C&F Financial Restructures Securities After Bearing Sale

The Tip Desk · October 27, 2026 · 4 min read

The Virginia bank holding company reported $8.6 million of second-quarter net income, including an $8.3 million pre-tax gain on Bearing and a $7.1 million securities-restructuring loss.

C&F Financial Corporation (CFFI), the holding company for C&F Bank, reported second-quarter net income of $8.6 million, up 11.1% from $7.8 million a year earlier, after selling its equity interest in Bearing Insurance Group and restructuring part of its securities book.

The Bearing sale produced an $8.3 million pre-tax gain. The community banking segment then sold securities with a $72.6 million book value and bought about $67.8 million of securities, taking a $7.1 million pre-tax loss. Adjusted net income, which excludes both items, was $7.9 million, or $2.40 a share, up 1.5% from $7.8 million a year earlier.

Consolidated annualized net interest margin expanded 14 basis points to 4.41% from 4.27% in the first quarter. President and Chief Executive Officer Tom Cherry said strong community-banking loan growth, higher mortgage originations and margin expansion contributed to adjusted earnings, and that the Southwest Virginia expansion and the securities restructuring are already generating positive results.

Community banking loans grew $65.9 million, or 8.3% annualized, versus Dec. 31, 2025, after $24.1 million, or 6.1% annualized, growth in the first quarter. Average loans rose $132.2 million, or 8.8%, versus the year-earlier quarter, which the company attributed primarily to commercial real estate and land acquisition and development. The segment opened a retail branch in Roanoke after a 2025 loan production office and announced a veteran lender hire in Lynchburg in July.

The community banking segment reported net income of $8.2 million, compared with $7.1 million a year earlier, due primarily to higher interest income from larger average loan, securities and cash balances and higher securities yields, and the $8.3 million Bearing gain, partially offset by higher salaries tied to the Southwest Virginia lending team, the $7.1 million restructuring loss, and a higher provision after a year-earlier reversal of a specific reserve on a nonperforming commercial real estate loan. Adjusted segment net income, which excludes the gain and the restructuring loss, was $7.4 million. Average costs of interest-bearing deposits were lower on lower time-deposit rates.

Deposits increased $19.6 million, or 1.7% annualized, versus Dec. 31, 2025, after a $53.7 million, or 9.2% annualized, increase in the first quarter. Average deposits rose $149.4 million, or 6.7%, versus the year-earlier quarter on higher time, savings and money market balances; a portion of the year-over-year increase reflected the 2025 wind-down of a commercial repurchase-agreement program. Total borrowings were $118.2 million at June 30, 2026, from $113.3 million at year-end, primarily FHLB advances used to help fund loan growth.

Community banking nonaccrual loans were $1.2 million at June 30, 2026, up from $1.1 million at Dec. 31, 2025. The segment recorded a $150,000 provision, versus a $300,000 net reversal a year earlier. The allowance for credit losses was $17.6 million, or 1.06% of loans, down from 1.10% at year-end, which the company tied to changes in credit-loss model assumptions including the FOMC unemployment forecast.

Mortgage banking originations were $233.7 million, up 9.5% from $213.5 million a year earlier, after an approximately 58% jump versus the first quarter of 2025. The company said the 2026 rate environment was generally more favorable, lifting purchases and refinancings. Segment net income was $1.1 million, versus $985,000 a year earlier.

Consumer finance loans decreased $7.7 million, or 3.3% annualized, versus Dec. 31, 2025, after a $3.6 million, or 3.1% annualized, decline in the first quarter, as the marine and recreational vehicle program continues to run off. Segment net income was $538,000. Net charge-offs were at an annualized rate of 2.21% of average total loans in the quarter, compared with 2.19% a year earlier and 2.98% in the first quarter. The allowance was $22.1 million, or 4.83% of loans.

The company declared a 48-cent quarterly dividend, an 18.3% payout of second-quarter earnings per share, and repurchased 4,095 shares, or $312,000, under a $5.0 million 2026 authorization. C&F Bank was categorized as well capitalized at June 30, 2026.