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C & F Financial Corp – ‘10-K’ for 12/31/01 – EX-13

On:  Friday, 3/15/02   ·   For:  12/31/01   ·   Accession #:  916641-2-437   ·   File #:  0-23423

Previous ‘10-K’:  ‘10-K’ on 3/27/01 for 12/31/00   ·   Next:  ‘10-K’ on 3/14/03 for 12/31/02   ·   Latest:  ‘10-K’ on 2/27/24 for 12/31/23

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/15/02  C & F Financial Corp              10-K       12/31/01    5:270K                                   Donnelly Financial/FA

Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Form 10-K Dated 12/31/2001                            47    280K 
 2: EX-10.3     C&F Executive Deferred Compensation Plan              17     71K 
 3: EX-13       Annual Report                                         12     65K 
 4: EX-23.1     Consent of Yount, Hyde & Barbour, P.C.                 1      6K 
 5: EX-99.1     2002 Annual Meeting Proxy Statement                   19     89K 


EX-13   —   Annual Report

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[PHOTO] [C&F LOGO] C&F FINANCIAL CORPORATION 2001 ANNUAL REPORT
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[LOGO GRAPHIC] OUR MISSION It is the mission of the directors, officers, and staff to maximize the long-term wealth of the shareholders of C&F Financial Corporation through Citizens and Farmers Bank and its other subsidiaries. We believe we provide a superior value when we balance long-term and short-term objectives to achieve both a competitive return on investment and a consistent increase in the market value of the Corporation's stock. This must be achieved while maintaining adequate liquidity and safety standards for the protection of all of the Corporation's interested parties, especially its depositors and shareholders. This mission will be accomplished by providing our customers with distinctive service and quality financial products which are responsive to their needs, fairly priced, and delivered promptly and efficiently with the highest degree of accuracy and professionalism. OUR VALUES We believe that excellence is the standard for all we do, achieved by encouraging and nourishing: respect for others; honest, open communication; individual development and satisfaction; a sense of ownership and responsibility for the Corporation's success; participation, cooperation, and teamwork; creativity, innovation, and initiative; prudent risk-taking; and recognition and rewards for achievement. We believe that we must conduct ourselves morally and ethically at all times and in all relationships. We believe that we have an obligation to the well-being of all the communities we serve. We believe that our officers and staff are our most important assets, making the critical difference in how the Corporation performs and, through their work and effort, separate us from all competitors.
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2001 FINANCIAL HIGHLIGHTS C&F Financial Corporation (the "Corporation") is a one-bank holding company with administrative offices in West Point, Virginia. Its wholly-owned subsidiary, Citizens and Farmers Bank, offers quality banking services to individuals, professionals, and small businesses through ten branch offices serving the surrounding towns and counties. Citizens & Commerce Bank, which operates as a division of Citizens and Farmers Bank, offers quality banking services in the Richmond market and has two branch offices. Citizens and Farmers Bank has four wholly-owned subsidiaries. C&F Mortgage Corporation originates and sells residential mortgages. These mortgage services are provided through seven offices in Virginia and three offices in Maryland. Brokerage services are offered through C&F Investment Services, Inc. C&F Title Agency, Inc., offers title insurance services. Insurance services are offered through C&F Insurance Services, Inc. Trust services are provided in association with The Trust Company of Virginia. Return on Average Equity Return on Average Assets [GRAPH] [GRAPH] 16.08% 17.81% 19.22% 15.99% 18.93% 1.90% 2.03% 2.19% 1.76% 2.09% 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 Net Income Earnings Per Share dollars in thousands [GRAPH] [GRAPH] $4,937 $6,134 $6,756 $5,836 $7,989 $1.25 $1.56 $1.81 $1.60 $2.23 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 [PHOTO]
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[PHOTO GRAPHIC] LETTER FROM THE PRESIDENT [PHOTO] Larry G. Dillon Chairman, President and Chief Executive Officer Dear Fellow Shareholders On behalf of the Board of Directors, I am pleased to present the Annual Report of C&F Financial Corporation for the year 2001, another year in which we achieved record growth and earnings. It was a year where unmatched drops in interest rates stagnated the earnings at Citizens and Farmers Bank, yet precipitated record production and earnings at C&F Mortgage Corporation. It was also a year in which our country experienced unbelievable acts of terrorism, which in turn played havoc on our economy. These acts brought back both patriotic and spiritual values and served to unite us as a country. The record-breaking results of our company are pale compared to what has happened to us as a country. The year 2001 will be one none of us will ever forget. Net income in 2001 totaled just under $7.2 million (excluding the $776,000 after-tax gain on the sale of the Tappahannock Office to Northern Neck State Bank, which occurred in the 4th quarter), up 24% from $5.8 million earned in 2000. This resulted in a return on average assets of 1.89% and a return on average equity of 17.09%, up from 1.76% and 15.99%, respectively, in 2000. Our earnings also compare favorably with those of our peers who, as of September 2001, showed average annualized returns on average assets of 1.03% and average equity of 11.15%. Earnings per share jumped from $1.60 to $2.01. Earnings for the Corporation are up primarily due to the superb results of C&F Mortgage Corporation. You will note as you review this report that the unprecedented eleven drops of the federal funds rate drastically affected the Bank's interest spread, which dropped by 34 basis points during the year. This drop negated the Bank's asset growth for the year and, as mentioned above, was primarily responsible for the flat earnings of the Bank. Also impacting the Bank was the increase in overhead costs associated with opening two new branches and the new technology implemented over the last eighteen months. The significant drop in interest rates, on the other hand, tremendously helped the Mortgage Corporation. With interest rates down, C&F Mortgage saw its loan production more than double, increasing from $294 million in 2000 to $627 million in 2001, which resulted in more than a 400% growth in earnings. Also affecting earnings in 2001 was the growth in revenues and earnings of both C&F Title Agency, Inc. and C&F Investment Services, Inc., both of which saw their earnings more than double. The sale of the Tappahannock Office resulted in a one-time $776,000 after-tax gain. This sale to Northern Neck State Bank was the result of an unsolicited offer from them that made economic sense to us; in addition, Tappahannock is far removed from the rest of our branch network. We saw many exciting changes for the Corporation in 2001. The most notable was the opening of our new 25,000 sq. ft. facility in Midlothian, which is now the headquarters for C&F Mortgage 2 C & F Financial Corporation
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[PHOTO] The unique lobby design provides a warm atmosphere to welcome customers into the Citizens & Commerce Bank branch on Alverser Drive in Midlothian. Corporation and Citizens & Commerce Bank, a division of Citizens and Farmers Bank. This facility, located in a new commercial development appropriately named the "C&F Center," offers the Mortgage Corporation greatly expanded facilities at a strategically located site and allows us room for future expansion. The bank portion of this facility offers Citizens & Commerce Bank not only a new and strategically important location, but has been designed and built as one of the most unique banking lobbies in the country. In addition to the typical offices, teller line and new account desks, it offers the customers two large television screens to watch continuously running news and two Internet workstations to be able to "surf the net." In addition, there is a coffee bar, from which the net proceeds of coffee sales will be given to various local charities. These combined amenities provide for an inviting setting to the customer, which is what we want. This philosophy is very different from some of our larger competitors who are doing all they can to keep the customers out of their branches. Also located within this facility are the headquarters of C&F Title Agency, Inc. and an office of C&F Investment Services, Inc. We can now offer all of our customers and potential customers in the Midlothian market full banking services, brokerage services and mortgage banking services. It truly is a financial "center." In December of 2001, we also opened our twelfth banking office, in Sandston. This freestanding office offers all of the same inviting amenities as our Midlothian office. Given the overwhelming volume of new accounts being opened, this office may become one of our busiest locations. We saw many exciting changes for the Corporation in 2001. The most notable was the opening of our new 25,000 sq. ft. facility in Midlothian, which is now the headquarters for C&F Mortgage Corporation and Citizens & Commerce Bank, a division of Citizens and Farmers Bank. 2001 Annual Report 3
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[PHOTO] Employees and customers enjoy the spacious coffee bar, television and Internet area at the Citizens & Commerce Bank branch on Alverser Drive. In January of 2001, we began offering our customers "imaged" monthly statements. This service allows us to offer our customers condensed images of their cleared checks in a manner that allows them to better organize their home record keeping. [75 YRS. LOGO] We make every effort to provide our customers with the best products and services possible, therefore, we must constantly be improving our training and technology. The year 2001 was no exception, as we made several enhancements to both our technology and offerings. Unseen to the customer, and possibly most important to our speed of delivery, was a replacement of our mainframe computer system during 2001. Not only will this change increase our computing speed and capacity, it will also keep us at the forefront of computing hardware. In January of 2001, we began offering our customers "imaged" monthly statements. This service allows us to offer our customers condensed images of their cleared checks in a manner that allows them to better organize their home record keeping. This system also offers two other important services. First, it allows our internal research, either for our own purposes or that of the customer, to be almost instantaneous. Secondly, after initiating our Internet banking service in the spring of 2001, our customers now have the ability to see the image of any cleared check online. Not only do our Internet banking customers have the ability to "see" their cleared items, they are now able to perform just about any banking transaction online in the privacy of their own homes and at their own convenience. With our system being "real time," no matter whether the customer is performing the transaction or inquiry within the branch, on our telephone banking system, or over the Internet, the customer will always receive the same information. The Board of Directors was sad to receive the recent resignation of P. Loy Harrell from the Board of Citizens and Farmers Bank, where he 4 C & F Financial Corporation
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[PHOTO GRAPHIC] had served as a Board member since 1966. The entire Board will sorely miss Mr. Harrell's experience, depth of knowledge and guidance. During 2001, the Board appointed Audrey D. Holmes to the Board of Citizens and Farmers Bank. Ms. Holmes is a local attorney in the Sandston market and not only provides knowledge of that market but also of the Charles City County market where she has been a lifelong resident. Her knowledge of and respect in both markets as well as her expertise will be a great benefit to the Board. At its meeting in January 2002, the Board appointed Barry R. Chernack, who has served as a member of the Board of Directors of Citizens and Farmers Bank since 2000, to the Board of C&F Financial Corporation. Mr. Chernack, a past managing partner of PriceWaterhouseCoopers LLP, will bring considerable accounting and business knowledge to both the Board and its Audit Committee. The directors, officers, and staff of C&F Financial Corporation are committed to supporting the communities in which we are located and demonstrate that support in many fashions. Most of our staff are very active in various civic groups, often giving many hours of their personal time. These activities range from overseeing various "walk-a-thons," to coaching at the local high school, to serving on local community boards. We are very appreciative of the communities we serve and try to give back in ways that keep us involved in these communities. Our philosophy at C&F is that in order for us to be successful on a long-term basis, which is our primary goal, we have to look out for the interests of three constituencies: our staff, who provide the backbone of what we do; the communities we serve, who provide our customers and without which we would not exist; and our stockholders, who provide us the financial support. To look out for one above the others would lead to failure. The interests of all have to be well served. We look out for our staff members by trying to assure fair compensation and benefits packages to provide for them and their families; we provide them with growth and educational opportunities; and, we are constantly challenging them with the changes both within the organization as well as the industry. We care for our communities by providing the best in products and services we possibly can and we give back both personally and financially in as many ways as possible. And finally, we look out for you, our stockholders, by striving to provide the best returns possible. We are ever cognizant that to remain a viable long-term organization we must provide you with a solid return on your investment. We are not perfect, however we do strive for perfection in all we do. Our thanks and appreciation go out to all of our constituencies for helping to make this organization what it is - a truly fine financial services corporation. We thank you for your support and ask for your continued patronage as we celebrate our 75th year of providing financial services. /s/ Larry G. Dillon Larry G. Dillon Chairman, President and Chief Executive Officer [PHOTO] Kitty Buckner-Branch Manager and Alice Robbins-Assistant Branch Manager discuss new customer opportunities at our Citizens and Farmers Bank branch in Sandston. 2001 Annual Report 5
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DIRECTORS AND ADVISORS [PHOTO] Citizens and Farmers Bank (back left to right)-- Bryan E. McKernon, Reginald H. Nelson IV, Paul C. Robinson, J. P. Causey Jr., James H. Hudson III, Joshua H. Lawson, and Thomas B. Whitmore Jr. (front left to right) Barry R. Chernack, Larry G. Dillon, Audrey D. Holmes, and William E. O'Connell Jr. C&F Financial Corporation/Citizens and Farmers Bank J. P. Causey Jr.*+ Senior Vice President, Secretary & General Counsel Chesapeake Corporation Barry R. Chernack*+ Retired Partner PriceWaterhouseCoopers LLP Larry G. Dillon *+ Chairman, President & CEO C&F Financial Corporation Citizens and Farmers Bank P. L. Harrell+ President Old Dominion Grain, Inc. Audrey D. Holmes+ Attorney-at-Law Audrey D. Holmes, Attorney-at-Law James H. Hudson III*+ Attorney-at-Law Hudson & Bondurant, P.C. Joshua H. Lawson*+ President Thrift Insurance Corporation Bryan E. McKernon+ President & CEO C&F Mortgage Corporation Reginald H. Nelson IV+ Retired Partner Colonial Acres Farm William E. O'Connell Jr.*+ Chessie Professor of Business The College of William and Mary Paul C. Robinson*+ Owner & President Francisco, Robinson & Associates, Realtors Thomas B. Whitmore Jr.+ Retired President Whitmore Chevrolet, Oldsmobile, Pontiac Co., Inc. Citizens & Commerce Bank Frank Bell III President Citizens & Commerce Bank Jeffery W. Jones Chairman & Chief Executive Officer WFofR, Incorporated S. Craig Lane President Lane & Hamner, P.C. William E. O'Connell Jr. Chairman of the Board Chessie Professor of Business The College of William and Mary Meade A. Spotts President Spotts, Fain, Chappell & Anderson, P.C. Scott E. Strickler Treasurer Robins Insurance Agency, Inc. Katherine K. Wagner Senior Vice President Commercial Lending Citizens & Commerce Bank C&F Mortgage Corporation J. P. Causey Jr. Senior Vice President, Secretary & General Counsel Chesapeake Corporation Larry G. Dillon Chairman of the Board James H. Hudson III Attorney-at-Law Hudson & Bondurant, P.C. Bryan E. McKernon President & CEO C&F Mortgage Corporation William E. O'Connell Jr. Chessie Professor of Business The College of William and Mary Paul C. Robinson Owner & President Francisco, Robinson & Associates, Realtors C&F Investment Services, Inc. Larry G. Dillon President Eric F. Nost Vice President Thomas F. Cherry Treasurer Gari B. Sullivan Secretary * C&F Financial Corporation Board Member + Citizens and Farmers Bank Board Member Citizens & Commerce Bank Board (back left to right)-- Scott E. Strickler, S. Craig Lane, Katherine K. Wagner, Frank Bell III, and William E. O'Connell Jr. (front left to right) Jeffery W. Jones and Meade A. Spotts [PHOTO] 6 C & F Financial Corporation
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OFFICERS AND LOCATIONS [GRAPHIC] Independent Public Accountants Yount, Hyde & Barbour, P.C. Winchester, VA Corporate Counsel Hudson & Bondurant, P.C. West Point, VA Varina Advisory Board Robert A. Canfield Attorney-at-Law Canfield, Shapiro, Baer, Heller & Johnston Robert F. Nelson Jr. Professional Engineer Engineering Design Associates Phil T. Rutledge Jr. Retired Deputy County Manager County of Henrico Sandra W. Seelmann Real Estate Broker/Owner Varina & Seelmann Realty Citizens and Farmers Bank ADMINISTRATIVE OFFICE 802 Main Street West Point, Virginia 23181 (804) 843-2360 Larry G. Dillon * Chairman, President & CEO Maria E. Campbell Senior Vice President, Retail Thomas F. Cherry * Senior Vice President & CFO Gari B. Sullivan * Senior Vice President & Secretary Leslie A. Campbell Vice President, Loan Operations Sandra S. Fryer Vice President, Operations William B. Littreal Vice President, Information Systems Deborah R. Nichols Vice President, Quality Control Laura H. Shreaves Vice President & Director of Human Resources * Officers of C&F Financial Corporation WEST POINT -- MAIN OFFICE Thomas W. Stephenson Jr. Branch Manager 802 Main Street West Point, Virginia 23181 (804) 843-2360 JAMESTOWN ROAD Alec J. Nuttall Assistant Vice President & Branch Manager 1167 Jamestown Road Williamsburg, Virginia 23185 (757) 220-3293 LONGHILL ROAD Sandra C. St. Clair Assistant Vice President & Branch Manager 4780 Longhill Road Williamsburg, Virginia 23188 (757) 565-0593 MIDDLESEX N. Susan Gordon Assistant Vice President & Branch Manager Route 33 at Route 641 Saluda, Virginia 23149 (804) 758-3641 NORGE Robert J. Unangst Branch Manager 7534 Richmond Road Norge, Virginia 23127 (757) 564-8114 PROVIDENCE FORGE James D. W. King Vice President & Branch Manager 3501 N. Courthouse Road Providence Forge, Virginia 23140 (804) 966-2264 QUINTON Mary T. "Joy" Whitley Assistant Vice President & Branch Manager 2580 New Kent Highway Quinton, Virginia 23141 (804) 932-4383 SANDSTON Katherine P. Buckner Assistant Vice President & Branch Manager 100 East Williamsburg Road Sandston, Virginia 23150 (804) 737-7005 VARINA Susan M. Terry Branch Manager Route 5 at Strath Road Richmond, Virginia 23231 (804) 795-7000 Tracy E. Pendleton Vice President & Area Credit Manager (804) 795-7706 WEST POINT -- 14TH STREET Karen T. Richardson Assistant Vice President & Branch Manager 415 Fourteenth Street West Point, Virginia 23181 (804) 843-2708 CONSTRUCTION LENDING OFFICE Terrence C. Gates Vice President, Real Estate Construction C&F Center 1400 Alverser Drive Midlothian, Virginia 23113 (804) 858-8351 Citizens & Commerce Bank ADMINISTRATIVE OFFICE C&F Center 1400 Alverser Drive Midlothian, Virginia 23113 (804) 378-0332 Frank Bell III President Katherine K. Wagner Senior Vice President Commercial Lending MIDLOTHIAN Sandra R. Gee Branch Manager C&F Center 1400 Alverser Drive Midlothian, Virginia 23113 (804) 378-0332 RICHMOND Michele Hottle Branch Manager 8001 West Broad Street Richmond, Virginia 23294 (804) 290-0402 2001 Annual Report 7
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OFFICERS AND LOCATIONS [GRAPHIC] C&F Mortgage Corporation ADMINISTRATIVE OFFICE 1400 Alverser Drive Midlothian, VA 23113 (804) 858-8300 Bryan E. McKernon President & Chief Executive Officer Mark A. Fox Executive Vice President & Chief Financial Officer Donna G. Jarratt Senior Vice President & Project Manager Kevin A. McCann Vice President & Controller Tracy L. Bishop Vice President & Human Resources Manager M. Kathy Burley Vice President & Closing Manager James A. Ryan, III Vice President & Underwriting Manager RICHMOND, VIRGINIA 1400 Alverser Drive Midlothian, VA 23113 (804) 858-8300 Donald R. Jordan Vice President & Branch Manager Daniel J. Murphy Vice President & Production Manager Susan P. Burkett Vice President & Operations Manager RICHMOND, VIRGINIA 7231 Forest Avenue, Suite 202 Richmond, Virginia 23226 (804) 673-3453 Page C. Yonce Vice President & Branch Manager Constance Bachman-Hamilton Vice President & Production Manager CHESTER, VIRGINIA 4517 West Hundred Road Chester, Virginia 23831 (804) 748-2900 Stephen L. Fuller Vice President & Branch Manager CHARLOTTESVILLE, VIRGINIA 1420 Greenbrier Place Charlottesville, Virginia 22901 (434) 974-1450 William E. Hamrick Vice President & Branch Manager Philip N. Mahone Vice President & Branch Manager NEWPORT NEWS, VIRGINIA 703 Thimble Shoals Boulevard, Suite C4 Newport News, Virginia 23606 (757) 873-8200 Linda H. Gaskins Vice President & Branch Manager WILLIAMSBURG, VIRGINIA 1167-A Jamestown Road Williamsburg, Virginia 23185 (757) 259-1200 Irving E. "Ed" Jenkins Vice President & Branch Manager LYNCHBURG, VIRGINIA 17835 Forest Road, Suite B Forest, Virginia 24551 (434) 385-0700 J. Garnett Atkins Vice President & Branch Manager CROFTON, MARYLAND 2191 Defense Highway, Suite 200 Crofton, Maryland 21114 (410) 721-6770 Michael J. Mazzola Senior Vice President & Maryland Area Manager ANNAPOLIS, MARYLAND 20 Ridgely Avenue, Suite 302 Annapolis, Maryland 21401 (410) 263-9229 William J. Regan Vice President & Branch Manager ELLICOTT CITY, MARYLAND 5052 Dorsey Hall Drive Suite 202 Ellicott City , MD 21042 (410) 964-9223 Scott B. Segrist Branch Manager Robert G. Menton Branch Manager APPRAISAL SERVICES 1400 Alverser Drive Midlothian, VA 23113 (804) 858-8300 H. Daniel Salomonsky Vice President & Appraisal Manager C&F Title Agency, Inc. 1400 Alverser Drive Midlothian, VA 23113 (804) 858-8399 Eileen A. Cherry Vice President & Title Insurance Underwriter C&F Investment Services, Inc. Eric F. Nost Vice President & Manager 417 Fourteenth Street West Point, Virginia 23181 (804) 843-4584 (800) 583-3863 Douglas L. Hartz Assistant Vice President 1400 Alverser Drive Midlothian, Virginia 23113 (804) 378-7296 (888) 435-2033 Douglas L. Cash, Jr. Branch Manager 1167 Jamestown Road Williamsburg, Virginia 23185 (757) 229-5629 8 C & F Financial Corporation
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[C&F LOGO] [LOGO] C F F I ------- NASDAQ LISTED Stock Listing Current market quotations for the common stock of C&F Financial Corporation are available under the symbol CFFI. Stock Transfer Agent American Stock Transfer & Trust Company serves as transfer agent for the Corporation. You may write them at 40 Wall Street, New York, NY 10005, or telephone them toll-free at 1-800-937-5449. Investor Relations & Financial Statements A copy of Form 10-K and quarterly reports on Form 10-Q, as filed with the Securities and Exchange Commission, are available without charge to stockholders upon written request. Requests for this or other financial information about C&F Financial Corporation should be directed to: Thomas Cherry Senior Vice President and Chief Financial Officer C&F Financial Corporation P.O. Box 391 West Point, VA 23181
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[C&F LOGO] C&F Financial Corporation 802 Main Street o PO Box 391 West Point, Virginia 23181 (804) 843-2360 www.cffc.com
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Filing Submission 0000916641-02-000437   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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