​ (Dollars in thousands) ​ Cost ​ Yield 1 ​ U.S.
These include adjusted net income, adjusted earnings per share, adjusted ROE, adjusted ROA, ROTCE, adjusted ROTCE, tangible book value per share, price to tangible book value ratio 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.
These include net tangible income attributable to the Corporation, ROTCE, tangible book value per share, price to tangible book value ratio, and the following fully-taxable equivalent (FTE) measures: interest and fees on loans-FTE, interest income and dividends on securities-FTE, total interest income-FTE and net interest income-FTE.
The community banking segment offers fixed and variable interest rates on construction loans. We do not generally finance the construction of commercial real estate projects built on a speculative basis. For residential builder loans, we limit the number of models and/or speculative units allowed depending on market conditions, the builder’s financial strength and track record and other factors.
The community banking segment offers fixed and variable interest rates on construction loans. For residential builder loans, we limit the number of models and/or speculative units allowed depending on market conditions, the builder’s financial strength and track record and other factors.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Business Segments” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 , which was filed with the SEC on February 27, 2024, and is incorporated herein by reference. ​ 51 Table of Contents Consumer Finance: The following table presents the consumer finance operating results for the periods indicated. ​ TABLE 9: Consumer Finance Segment Operating Results ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Interest income ​ $ 49,684 ​ $ 47,264 ​ $ 42,441 Interest expense ​ ​ — ​ ​ — ​ ​ — Net interest income before allocation ​ ​ 49,684 ​ ​ 47,264 ​ ​ 42,441 Net interest allocation 1 ​ ​ (23,660) ​ ​ (22,826) ​ ​ (15,124) Net interest income ​ ​ 26,024 ​ ​ 24,438 ​ ​ 27,317 Provision for credit losses ​ ​ 11,600 ​ ​ 6,650 ​ ​ 3,740 Net interest income after provision for credit losses ​ ​ 14,424 ​ ​ 17,788 ​ ​ 23,577 Noninterest income ​ ​ 1,024 ​ ​ 962 ​ ​ 1,050 Noninterest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ ​ 8,026 ​ ​ 8,733 ​ ​ 8,939 Occupancy expense ​ ​ 620 ​ ​ 634 ​ ​ 660 Data processing ​ ​ 1,328 ​ ​ 1,280 ​ ​ 1,458 Professional fees ​ ​ 312 ​ ​ 310 ​ ​ 267 Insurance expense ​ ​ 146 ​ ​ 135 ​ ​ 131 Marketing and advertising expenses ​ ​ 39 ​ ​ 45 ​ ​ 102 Loan processing and collection expenses ​ ​ 1,488 ​ ​ 2,022 ​ ​ 2,096 Other expenses ​ ​ 1,577 ​ ​ 1,657 ​ ​ 1,631 Total noninterest expenses ​ ​ 13,536 ​ ​ 14,816 ​ ​ 15,284 Income before income taxes ​ ​ 1,912 ​ ​ 3,934 ​ ​ 9,343 Income tax expense ​ ​ 498 ​ ​ 1,055 ​ ​ 2,512 Net income ​ $ 1,414 ​ $ 2,879 ​ $ 6,831 1 Interest expense is allocated to the consumer finance segment through borrowings from the community banking segment. ​ The consumer finance segment reported net income of $1.4 million for the year ended December 31, 2024, compared to $2.9 million for the year ended December 31, 2023, due primarily to: ​ ● higher provision for credit losses due primarily to increased net charge-offs; and ● higher interest expense on borrowings from the community banking segment as a result of higher interest rates and higher average balances of borrowings; partially offset by: ● higher interest income resulting from the effects of higher interest rates on loan yields and higher average balances of loans; ● lower salaries and employee benefits expense due to an effort to reduce overhead costs; and ● lower loan processing and collection expenses due primarily to efficiency initiatives within the collections department. ​ All interest expense allocated to the consumer finance segment is from interest expense on borrowings from the community banking segment.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Business Segments” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 , which was filed with the SEC on February 27, 2025, and is incorporated herein by reference. ​ 52 Table of Contents Consumer Finance: The following table presents the consumer finance operating results for the periods indicated. ​ TABLE 9: Consumer Finance Segment Operating Results ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Interest income ​ $ 49,178 ​ $ 49,684 ​ $ 47,264 Interest expense ​ ​ — ​ ​ — ​ ​ — Net interest income before allocation ​ ​ 49,178 ​ ​ 49,684 ​ ​ 47,264 Net interest allocation 1 ​ ​ (23,031) ​ ​ (23,660) ​ ​ (22,826) Net interest income ​ ​ 26,147 ​ ​ 26,024 ​ ​ 24,438 Provision for credit losses ​ ​ 11,600 ​ ​ 11,600 ​ ​ 6,650 Net interest income after provision for credit losses ​ ​ 14,547 ​ ​ 14,424 ​ ​ 17,788 Noninterest income ​ ​ 764 ​ ​ 1,024 ​ ​ 962 Noninterest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ ​ 7,753 ​ ​ 8,026 ​ ​ 8,733 Occupancy expense ​ ​ 578 ​ ​ 620 ​ ​ 634 Data processing ​ ​ 1,257 ​ ​ 1,328 ​ ​ 1,280 Professional fees ​ ​ 570 ​ ​ 312 ​ ​ 310 Insurance expense ​ ​ 144 ​ ​ 146 ​ ​ 135 Marketing and advertising expenses ​ ​ 33 ​ ​ 39 ​ ​ 45 Loan processing and collection expenses ​ ​ 1,749 ​ ​ 1,488 ​ ​ 2,022 Other expenses ​ ​ 1,576 ​ ​ 1,577 ​ ​ 1,657 Total noninterest expenses ​ ​ 13,660 ​ ​ 13,536 ​ ​ 14,816 Income before income taxes ​ ​ 1,651 ​ ​ 1,912 ​ ​ 3,934 Income tax expense ​ ​ 422 ​ ​ 498 ​ ​ 1,055 Net income ​ $ 1,229 ​ $ 1,414 ​ $ 2,879 1 Interest expense is allocated to the consumer finance segment through borrowings from the community banking segment. ​ The consumer finance segment reported net income of $1.2 million for the year ended December 31, 2025, compared to $1.4 million for the year ended December 31, 2024, due primarily to: ​ ● lower interest income resulting from lower average balances of loans, partially offset by higher loan yields; and ● higher loan processing and collection expenses; partially offset by: ● lower interest expense allocation on borrowings from the community banking segment as a result of lower average balances of borrowings; and ● lower salaries and employee benefits expense due to efforts to reduce overhead costs. ​ All interest expense allocated to the consumer finance segment is from interest expense on borrowings from the community banking segment.
“Financial Statements and Supplementary Data” under the heading “Note 21: Derivative Financial Instruments.” ​ 72 Table of Contents LIQUIDITY ​ The objective of the Corporation’s liquidity management is to ensure the continuous availability of funds to satisfy the credit needs of our customers and the demands of our depositors, creditors and investors.
For further information concerning the Corporation’s derivatives, refer to Item 8. “Financial Statements and Supplementary Data” under the heading “Note 21: Derivative Financial Instruments.” ​ LIQUIDITY ​ The objective of the Corporation’s liquidity management is to ensure the continuous availability of funds to satisfy the credit needs of our customers and the demands of our depositors, creditors and investors.
These transactions are eliminated to reach consolidated totals. ​ Community banking segment loans, excluding loans to the consumer finance and mortgage banking segments, increased $180.0 million, or 14.1 percent, to $1.5 billion at December 31, 2024, compared to $1.3 billion at December 31, 2023, due primarily to growth in the commercial real estate, construction, land acquisition and development and residential mortgage segments of the loan portfolio.
These transactions are eliminated to reach consolidated totals. ​ Community banking segment loans, excluding loans to the consumer finance and mortgage banking segments, increased $136.7 million, or 9.4 percent, to $1.6 billion at December 31, 2025, compared to $1.5 billion at December 31, 2024, due primarily to growth in the commercial real estate, land acquisition and development and equity lines segments of the loan portfolio.
The ultimate effect of these factors on the Corporation’s net interest margin will also depend on other factors, including the Corporation’s ability to grow loans at the community banking and consumer finance segments, to compete for deposits, and the extent of its reliance on borrowings.
The ultimate effect of market factors, including monetary policy actions taken by the Federal Reserve, on the Corporation’s net interest margin will also depend on other factors, including the Corporation’s ability to grow loans at the community banking segment and consumer finance segment, to compete for deposits, and the extent of its reliance on borrowings.
As of December 31, 2024, the Corporation’s uninsured deposits were approximately $640.2 million, or 29.5 percent of total deposits, compared to $584.7 million or 28.3 percent of total deposits at December 31, 2023.
As of December 31, 2025, the Corporation’s uninsured deposits were approximately $710.4 million, or 30.3 percent of total deposits, compared to $640.2 million or 29.5 percent of total deposits at December 31, 2024.
The increase was attributable primarily to increases in loans held for investment, partially offset by a decrease in available for sale securities and was funded by growth in deposits and long-term borrowings.
The increase was attributable primarily to increases in loans held for investment, available for sale securities and loans held for sale and was funded by growth in deposits.
The yield on interest-earning assets and cost of interest-bearing liabilities increased by 45 basis points and 85 basis points, respectively, for 2024, compared to 2023. ​ Average loans, which includes both loans held for investment and loans held for sale, increased $172.0 million to $1.89 billion for 2024, compared to $1.71 billion for 2023.
The yield on interest-earning assets and cost of interest-bearing liabilities increased by 7 basis points and decreased by 5 basis points, respectively, for 2025, compared to 2024. ​ Average loans, which includes both loans held for investment and loans held for sale, increased $132.0 million to $2.02 billion for 2025, compared to $1.89 billion for 2024.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Business Segments” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 , which was filed with the SEC on February 27, 2024, and is incorporated herein by reference. ​ 49 Table of Contents Mortgage Banking: The following table presents the mortgage banking operating results for the periods indicated. ​ TABLE 7: Mortgage Banking Segment Operating Results ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Interest income ​ $ 1,897 ​ $ 1,695 ​ $ 2,036 Interest expense ​ ​ — ​ ​ — ​ ​ — Net interest income before allocation ​ ​ 1,897 ​ ​ 1,695 ​ ​ 2,036 Net interest allocation 1 ​ ​ (796) ​ ​ (612) ​ ​ (662) Net interest income ​ ​ 1,101 ​ ​ 1,083 ​ ​ 1,374 Provision for credit losses ​ ​ — ​ ​ — ​ ​ 32 Net interest income after provision for credit losses ​ ​ 1,101 ​ ​ 1,083 ​ ​ 1,342 Noninterest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains of sales of loans ​ ​ 6,421 ​ ​ 5,845 ​ ​ 7,963 Mortgage banking fee income ​ ​ 2,458 ​ ​ 2,254 ​ ​ 3,083 Mortgage lender services fee income ​ ​ 2,059 ​ ​ 2,048 ​ ​ 1,667 Other income ​ ​ 85 ​ ​ 51 ​ ​ 106 Total noninterest income ​ ​ 11,023 ​ ​ 10,198 ​ ​ 12,819 Noninterest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ ​ 7,069 ​ ​ 6,996 ​ ​ 7,599 Occupancy expense ​ ​ 890 ​ ​ 1,005 ​ ​ 1,271 Data processing ​ ​ 1,012 ​ ​ 1,008 ​ ​ 1,137 Loan processing and collection expenses ​ ​ 917 ​ ​ 1,047 ​ ​ 1,683 Marketing and advertising expenses ​ ​ 426 ​ ​ 428 ​ ​ 518 Professional fees ​ ​ 103 ​ ​ 101 ​ ​ 180 Insurance expense ​ ​ 111 ​ ​ 128 ​ ​ 61 Provision for indemnifications ​ ​ (460) ​ ​ (585) ​ ​ (858) Other expenses ​ ​ 528 ​ ​ 560 ​ ​ 989 Total noninterest expenses ​ ​ 10,596 ​ ​ 10,688 ​ ​ 12,580 Income before income taxes ​ ​ 1,528 ​ ​ 593 ​ ​ 1,581 Income tax expense ​ 420 ​ 128 ​ 371 Net income ​ $ 1,108 ​ $ 465 ​ $ 1,210 1 Interest expense is allocated to the mortgage banking segment through borrowings from the community banking segment. ​ The mortgage banking segment reported net income of $1.1 million for the year ended December 31, 2024, compared to $465,000 for the year ended December 31, 2023, due primarily to: ​ ● higher gains on sales of loans and higher mortgage banking fee income due to higher volume of mortgage loan originations; and ● lower occupancy expenses due to an effort to reduce overhead costs; partially offset by: ● lower reversal of provision for indemnifications; and ● higher variable expenses tied to mortgage loan origination volume such as commissions and bonuses, reported in salaries and employee benefits. ​ ​ 50 Table of Contents The following table presents mortgage loan originations and mortgage loans sold for the periods indicated. ​ TABLE 8: Mortgage Loan Originations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Mortgage loan originations: ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchases ​ $ 477,550 ​ $ 446,071 ​ $ 591,889 Refinancings ​ ​ 50,200 ​ ​ 52,726 ​ ​ 105,434 Total mortgage loan originations 1 ​ $ 527,750 ​ $ 498,797 ​ $ 697,323 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lock-adjusted originations 2 ​ $ 539,312 ​ $ 484,602 ​ ​ 661,134 1 Total mortgage loan originations does not include mortgage lender services. 2 Lock-adjusted originations includes the effect of changes in the volume of mortgage loan applications in process that have not closed, net of an estimated volume not expected to close. ​ The sustained elevated level of mortgage interest rates, combined with higher home prices and lower levels of inventory, led to a level of mortgage loan originations in 2024 and 2023 for the industry that is lower than recent historical averages.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Business Segments” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 , which was filed with the SEC on February 27, 2025, and is incorporated herein by reference. ​ 50 Table of Contents Mortgage Banking: The following table presents the mortgage banking operating results for the periods indicated. ​ TABLE 7: Mortgage Banking Segment Operating Results ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Interest income ​ $ 2,336 ​ $ 1,897 ​ $ 1,695 Interest expense ​ ​ — ​ ​ — ​ ​ — Net interest income before allocation ​ ​ 2,336 ​ ​ 1,897 ​ ​ 1,695 Net interest allocation 1 ​ ​ (1,027) ​ ​ (796) ​ ​ (612) Net interest income ​ ​ 1,309 ​ ​ 1,101 ​ ​ 1,083 Provision for credit losses ​ ​ — ​ ​ — ​ ​ — Net interest income after provision for credit losses ​ ​ 1,309 ​ ​ 1,101 ​ ​ 1,083 Noninterest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains of sales of loans ​ ​ 8,568 ​ ​ 6,421 ​ ​ 5,845 Mortgage banking fee income ​ ​ 3,080 ​ ​ 2,458 ​ ​ 2,254 Mortgage lender services fee income ​ ​ 2,857 ​ ​ 2,059 ​ ​ 2,048 Other income ​ ​ 13 ​ ​ 85 ​ ​ 51 Total noninterest income ​ ​ 14,518 ​ ​ 11,023 ​ ​ 10,198 Noninterest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ ​ 7,903 ​ ​ 7,069 ​ ​ 6,996 Occupancy expense ​ ​ 958 ​ ​ 890 ​ ​ 1,005 Data processing ​ ​ 1,233 ​ ​ 1,012 ​ ​ 1,008 Professional fees ​ ​ 172 ​ ​ 103 ​ ​ 101 Insurance expense ​ ​ 101 ​ ​ 111 ​ ​ 128 Marketing and advertising expenses ​ ​ 546 ​ ​ 426 ​ ​ 428 Loan processing and collection expenses ​ ​ 1,214 ​ ​ 917 ​ ​ 1,047 Provision for indemnifications ​ ​ (190) ​ ​ (460) ​ ​ (585) Other expenses ​ ​ 803 ​ ​ 528 ​ ​ 560 Total noninterest expenses ​ ​ 12,740 ​ ​ 10,596 ​ ​ 10,688 Income before income taxes ​ ​ 3,087 ​ ​ 1,528 ​ ​ 593 Income tax expense ​ 780 ​ 420 ​ 128 Net income ​ $ 2,307 ​ $ 1,108 ​ $ 465 1 Interest expense is allocated to the mortgage banking segment through borrowings from the community banking segment. ​ The mortgage banking segment reported net income of $2.3 million for the year ended December 31, 2025, compared to $1.1 million for the year ended December 31, 2024, due primarily to: ​ ● higher gains on sales of loans and higher mortgage banking fee income due to higher volume of mortgage loan originations; and ● higher mortgage lender services income; partially offset by: ● higher variable expenses tied to mortgage loan origination volume such as commissions and bonuses, reported in salaries and employee benefits, as well as loan processing and data processing expenses; and ● lower reversal of provision for indemnifications. ​ ​ 51 Table of Contents The following table presents mortgage loan originations and mortgage loans sold for the periods indicated. ​ TABLE 8: Mortgage Loan Originations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Mortgage loan originations: ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchases ​ $ 596,127 ​ $ 477,550 ​ $ 446,071 Refinancings ​ ​ 84,120 ​ ​ 50,200 ​ ​ 52,726 Total mortgage loan originations 1 ​ $ 680,247 ​ $ 527,750 ​ $ 498,797 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lock-adjusted originations 2 ​ $ 684,957 ​ $ 539,312 ​ ​ 484,602 1 Total mortgage loan originations does not include mortgage lender services. 2 Lock-adjusted originations includes the effect of changes in the volume of mortgage loan applications in process that have not closed, net of an estimated volume not expected to close. ​ Despite the sustained elevated level of mortgage interest rates, higher home prices and low levels of inventory, mortgage banking segment loan originations increased 28.9 percent for the year ended December 31, 2025, compared to the year ended December 31, 2024.
The Corporation and the Bank exceeded these ratios at December 31, 2024 and 2023. 74 Table of Contents The Corporation's capital resources are impacted by its share repurchase programs. During the year ended December 31, 2024, the Corporation repurchased $7.9 million of its common stock under the 2024 Repurchase Program, which expired December 31, 2024.
The Corporation and the Bank exceeded these ratios at December 31, 2025 and 2024. ​ The Corporation's capital resources are impacted by its share repurchase programs. During the year ended December 31, 2025, the Corporation did not repurchase any of its common stock under the 2025 Repurchase Program, which expired December 31, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+1 added−1 removed22 unchanged
Biggest changeThe resulting percentage change in net present value in various rate scenarios is an indication of the longer term repricing risk and options embedded in the balance sheet. ​ The EVE analysis results are presented in the table below. ​ Static EVE Change (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hypothetical Change in EVE ​ ​ ​ as of ​ ​ ​ December 31, 2024 ​ ​ December 31, 2023 ​ Assumed Market Interest Rate Shift Dollars Percentage ​ Dollars ​ Percentage ​ -300 BP shock ​ $ (25,260) ​ (6.49) % ​ $ (28,719) ​ (7.51) % -200 BP shock ​ ​ (9,335) ​ (2.40) ​ ​ ​ (10,881) ​ (2.85) ​ -100 BP shock ​ ​ 270 ​ 0.07 ​ ​ ​ (1,397) ​ (0.37) ​ +100 BP shock ​ ​ (6,771) ​ (1.74) ​ ​ ​ (1,945) ​ (0.51) ​ +200 BP shock ​ ​ (13,022) ​ (3.34) ​ ​ ​ (5,012) ​ (1.31) ​ +300 BP shock ​ ​ (20,439) ​ (5.25) ​ ​ ​ (11,062) ​ (2.89) ​ ​ These results as of December 31, 2024 indicate that the EVE would decrease assuming an immediate downward shift in market interest rates of 200 BP to 300 BP, would increase if rates shifted downward 100 BP and would decrease if rates immediately shifted upward 100 BP to 300 BP.
Biggest changeThe resulting percentage change in net present value in various rate scenarios is an indication of the longer term repricing risk and options embedded in the balance sheet. ​ The EVE analysis results are presented in the following table. ​ Static EVE Change (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hypothetical Change in EVE ​ ​ ​ as of ​ ​ ​ December 31, 2025 ​ ​ December 31, 2024 ​ Assumed Market Interest Rate Shift ​ ​ ​ Dollars ​ ​ ​ Percentage ​ Dollars ​ Percentage ​ -300 BP shock ​ $ (44,627) ​ (10.12) % ​ $ (25,260) ​ (6.49) % -200 BP shock ​ ​ (22,242) ​ (5.05) ​ ​ ​ (9,335) ​ (2.40) ​ -100 BP shock ​ ​ (6,307) ​ (1.43) ​ ​ ​ 270 ​ 0.07 ​ +100 BP shock ​ ​ (1,088) ​ (0.25) ​ ​ ​ (6,771) ​ (1.74) ​ +200 BP shock ​ ​ (5,618) ​ (1.27) ​ ​ ​ (13,022) ​ (3.34) ​ +300 BP shock ​ ​ (11,934) ​ (2.71) ​ ​ ​ (20,439) ​ (5.25) ​ ​ These results as of December 31, 2025 indicate that the EVE would decrease assuming an immediate downward shift in market interest rates of 100 BP to 300 BP, and would decrease if rates immediately shifted upward 100 BP to 78 Table of Contents 300 BP.
IRLCs are derivative financial instruments. ​ We believe that our current interest rate exposure is manageable and within our current interest rate risk guidelines. ​ 81 Table of Contents
IRLCs are derivative financial instruments. ​ We believe that our current interest rate exposure is manageable and within our current interest rate risk guidelines. ​ 79 Table of Contents
As of December 31, 2024, the Corporation’s EVE is more sensitive to increases in rates and less sensitive to decreases in rates compared to its position as of December 31, 2023 80 Table of Contents due primarily to shifts in the mix of earning assets and in the mix of deposits and borrowings, which impacted the overall duration of both assets and liabilities. ​ Certain shortcomings are inherent in the methodology used in the above interest rate risk analyses.
As of December 31, 2025, the Corporation’s EVE is less sensitive to increases in rates and more sensitive to decreases in rates compared to its position as of December 31, 2024 due primarily to shifts in the mix of earning assets and in the mix of deposits and borrowings, which impacted the overall duration of both assets and liabilities. ​ Certain shortcomings are inherent in the methodology used in the above interest rate risk analyses.
These assumptions include loan prepayments, time deposit 79 Table of Contents early withdrawals, the sensitivity of deposit repricing to changes in market rates, withdrawal behavior of non-maturing deposits, and other factors that management deems significant. ​ The simulation analysis results, based on a measurement date balance sheet as of December 31, 2024 and December 31, 2023 for hypothetical changes in net interest income over the next twelve months are presented in the table below. ​ One-Year Net Interest Income Simulation (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hypothetical Change in Net ​ ​ ​ Interest Income ​ ​ ​ Over the Next Twelve Months ​ ​ ​ as of ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ Assumed Market Interest Rate Shift Dollars Percentage ​ Dollars Percentage -300 BP shock ​ $ (7,568) ​ (6.66) % ​ $ (8,372) ​ (8.22) % -200 BP shock ​ ​ (4,687) ​ (4.12) ​ ​ ​ (5,137) ​ (5.04) ​ -100 BP shock ​ ​ (2,040) ​ (1.79) ​ ​ ​ (2,352) ​ (2.31) ​ +100 BP shock ​ ​ 228 ​ 0.20 ​ ​ ​ 1,081 ​ 1.06 ​ +200 BP shock ​ ​ 511 ​ 0.45 ​ ​ ​ 2,094 ​ 2.06 ​ +300 BP shock ​ ​ 764 ​ 0.67 ​ ​ ​ 3,013 ​ 2.96 ​ ​ ​ These results indicate that the Corporation would expect net interest income to decrease over the next twelve months assuming an immediate downward shift in market interest rates of 100 BP to 300 BP and to increase if rates shifted upward to the same degree.
These assumptions include loan prepayments, time deposit early withdrawals, the sensitivity of deposit repricing to changes in market rates, withdrawal behavior of non-maturing deposits, and other factors that management deems significant. ​ The simulation analysis results, based on a measurement date balance sheet as of December 31, 2025 and December 31, 2024 for hypothetical changes in net interest income over the next twelve months are presented in the following table. ​ One-Year Net Interest Income Simulation (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hypothetical Change in Net ​ ​ ​ Interest Income ​ ​ ​ Over the Next Twelve Months ​ ​ ​ as of ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ Assumed Market Interest Rate Shift ​ ​ ​ Dollars ​ ​ ​ Percentage ​ Dollars ​ ​ ​ Percentage -300 BP shock ​ $ (11,464) ​ (9.41) % ​ $ (7,568) ​ (6.66) % -200 BP shock ​ ​ (7,971) ​ (6.54) ​ ​ ​ (4,687) ​ (4.12) ​ -100 BP shock ​ ​ (3,669) ​ (3.01) ​ ​ ​ (2,040) ​ (1.79) ​ +100 BP shock ​ ​ 1,233 ​ 1.01 ​ ​ ​ 228 ​ 0.20 ​ +200 BP shock ​ ​ 2,177 ​ 1.79 ​ ​ ​ 511 ​ 0.45 ​ +300 BP shock ​ ​ 3,010 ​ 2.47 ​ ​ ​ 764 ​ 0.67 ​ ​ ​ These results indicate that the Corporation would expect net interest income to decrease over the next twelve months assuming an immediate downward shift in market interest rates of 100 BP to 300 BP and to increase if rates shifted upward to the same degree.
The simulation analysis results show the Corporation is less asset sensitive as of December 31, 2024, compared to the results as of December 31, 2023 due primarily to shifts in the mix of earnings assets and in the mix of deposits. ​ The EVE analysis provides information on the risk inherent in the balance sheet that might not be taken into account in the simulation analysis due to the shorter time horizon used in that analysis.
As of December 31, 2025, the Corporation’s net interest income is more sensitive to both an increase and decrease in rates compared to its position as of December 31, 2024 due primarily to shifts in the mix of earning assets and in the mix of deposits. ​ The EVE analysis provides information on the risk inherent in the balance sheet that might not be taken into account in the simulation analysis due to the shorter time horizon used in that analysis.
The analysis utilizes a “static” balance sheet approach, which assumes changes in interest rates without any management response to change the composition of the balance sheet. The measurement date balance sheet composition is maintained over the simulation time period with maturing and repayment dollars being rolled back into like instruments for new terms at current market rates.
The measurement date balance sheet composition is maintained over the simulation time period with maturing and repayment 77 Table of Contents dollars being rolled back into like instruments for new terms at current market rates. Additional assumptions are applied to modify volumes and pricing under the various rate scenarios.
Removed
Additional assumptions are applied to modify volumes and pricing under the various rate scenarios.
Added
The analysis utilizes a “static” balance sheet approach, which assumes changes in interest rates without any management response to change the composition of the balance sheet.

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