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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
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or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________________to_______________________
Commission file number 000-23423
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C&F FINANCIAL CORPORATION
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(Exact name of registrant as specified in its charter)
Virginia 54-1680165
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Eighth and Main Streets, West Point, VA 23181
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 843-2360
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Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $1.00 Par
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(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. (X) Yes ( ) No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
The aggregate market value of the Common Stock held by non-affiliates of the
Registrant was approximately $50,171,000 as of March 21, 2000.
The number of shares outstanding of the registrant's common stock, $1.00 par
value was $3,644,324 at March 21, 2000.
TABLE OF CONTENTS
PART I
ITEM 1. BUSINESS.................................................. page 1
ITEM 2. PROPERTIES................................................ page 2
ITEM 3. LEGAL PROCEEDINGS......................................... page 3
ITEM 4. SUBMISSION OF MATTERS
TO A VOTE OF SECURITY HOLDERS............................ page 3
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.......................... page 4
ITEM 6. SELECTED FINANCIAL DATA................................... page 4
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION............. page 4
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK..................................................... page 4
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA............... page 4
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE................... page 4
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT........................................ page 5
ITEM 11. EXECUTIVE COMPENSATION.................................... page 5
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.................................... page 5
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS............................................. page 6
PART IV
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K.......................... page 6
DOCUMENTS INCORPORATED BY REFERENCE
Location in Form 10-K Incorporated Document
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PART II
- -------
Item 5 - Market for Registrants Common The Corporation's 1999 Annual Report to Shareholders for
fiscal years ended December 31, 1999, Quarterly Condensed
Equity and Related Stockholder Matters Statements of Income-Unaudited, page 43, and Investor
Information, page 45.
Item 6 - Selected Financial Data The Corporation's 1999 Annual Report to Shareholders for
fiscal years ended December 31, 1999, Five Year Financial
Summary, page 10.
Item 7 - Management's Discussion and The Corporation's 1999 Annual Report to Shareholders
Analysis of Financial Conditions for the fiscal years ended December 31, 1999,
and Results of Operations Management's Discussion and Analysis of Financial
Condition and Results of Operations, pages 9 through 23.
Item 7a - Quantitative and Qualitative Disclosures The Corporation's 1999 Annual Report to Shareholders
about Market Risk for the fiscal years ended December 31, 1999, Market
Risk Management, pages 14 through 16.
Item 8 - Financial Statements and The Corporation's 1999 Annual Report to Shareholders
Supplementary Data for fiscal years ended December 31, 1999, Consolidated
Financial Statements, Notes to Consolidated Financial
Statements, and Independent Auditors' Report,
pages 24 through 44.
PART III
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Item 10 - Directors and Executive The Corporation's 2000 Proxy Statement, Election of
Officers of the Registrant Directors, pages 3 through 4.
Item 11 - Executive Compensation The Corporation's 2000 Proxy Statement, Executive
Compensation, pages 5 through 7.
Item 12 - Security Ownership of Certain The Corporation's 2000 Proxy Statement, Principal
Beneficial Owners and Management Holders of Capital Stock, page 2.
Item 13 - Certain Relationships and The Corporation's 2000 Proxy Statement, Interest of
Related Transactions Management in Certain Transactions, page 5.
PART I
ITEM 1. BUSINESS
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General
C&F Financial Corporation (the "Corporation") is a bank holding company which
was incorporated under the laws of the Commonwealth of Virginia in March, 1994.
The Corporation owns all of the stock of its sole subsidiary, Citizens and
Farmers Bank (the "Bank"), which is an independent commercial bank chartered
under the laws of the Commonwealth of Virginia. The Bank has a total of ten
branches including the main office. The Bank has its main office at Eighth and
Main Streets, West Point, Virginia, and has branch offices in the locations of
Richmond, Norge, Middlesex, Providence Forge, Quinton, Tappahannock, Varina,
Williamsburg, and West Point (two branches). The Bank was originally opened for
business under the name Farmers and Mechanics Bank on January 22, 1927.
The local community served by the Bank is defined as those portions of King
William County, King and Queen County, Hanover County and Henrico County which
are east of Route 360; Essex, Middlesex, New Kent, Charles City, and James City
Counties; that portion of York County which is directly north of James City
County; that portion of Gloucester County surrounded by Routes 14 and 17; and
the western portion of the City of Richmond along the Route 250 corridor.
The Corporation, through its subsidiaries, offers a wide range of banking
services available to both individuals and small businesses. These services
include various types of checking and savings deposit accounts, and the making
of business, real estate, development, mortgage, home equity, automobile, and
other installment, demand and term loans. Also, the Bank offers ATMs at all
locations, credit card services, trust services, travelers' checks, money
orders, safe deposit rentals, collections, notary public, wire services, and
other customary bank services to its customers.
The Bank has four wholly-owned subsidiaries, C & F Title Agency, Inc., C&F
Investment Services, Inc., C&F Insurance Services, Inc., and C&F Mortgage
Corporation, all incorporated under the laws of the Commonwealth of Virginia.
C&F Title Agency, Inc. sells title insurance to the mortgage loan customers of
the Corporation. C&F Investment Services, Inc., organized April 1995, is a
full-service brokerage firm offering a comprehensive range of investment options
including stocks, bonds, annuities, and mutual funds. C&F Insurance Services,
Inc., organized in July 1999, owns 2.4% of the Virginia Bankers Insurance
Center, LLC which is in the process of buying an existing insurance agency. C&F
Mortgage Corporation, organized in September 1995, originates and sells
residential mortgages. See Note 16 to the Consolidated Financial Statements for
summarized financial information by business segment.
1
C&F Mortgage Corporation provides mortgage services through seven locations
in Virginia and two in Maryland. The Virginia offices are in Richmond (two
locations), Williamsburg, Newport News, Charlottesville, Lynchburg, and
Chester. The Maryland offices are in Crofton and Columbia.
As of December 31, 1999, a total of 278 persons were employed by the
Corporation, of whom 24 were part-time. The Corporation considers relations
with its employees to be excellent.
Competition
The Bank is subject to competition from various financial institutions and
other companies or firms that offer financial services. The Bank's principal
competition in its market area consists of all the major statewide banks. The
Bank also competes for deposits with savings associations, credit unions, money-
market funds, and other community banks. In making loans, the Bank competes with
consumer finance companies, credit unions, leasing companies, and other lenders.
C&F Mortgage Corporation competes for mortgage loans in its market areas with
other mortgage companies, commercial banks, and other financial institutions.
C&F Investment Services and C&F Insurance Services compete with other
investment companies, brokerage firms, and insurance companies to provide these
services.
C&F Title Agency competes with other title companies.
Regulation and Supervision
The Corporation is subject to regulation by the Federal Reserve Bank under
the Bank Holding Company Act of 1956. The Corporation is also under the
jurisdiction of the Securities and Exchange Commission and certain state
securities commissions with respect to matters relating to the offer and sale of
its securities. In addition, the Bank is subject to regulation and examination
by the State Corporation Commission and the Federal Deposit Insurance
Corporation.
ITEM 2. PROPERTIES
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The following describes the location and general character of the principal
offices and other materially important physical properties of the Corporation
and its subsidiary.
The Corporation owns the headquarters located at Eighth and Main Streets in
the business district of West Point, Virginia. The building, originally
constructed in 1923, has three floors totaling 15,000 square feet. This building
houses the Citizens and Farmers Bank main office branch and office space for the
Coorporation's administrative personnel.
2
The Corporation owns a building located at Seventh and Main Streets in West
Point, Virginia. The building provides space for Citizens and Farmers Bank
operations functions and staff. The building was originally constructed prior to
1935 and remodeled by the Corporation in 1991. The two-story building has 20,000
square feet.
The Corporation also owns a building located at Sixth and Main Streets in
West Point, Virginia. The building provides space for Citizens and Farmers Bank
loan operations functions and staff. The building was bought and remodeled by
the Corporation in 1998. The building has 5,000 square feet.
Citizens and Farmers Bank owns ten other branch locations in Virginia. Also,
the Bank owns several lots in West Point, Virginia, and one other lot in New
Kent County, Virginia.
C&F Mortgage Corporation has nine leased offices, seven in Virginia and two
in Maryland. Rental expense for these locations totaled $330,000 for the year
ended December 31, 1999.
All of the Corporation's properties are in good operating condition and are
adequate for the Corporation's present and anticipated future needs.
ITEM 3. LEGAL PROCEEDINGS
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There are no material pending legal proceedings to which the Corporation is a
party or of which the property of the Corporation is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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No matters were submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders of the Corporation through
a solicitation of proxies or otherwise.
3
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
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The information contained on pages 43 and 45 of the 1999 Annual Report to
Shareholders, which is attached hereto as Exhibit 13, under the captions, "Note
18: Quarterly Condensed Statements of Income - Unaudited" and "Investor
Information," is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
-----------------------
The information contained on page 10 of the 1999 Annual Report to
Shareholders, which is attached hereto as Exhibit 13, under the caption, "Five
Year Financial Summary," is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
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OF OPERATION
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The information contained on pages 9 through 23 of the 1999 Annual Report to
Shareholders, which is attached hereto as Exhibit 13, under the caption,
"Management's Discussion and Analysis of Financial Condition and Results of
Operation," is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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The information contained on pages 14 through 16 of the 1999 Annual Report to
Shareholders, which is attached hereto as Exhibit 13, under the caption,
"Management's Discussion and Analysis of Financial Condition and Results of
Operation," is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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The information contained on pages 24 through 44 of the 1999 Annual Report to
Shareholders, which is attached hereto as Exhibit 13, under the captions,
"Consolidated Financial Statements," "Notes to Consolidated Financial
Statements," and "Independent Auditors' Report," is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE
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None.
4
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
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The information required by Item 10 with respect to the Directors of the
Registrant is contained on pages 3 through 4 of the 2000 Proxy Statement, which
is attached hereto as Exhibit 99, under the caption, "Election of Directors," is
incorporated herein by reference.
The information in the following table pertains to the executive officers of
the Corporation.
Executive Officers of C&F Financial Corporation
Name (Age) Business Experience Number of Shares Beneficially
Present Position During Past Five Years Owned as of March 21, 2000
- ------------------------- ------------------------------------------------ ----------------------------------------------
Larry G. Dillon (47) President of the Bank since 1989 47,634 /(1)/
Chairman, President and
Chief Executive Officer
Gari B. Sullivan (62) Senior Vice President of the Bank since 1990 9,451 /(1)/
Secretary
Thomas F. Cherry (31) Promoted to Senior Vice President of the Bank in 3,500 /(1)/
Chief Financial Officer December 1998; Vice President of the Bank from
December 1996 to December 1998; Manager with Price
Waterhouse, LLP in Norfolk, prior to December 1996
/(1)/ Includes exercisable options of 17,500, 7,167, and 3,300 held by Messrs.
Dillon, Sullivan, and Cherry, respectively.
ITEM 11. EXECUTIVE COMPENSATION
----------------------
The information contained on pages 5 through 7 of the 2000 Proxy Statement,
which is attached hereto as Exhibit 99, under the caption, "Executive
Compensation," is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP ON CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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The information contained on page 2 of the 2000 Proxy Statement, which is
attached hereto as Exhibit 99, under the caption, "Principal Holders of Capital
Stock," is incorporated herein by reference.
5
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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The information contained on page 5 of the 2000 Proxy Statement, which is
attached hereto as Exhibit 99, under the caption, "Interest of Management In
Certain Transactions," is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
14 (a) Exhibits
Exhibit No. 3: Articles of Incorporation and Bylaws
Articles of Incorporation and Bylaws of C&F Financial Corporation
filed as Exhibit Nos. 3.1 and 3.2, respectively, to Form 10KSB
filed March 29, 1996, of C&F Financial Corporation is
incorporated herein by reference.
Exhibit No. 10: Material Contracts
Exhibit No. 13: C&F Financial Corporation 1999 Annual Report to
Shareholders
Exhibit No. 21: Subsidiaries of the Registrant
Citizens and Farmers Bank, incorporated in the Commonwealth of
Virginia (100% owned)
Exhibit No. 23: Consents of experts and counsel
23.1 Consent of Yount, Hyde & Barbour, P.C.
Exhibit No. 27: Financial Data Schedule
Exhibit No. 99: Additional Exhibits
99.1 C&F Financial Corporation 1999 Annual Meeting Proxy
Statement
14 (b) Reports on Form 8-K filed in the fourth quarter of 1999:
None.
14 (c) Exhibits to this Form 10-K are either filed as part of this Report
or are incorporated herein by reference.
14 (d) Financial Statements Excluded from Annual Report to Shareholders
pursuant to Rule 14a3(b).
Not applicable.
6
SIGNATURES
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Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, C&F Financial Corporation has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized:
C&F FINANCIAL CORPORATION
__________________________________ ______________________________
Larry G. Dillon Thomas F. Cherry
Chairman, President and Chief Executive Officer Senior Vice President and
Chief Financial Officer
Date: March 21, 2000 Date: March 21, 2000
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Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Date: March 21, 2000
__________________________________ ------------------------------
J. P. Causey Jr., Director
Date: March 21, 2000
__________________________________ ------------------------------
James H. Hudson III, Director
Date: March 21, 2000
__________________________________ ------------------------------
Larry G. Dillon, Director
Date: March 21, 2000
__________________________________ ------------------------------
William E. O'Connell Jr., Director
Date: March 21, 2000
__________________________________ ------------------------------
Sture G. Olsson, Director