C&F Financial reports $8.28 million net income for Q3 2026

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For the quarterly period ended June September 30, 2026

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At August 6, November 4, 2026, the latest practicable date for determination, 3,251,691 3,249,776 shares of common stock, $1.00 par value, of the registrant were outstanding.

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Financial statements 164 changes

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$ 466,683 483,466 and $ 471,036 , respectively

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Loans, net of allowance for credit losses of $ 39,675 39,638 and $ 39,677 , respectively

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Common stock ($ 1.00 par value, 8,000,000 shares authorized, 3,250,307 3,251,123 and 3,245,972 shares issued and outstanding, respectively, includes 98,973 98,943 and 100,578 of unvested shares, respectively)

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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Less net (loss) income attributable to noncontrolling interest ( 18 )

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

Other comprehensive income (loss) income, net of tax:

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Comprehensive income

Other comprehensive income (loss) income, net of tax

Comprehensive (loss) income

Less comprehensive (loss) income attributable to noncontrolling interest ( 18 )

Comprehensive (loss) income attributable to C&F Financial Corporation ( 8,039 )

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FOR THE THREE MONTHS ENDED JUNE SEPTEMBER 30, 2026 AND 2025

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Balance March 31, 2026

Comprehensive income:

Balance June 30, 2026

Other comprehensive income loss

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Balance June 30, 2026

Balance September 30, 2026

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Balance March 31, 2025

Balance June 30, 2025

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Other comprehensive loss income

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Balance June 30, 2025

Balance September 30, 2025

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FOR THE SIX NINE MONTHS ENDED JUNE SEPTEMBER 30, 2026 AND 2025

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Other comprehensive income loss

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Cash dividends declared ($ 0.96 1.44 per share)

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Balance June 30, 2026

Balance September 30, 2026

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Cash dividends declared ($ 0.92 1.38 per share)

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Balance June 30, 2025

Balance September 30, 2025

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Six Months Ended June 30,

Nine Months Ended September 30,

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Adjustments to reconcile net income to net cash provided by (used by) operating activities:

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Net cash provided by (used by) operating activities

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Purchases of loans held for investment by non-bank affiliates ( 88,441 132,184 )

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Proceeds from bank-owned life insurance

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Net (decrease) increase in demand, savings and money market deposits ( 3,612 18,213 )

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Basis of Presentation: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of operations in these financial statements, have been made. The results of operations for the three and six nine months ended June September 30, 2026 are not necessarily indicative of the results to be expected for any other interim period or for the full year.

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Recent Significant Accounting Pronouncements: In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, " Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures. " The amendments in ASU 2024-03 require disaggregated disclosure of income statement expenses for public business entities. Such disclosures must be made on an annual and interim basis in a tabular format in the footnotes to the financial statements. The amendments require companies to disclose disaggregated information about specific natural expense categories that are considered relevant and applicable, including (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) oil and gas activities. The amendments also provide clarification regarding identifying relevant expenses captions and requires require disclosure of selling expenses on an annual and interim basis. Entities are required to apply the guidance in ASU 2024-03 consistently for all periods presented and the guidance is effective for all public business entities for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments are to be applied on a prospective basis; however, retrospective application is permitted. The Corporation does not expect the adoption of ASU 2024-03 to have a material effect on its consolidated financial statements.

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The Corporation's debt securities, all of which are classified as available for sale, are summarized in the following tables. The Corporation has elected to exclude accrued interest receivable, totaling $ 2.68 3.10 million and $ 2.67 million at June September 30, 2026 and December 31, 2025, respectively, from the amortized cost basis of securities.

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The amortized cost and estimated fair value of securities at June September 30, 2026, by the earlier of contractual maturity or expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.

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Six Months Ended June 30,

The following table presents the gross realized gains and losses on and the proceeds from the sales, maturities and calls of securities. During the three and six nine months ended June September 30, 2026, the Corporation received $ 69.2 million of proceeds related to sales of securities with a book value of $ 76.3 million, resulting in a pre-tax loss of $ 7.1 million. There were no sales of securities during the three months ended September 30, 2026 and six the three and nine months ended June September 30, 2025.

Three Months Ended June September 30,

Nine Months Ended September 30,

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The Corporation pledges securities primarily to secure municipal deposits and lines of credit that provide liquidity to the Corporation and C&F Bank. Securities with an aggregate amortized cost of $ 120.85 118.59 million and an aggregate fair value of $ 118.50 110.62 million were pledged at June September 30, 2026. Securities with an aggregate amortized cost of $ 138.43 million and an aggregate fair value of $ 130.88 million were pledged at December 31, 2025.

Securities in an unrealized loss position at June September 30, 2026, by duration of the period of the unrealized loss, are shown below.

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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.

There were 336 635 debt securities with a fair value below the amortized cost basis, totaling $ 291.92 438.81 million of aggregate fair value as of June September 30, 2026. The Corporation concluded that a credit loss did not exist in its securities portfolio at June September 30, 2026, and no allowance for credit losses has been recognized based on the fact that as of June September 30, 2026 (1) changes in fair value were caused primarily by fluctuations in interest rates or other market factors, such as changes in demand, (2) securities with unrealized losses had generally high credit quality, (3) the Corporation intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Corporation will not be required to sell these investments before a recovery of its investment, and (4) issuers have continued to make timely payments of principal and interest. Additionally, the Corporation's mortgage-backed securities are entirely issued by either U.S. government agencies or U.S. 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.

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The Corporation's investment in restricted stock totaled $ 4.06 5.01 million at June September 30, 2026 and $ 3.68 million at December 31, 2025 and consisted of Federal Home Loan Bank of Atlanta (FHLB) stock. Restricted stock is generally viewed as a long-term investment, which is carried at cost because there is no market for the stock other than to be redeemed or repurchased by the FHLB. Therefore, when evaluating restricted stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing any temporary decline in value. The Corporation did not consider its investment in restricted stock to be impaired at June September 30, 2026 and no impairment has been recognized.

The Corporation's loans are stated at their face amount, net of deferred fees and costs and discounts, and consist of the classes of loans included in the following table. The Corporation has elected to exclude accrued interest receivable, totaling $ 9.08 9.19 million and $ 9.04 million at June September 30, 2026 and December 31, 2025, respectively, from the recorded balance of loans.

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Other consumer loans included $ 259,000 244,000 and $ 240,000 of demand deposit overdrafts at June September 30, 2026 and December 31, 2025, respectively.

The following table shows the aging of the Corporation's loan portfolio, by class, at June September 30, 2026.

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The table above includes nonaccrual loans that are current of $ 74,000 , 30-59 days past due of $ 10,000 , 60-89 days past due of $ 117,000 227,000 and 90+ days past due of $ 1.62 1.79 million.

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The following table shows the Corporation's recorded balance of loans on nonaccrual status as of June September 30, 2026 and December 31, 2025. The Corporation recognized $ 12,000 14,000 and $ 25,000 39,000 in interest income for the three and six nine months ended June September 30, 2026 on loans on nonaccrual status as of June September 30, 2026, respectively, and had none and $ 9,000 reversals of interest income upon placing loans on nonaccrual status during both of the three and six nine months ended June September 30, 2026, respectively. All nonaccrual loans at June September 30, 2026 and December 31, 2025 had an allowance for credit losses, with none individually evaluated.

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Six Months Ended June 30, 2026

The following tables present the amortized cost basis of loans as of June September 30, 2026 and 2025 that were both experiencing financial difficulty and modified during the three and six nine months ended June September 30, 2026 and 2025.

Three Months Ended June September 30, 2026

Nine Months Ended September 30, 2026

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Construction - commercial real estate

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Six Months Ended June 30, 2025

Three Months Ended June September 30, 2025

Nine Months Ended September 30, 2025

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Six Months Ended June 30, 2026

The following tables present the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty for the three and six nine months ended June September 30, 2026 and 2025.

Three Months Ended June September 30, 2026

Nine Months Ended September 30, 2026

Construction - commercial real estate

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Six Months Ended June 30, 2025

Three Months Ended June September 30, 2025

Nine Months Ended September 30, 2025

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The Corporation closely monitors the performance of modified loans to understand the effectiveness of its modification efforts. Upon the determination that all or a portion of a modified loan is uncollectible, that amount is charged against the allowance for credit losses. There were no payment defaults during the three and six nine months ended June September 30, 2026 and 2025 of loans to borrowers experiencing financial difficulties that were modified during the previous twelve months and all were current as of June September 30, 2026.

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The following table shows the allowance for credit losses activity by loan portfolio for the six nine months ended June September 30, 2026 and 2025.

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and 84 more changes in the filing

MD&A 164 changes

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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● Following the 2025 opening of a loan production office in Roanoke, the community banking segment continued its growth in Southwest Virginia with the opening of a retail branch in Roanoke; and

● The Corporation continued its expansion into the western part of Virginia with the July 2026 announcement of the hiring of a veteran lender in Lynchburg, Virginia.

Consolidated net income increased $859,000 and $2.3 $1.1 million for the second third quarter and first six months of 2026 compared to the same periods period in 2025 due primarily to higher net income at the community banking and segment, partially offset by lower net income at the mortgage banking segments, segment. Consolidated net income increased $3.4 million for the first nine months of 2026 compared to the same period in 2025 due primarily to higher net income at the community banking segment, partially offset by lower net income at the standalone Corporation, included in "Other" in the table above. and consumer finance segment. A discussion of the performance of our business segments is included under the heading "Business Segments" in the "Results of Operations" section of this discussion and analysis.

Included in net income for the second quarter and first six nine months of 2026 were the effects of the sale of an equity interest in Bearing Insurance Group, LLC (the Bearing equity interest), resulting in an after-tax gain of $6.4 million, and a strategic restructuring of a portion of the Corporation's securities portfolio restructuring (the Portfolio Restructuring), which resulted in an after-tax loss of $5.6 million. No such effects impacted the Corporation's financial results for the three months ended September 30, 2026 or the three and six nine months ended June September 30, 2025. Excluding the effects of these items, adjusted net income was $7.9 million, or $2.40 per share, for the second quarter of 2026 compared to $7.8 million, or $2.37 per share, for the second quarter of 2025 and adjusted net income was $14.7 $22.9 million, or $4.48 $7.03 per share, for the first six nine months of 2026 compared to $13.2 $20.3 million, or $4.03 $6.22 per share, for the first six nine months of 2025.

The Corporation uses non-GAAP measures of financial performance, including adjusted net income, adjusted earnings per share, annualized adjusted ROA, annualized adjusted ROE, annualized ROTCE, and annualized adjusted ROTCE, annualized adjusted ROA, net tangible income attributable to the Corporation, ROTCE, tangible book value per share, and the following fully-taxable equivalent (FTE) measures: interest and fees on loans-FTE, interest and dividends on securities-FTE, total interest income-FTE, net interest income-FTE and net interest margin-FTE, to provide meaningful information about operating performance by excluding the effects of certain items that management does not expect to have an ongoing impact on consolidated net income. Each of the non-GAAP measures listed in the prior sentence, for the three and six nine months ended June September 30, 2026, exclude excludes the effects of the sale of the Bearing equity interest and the Portfolio Restructuring. For further information regarding non-GAAP measures, including the impact of the above items on each year, refer to "Use of Certain Non-GAAP Financial Measures" and the accompanying disclosure below within this Item 2.

Key factors affecting comparison for the second third quarter and first six nine months of 2026 are as follows.

● Community banking segment loans grew $65.9 $102.8 million, or 8.3 8.6 percent annualized, compared to December 31, 2025;

● Consumer finance segment loans decreased $7.7 $12.8 million, or 3.3 3.7 percent annualized, compared to December 31, 2025;

● Deposits increased $19.6 $10.4 million, or 1.7 1.0 percent annualized, compared to December 31, 2025;

● Consolidated annualized net interest margin was 4.41 4.53 percent for the second third quarter of 2026 compared to 4.27 4.24 percent for the second third quarter of 2025 and 4.27 4.41 percent for the first second quarter of 2026;

● The consumer finance segment experienced net charge-offs at an annualized rate of 2.21 2.63 percent and 2.60 2.61 percent of average total loans for the second third quarter and first six nine months of 2026, respectively, compared to 2.19 2.68 percent and 2.42 2.51 percent for the same periods of 2025 and 2.98 2.21 percent for the first second quarter of 2026;

● Mortgage banking segment loan originations increased $20.2 $5.7 million, or 9.5 3.4 percent, to $233.7 $172.8 million and increased $86.1 $91.8 million, or 26.3 18.6 percent, to $413.3 $586.1 million for the second third quarter and first six nine months of 2026 compared to the same periods of 2025;

● During the second quarter first nine months of 2026, the community banking segment completed the sale of sold its Bearing equity interest, resulting in an after-tax a pre-tax gain of $6.4 $8.3 million. Following the sale, of the Bearing equity interest, the community banking segment executed the Portfolio Restructuring, resulting in an after-tax a pre-tax loss of $5.6 $7.1 million. The community banking segment sold $72.6 million in book value of securities with a weighted average yield book value of 1.40% $72.6 million and purchased approximately $67.8 million of securities; with a weighted average yield of 4.70%; and

● The Corporation expanded into the Lynchburg, Virginia market with the hiring of an experienced lender in the third quarter of 2026.

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Under regulatory capital standards, the Corporation's tier 1 risk-based capital and total risk-based capital ratios at June September 30, 2026 were 12.3 12.7 percent and 15.3 15.7 percent, respectively, compared to 12.2 percent and 15.2 percent, respectively, at December 31, 2025. At June September 30, 2026, the book value per share of the Corporation's common stock was $85.46 $82.66 and tangible book value per share, which is a non-GAAP financial measure, was $77.45, $74.66, compared to $80.64 and $72.60, respectively, at December 31, 2025.

Total consolidated equity increased $16.1 $7.0 million to $278.4 $269.3 million at June September 30, 2026 compared to $262.3 million at December 31, 2025 due primarily to net income, and lower partially offset by higher unrealized losses in the market value of securities available for sale, which are recognized as a component of other comprehensive income, partially offset and by dividends paid on the Corporation's common stock. The Corporation's securities available for sale are fixed income debt securities and their net 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. Unrealized losses are not expected to affect the earnings or regulatory capital of the Corporation or C&F Bank. The accumulated other comprehensive loss related to the Corporation's securities available for sale, net of deferred income taxes, decreased increased to $6.7 $23.2 million at June September 30, 2026 compared to $10.2 million at December 31, 2025 due primarily to the Portfolio Restructuring an increase in the second quarter of 2026. debt security market interest rates.

The Corporation's Board of Directors declared a quarterly cash dividend of 48 cents per share during the second third quarter of 2026, which was paid on July October 1, 2026. This dividend represents a payout ratio of 18.3 18.8 percent of earnings per share for the second third quarter of 2026. 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. 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.

The Corporation has a share repurchase program, effective January 1, 2026 through December 31, 2026, that was authorized by the Board of Directors to repurchase up to $5.0 million of the Corporation's common stock (the 2026 Repurchase Program). During the second third quarter and first six nine months of 2026, the Corporation repurchased 4,095 3 and 8,374 8,377 shares, or $312,000 less than $1,000 and $621,000, $622,000, respectively, of its common stock under the 2026 Repurchase Program.

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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 the three and six nine months ended June September 30, 2026 and 2025. Interest on tax-exempt loans and securities is presented on a taxable-equivalent basis (which converts the income on loans and investments for which no income taxes are paid to the equivalent yield as if income taxes were paid) using the federal corporate income tax rate of 21 percent that was applicable for all periods presented. Average balances of securities available for sale are included at amortized cost. Loans include loans held for sale. Loans placed on a nonaccrual status are included in the balances and are included in the computation of yields, but had no material effect for all periods presented.

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Three Months Ended June September 30,

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Securities - available for sale:

Total securities - available for sale

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Six Months Ended June 30,

Net interest margin (FTE)

Nine Months Ended September 30,

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Net interest margin (FTE)

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Three Months Ended June September 30, 2026 from 2025

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Six Nine Months Ended June September 30, 2026 from 2025

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Total interest-bearing deposits

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Net interest income, on a taxable-equivalent basis, for the second third quarter and first six nine months of 2026 increased to $29.4 $30.5 million and $57.5 $88.0 million, respectively, compared to $26.8 $27.5 million and $52.1 $79.6 million for the same periods in 2025 due primarily to higher average balances of interest-earning assets and higher net interest margin. Annualized net interest margin increased 14 29 basis points to 4.41 4.53 percent for the second third quarter of 2026 compared to the same period of 2025 and increased 13 20 basis points to 4.34 4.41 percent for the first six nine months of 2026 compared to the same period of 2025 due primarily to higher average interest rates on securities and lower average interest rates on deposits, partially offset by higher average cost of borrowings. The Federal Reserve Bank (FRB) target federal funds interest rate was at an upper limit of 4.50 percent at December 31, 2024 until the Federal Open Market Committee began decreasing it in September 2025, decreasing it to 3.75 percent by December 31, 2025, where it remained until it was increased to 4.00 percent in September

3.75 percent by December 31, 2025, where it remained during the first six months of 2026. The yield on interest-earning assets increased by 9 19 basis points and 7 12 basis points for the second third quarter and first six nine months of 2026, respectively, compared to the same periods in 2025. The cost of interest-bearing liabilities decreased by 9 14 basis points and 10 12 basis points for the second third quarter and first six nine months of 2026, respectively, compared to the same periods in 2025. Average earning assets increased $160.2 $102.1 million and $176.9 $151.7 million for the second third quarter and first six nine months of 2026, respectively, compared to the same periods in 2025. Average interest-bearing liabilities increased $130.4 $65.8 million and $143.9 $117.6 million for the second third quarter and first six nine months of 2026, respectively, compared to the same periods in 2025. Average noninterest-bearing demand deposits decreased $610,000 and increased $6.4 $11.3 million and $8.1 million for the second third quarter and first six nine months of 2026, respectively, compared to the same periods in 2025.

Average loans, which includes both loans held for investment and loans held for sale, increased $135.4 $123.0 million to $2.14 $2.16 billion for the second third quarter of 2026 and increased $143.7 $136.7 million to $2.13 $2.14 billion for the first six nine months of 2026 compared to the same periods in 2025. Average loans at the community banking segment increased $132.2 $133.0 million, or 8.8 8.6 percent, for the second third quarter of 2026 and increased $133.7 $133.5 million, or 9.0 8.9 percent, for the first six nine months of 2026 compared to the same periods in 2025 due primarily to growth in the commercial real estate and land acquisition and development segments of the loan portfolio, partially offset by a decrease in construction loans. Average loans at the consumer finance segment decreased $4.7 $10.0 million, or 1.0 2.2 percent, for the second third quarter of 2026 and decreased $2.9 $5.3 million, or less than one 1.1 percent, for the first six nine months of 2026 compared to the same periods in 2025 due primarily to a decrease in marine and recreational vehicle (RV) loans as the third party administrator of that 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 during the third quarter of 2025. The marine and RV portfolio is expected to run off over time, subject to normal repayment activity and credit performance. Average loans at the mortgage banking segment, which consist of loans held for sale, increased $7.9 million, decreased $70,000, or 17.3 less than one percent, for the second third quarter of 2026 and increased $12.8 $8.5 million, or 38.3 24.3 percent, for the first six nine months of 2026 compared to the same periods in 2025.

Average loan yields decreased 6 2 basis points to 6.68 6.74 percent for the second third quarter of 2026 and decreased 5 3 basis points to 6.69 6.71 percent for the first six nine months of 2026 compared to the same periods in 2025 due primarily to a mix shift in the portfolio with growth in loans at the community banking segment, which has lower yields than loans at the consumer finance segment, partially offset by an increase in loan yields at the community banking segment. The community banking segment average loan yield increased 2 10 basis points to 5.61 5.70 percent for the second third quarter of 2026 and increased 4 6 basis points to 5.59 5.63 percent for the first six nine months of 2026 compared to the same periods in 2025 due primarily to an increase in market interest rates and renewals of fixed rate loans originated during periods of lower interest rates. The consumer finance segment average loan yield increased 6 decreased 2 basis points to 10.55 10.59 percent for the second third quarter of 2026 compared to the same period of 2025 due primarily to lower yields on automobile loans, partially offset by a mix shift in the loan portfolio with the termination of the marine and RV loans program. The consumer finance segment average loan yield increased 8 4 basis points to 10.61 10.60 percent for the first six nine months of 2026 compared to the same periods period in 2025 due primarily to a mix shift in the loan portfolio with the termination of the marine and RV loans program and the portfolio composition in general shifting towards originations within the past three years, when interest rates were have generally been higher, as balances on loans originated prior to that in periods of lower interest rates decline. The mortgage banking segment average loan yield decreased 29 10 basis points to 6.09 6.50 percent for the second third quarter of 2026 and decreased 53 42 basis points to 5.91 6.08 percent for the first six nine months of 2026 compared to the same periods in 2025 due to fluctuations in mortgage market interest rates.

Average securities available for sale increased $11.5 $15.7 million to $473.8 $476.6 million for the second third quarter of 2026 and increased $14.8 $15.1 million to $475.2 $475.7 million for the first six nine months of 2026 compared to the same periods in 2025. The average yield on the securities portfolio, on a taxable-equivalent basis, increased 74 97 basis points to 3.79 4.13 percent for the second third quarter of 2026 and increased 61 73 basis points to 3.60 3.78 percent for the first six nine months of 2026 compared to the same periods in 2025 due primarily to the Portfolio Restructuring during the second quarter of 2026. In the Portfolio Restructuring, the community banking segment sold $72.6 million in book value of securities with a weighted average yield of 1.40% and representing approximately 14.7% of the entire securities portfolio and purchased approximately $67.8 million of securities with a weighted average yield of 4.70%.

Average interest-bearing deposits in other banks, consisting primarily of excess cash reserves maintained at the FRB, increased $13.3 decreased $36.5 million to $61.5 $38.1 million for the second third quarter of 2026 and increased $18.4 million decreased $97,000 to $70.4 $59.5 million for the first six nine months of 2026 compared to the same periods in 2025. The average yield on interest-bearing deposits in other banks decreased 36 100 basis points for the second third quarter of 2026 and decreased 34 53 basis points for the first six nine months of 2026 compared to the same periods of 2025 due primarily to the decreases in the federal funds interest rate beginning in September 2025.

Average savings and money market and interest-bearing demand deposits combined increased $59.8 $30.0 million to $895.1 $887.1 million for the second third quarter of 2026 and increased $69.9 $56.4 million to $898.4 $894.6 million for the first six nine months of 2026 compared to the same periods in 2025. Average noninterest-bearing demand deposits decreased $610,000 increased $11.3 million to $567.8 $566.4 million for the second third quarter of 2026 and increased $6.4 $8.1 million to $563.3 $564.4 million for the first six nine months of 2026 compared to the same periods in 2025. Average time deposits increased $90.3 $57.8 million to $920.7 $923.3 million for the second third quarter of 2026 and increased $88.6 $78.2 million to $914.8 $917.6 million for the first six nine months of 2026 compared to the same periods in 2025. The average cost of interest-bearing deposits decreased 14 13 basis points to 2.16 percent for the second third quarter of 2026 and decreased 17 15 basis points to 2.18 percent for the first six nine months of 2026 compared to the same periods in 2025 due primarily to decreases in interest rates paid on time deposits. A portion of the increases in average deposits was due to the wind-down of the repurchase agreement program with certain commercial deposit customers during the third quarter of 2025. The average balance of these repurchase agreements was $23.9 $11.9 million at June 30, and $21.3 million for the third quarter and first nine months of 2025, respectively.

Average borrowings decreased $19.6 $22.0 million to $103.5 $103.3 million for the second third quarter of 2026 compared to the same period in 2025 due primarily to the wind-down of the repurchase agreement program and a decrease in average balances of FHLB advances. Average borrowings decreased $14.6 $17.1 million to $107.9 $106.3 million for the first six nine months of 2026 compared to the same periods period in 2025 due primarily to the wind-down of the repurchase agreement program and decreases a decrease in average balances of FHLB advances, partially offset by higher average balances of subordinated notes. The average cost of borrowings increased 139 56 basis points to 5.77 5.86 percent for the second third quarter of 2026 and increased 154 122 basis points to 5.72 5.77 percent for the first six nine months of 2026 compared to the same periods in 2025 due primarily to higher rates paid on subordinated notes and a shift in the mix of borrowings and higher rates paid on subordinated notes. The Corporation issued new subordinated notes with an aggregate principal amount of $40.0 million in the second quarter of 2025, which initially bear interest at a fixed rate of 7.50%, and concurrently repurchased its previously issued subordinated notes with aggregate principal amount of $20.0 million, which were to transition from a fixed rate of 4.875% to a floating rate at the then current three-month SOFR plus 475.5 basis points during the third quarter of 2025.

The Corporation gives no assurance as to the timing or extent of changes in market interest rates or the impact of those changes or any other factor on the Corporation's ability to compete for loans and deposits or on its funding costs, liquidity, and net interest margin. The Corporation believes that if market interest rates were to decline, continue to rise, net interest margin could be adversely positively affected in the short term as the Corporation generally expects its assets typically to reprice downward upward more quickly than its deposits and borrowings, The majority of the Corporation's time deposits have repriced within the past year and significant further decreases are not expected unless there are additional decreases in market interest rates or shifts in each case as of the mix date of deposits. this report. 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 including those purchased would contribute to increased yields on interest-earning assets. While recent increases in market interest rates and increased competition for deposits may result in higher funding costs, the Portfolio Restructuring. Corporation believes the impact on cost of interest-bearing deposits would occur over time as the majority of the Corporation's time deposits have repriced within the past year. Additionally, if market interest rates were to rise, remain elevated or increase further, other aspects of the Corporation's business, such as mortgage loan demand, may also be adversely affected. If market interest rates were to decline, net interest margin could be positively adversely affected in the short term as the Corporation generally expects its assets to reprice upward downward more quickly than its deposits and borrowings, although mortgage loan demand may be positively affected. The interest rate environment has grown increasingly uncertain during the first six nine months of 2026. and The ultimate effect impact on the Corporation's net interest margin of changes in market interest rates and other market factors, including monetary policy actions taken by the Federal Reserve, on the Corporation's net interest margin will also depend on other factors, some of which may be outside of the Corporation's control, including the Corporation's ability to grow loans at the community banking and consumer finance segments, the Corporation's ability to compete for deposits, and the extent Corporation's use of borrowings to fund its reliance operations, economic conditions nationally and within the Corporations' markets, other factors discussed in this report, including the risks discussed under "Cautionary Statement About Forward-Looking Statements," and the risks discussed in more detail in Item 1A. "Risk Factors" of Part I of the Corporation's Annual Report on borrowings. Form 10-K for the year ended December 31, 2025 and other reports filed with the SEC.

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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Total noninterest income increased $2.9 million, or 16.7 percent, for the first six months of 2026 compared to the same period in 2025 due primarily to higher investment income from other equity interests related to the sale of the Bearing equity interest and higher volume of mortgage loan production at the mortgage banking segment which resulted in higher gains on sales of loans, higher mortgage banking fee income and higher mortgage lender services income, partially offset by net losses on the Portfolio Restructuring.

Total noninterest income decreased $808,000, or 9.1 percent, for the third quarter of 2026 compared to the same period in 2025 due primarily to fluctuations in unrealized gains and losses on investments held in the rabbi trust and lower gains on sales of loans.

Total noninterest income increased $1.9 $2.1 million, or 19.6 8.0 percent, for the second quarter first nine months of 2026 compared to the same period in 2025 due primarily to higher investment income from other equity interests related to the sale of the Bearing equity interest, fluctuations in unrealized gains and losses on investments held in the rabbi trust and higher volume of mortgage loan production at the mortgage banking segment which resulted in higher mortgage banking fee lender services income and higher mortgage lender services banking fee income, partially offset by net losses on the Portfolio Restructuring and fluctuations in unrealized gains and losses on investments held in the rabbi trust.

The Corporation uses a rabbi trust to fund liabilities under its nonqualified deferred compensation plan. Unrealized gains and losses on investments held in the Corporation's rabbi trust are offset by changes in deferred compensation liabilities, which are recorded in salaries and employee benefits expense.

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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The Corporation's consolidated effective income tax rate was 20.6 percent and 19.7 percent for the second quarter and first six months of 2026, respectively, compared to 19.3 percent and 18.5 percent for the same periods in 2025 due primarily to the tax impact of the sale of the Bearing equity interest and lower income tax windfall related to the amount deductible upon vesting of restricted stock awards.

Total noninterest expenses increased $2.7 $1.0 million, or 11.0 4.1 percent, in the second third quarter of 2026 and increased $4.0 $5.0 million, or 8.3 6.9 percent, for the first six nine months of 2026 compared to the same periods in 2025 due primarily to higher salaries and employee benefits due to the addition of a seasoned lending team teams with the expansion into Southwest the Roanoke and Lynchburg, Virginia markets in the third quarter quarters of 2025 and 2026, respectively, annual compensation adjustments, increased employee incentive accruals associated with improved financial performance and higher commissions from increased volume of mortgage loan production, as well as higher data processing and occupancy expense, and loan processing and collection expenses. partially offset by fluctuations in deferred compensation liabilities.

Changes in deferred compensation plan liabilities are offset by unrealized gains and losses on investments held in the Corporation's rabbi trust, and which are recorded in noninterest income.

The Corporation's consolidated effective income tax rate was 18.9 percent for the third quarter of 2026 compared to 19.4 percent for the same period in 2025 due primarily to a higher share of income at the community banking segment, which is not subject to state income taxes. The Corporation's consolidated effective income tax rate was 19.4 percent for the first nine months of 2026 compared to 18.8 percent for the same period in 2025 due primarily to the tax impact of the sale of the Bearing equity interest in the second quarter of 2026.

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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The community banking segment reported net income of $8.2 $8.9 million and $15.3 $24.2 million for the second third quarter and first six nine months of 2026, respectively, compared to $7.1 $7.4 million and $12.6 $19.9 million for the same periods in 2025 due primarily to:

● higher interest income resulting from higher average balances of loans securities and cash reserves securities and higher average interest rates on loans and securities, due primarily to an increase in market interest rates and the Portfolio Restructuring; and

● a pre-tax gain of $8.3 million on the sale of the Bearing equity interest in the second quarter first nine months of 2026, reported in investment income from other equity interests;

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● higher salaries and employee benefits due primarily to the addition of a seasoned lending team teams with the expansion into Southwest the Roanoke and Lynchburg, Virginia markets in the third quarter quarters of 2025 and 2026, respectively, annual compensation adjustments, and increased employee incentive accruals associated with improved financial performance;

● the Portfolio Restructuring, which resulted in a pre-tax loss of $7.1 million on the Portfolio Restructuring in for the second quarter first nine months of 2026, reported in net loss on sales of available for sale securities; and

● higher provision for credit losses for the first nine months of 2026 as compared to the same period of 2025 due primarily to the reversal of a specific reserve in the second quarter of 2025 upon the resolution of a nonperforming commercial real estate loan; and

● higher data processing expenses associated with investments in information technology infrastructure projects.

Adjusted net income for the community banking segment, which excludes the effects of the sale of the Bearing equity interest and the Portfolio Restructuring, was $7.4 million and $14.5 $23.5 million for the second quarter and first six nine months of 2026, respectively, compared to $7.1 million and $12.6 $19.9 million for the same periods period in 2025. Adjusted net income for the community banking segment increased $314,000 and $2.0 $3.5 million for the second quarter and first six nine months of 2026, respectively, compared to the same periods period in 2025 due primarily to the other items discussed above.

Net interest income for the community banking segment increased by $2.7 $3.0 million to $23.0 $24.2 million for the second third quarter of 2026 and increased $5.5 $8.5 million to $44.6 $68.8 million for the first six nine months of 2026 compared to the same periods in 2025 due primarily to an increase in net interest margin and higher average balances of earning assets. Average interest-earning asset yields at the community banking segment were higher for the second third quarter and first six nine months of 2026 compared to the same periods in 2025 due primarily to higher average interest rates on securities available for sale and loans and a mix shift in interest-earning assets to loans, which have higher yields than securities available for sale or interest-bearing deposits in other banks. In the Portfolio Restructuring, the community banking segment sold $72.6 million in book value of securities with a weighted average yield of 1.40% and representing approximately 14.7% of the entire securities portfolio, and purchased approximately $67.8 million of securities with a weighted average yield of 4.70%. Average loan yields increased for the third quarter and first nine months of 2026 at the community banking segment due primarily to higher average market interest rates. The average cost of interest-bearing liabilities was lower for the second third quarter and first six nine months of 2026 compared to the same periods in 2025 due primarily to decreases a decrease in interest rates paid on time deposits. Interest income allocated to the community banking segment includes interest income on loans to the consumer finance and mortgage banking segments. Intercompany loan balances, interest income, and interest expense related to these transactions are eliminated to reach consolidated totals.

The community banking segment recorded no provision for credit losses of $150,000 and $450,000 for in the second third quarter and first six months of 2026 compared to a net reversals reversal of $100,000 in the third quarter of 2025. For the first nine months of 2026, the community banking segment recorded $450,000 of provision for credit losses compared to a net reversal of $300,000 and $200,000 for the same periods in first nine months of 2025. Management believes that the level of the allowance for credit losses is adequate to reflect the net amount expected to be collected.

Noninterest income increased for the second third quarter and first six nine months of 2026 compared to the same periods in 2025 due primarily to higher wealth management services income and for the first nine months of 2026, higher investment income from other equity interests from the sale of the Bearing equity interest partially offset by net losses on sales of available for sale securities from the Portfolio Restructuring. Noninterest expenses increased for the second third quarter and first six nine months of 2026 compared to the same periods in 2025 due primarily to higher salaries and employee benefits, occupancy expense and data processing expenses.

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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The mortgage banking segment reported net income of $266,000 for the third quarter of 2026 compared to $641,000 for the same period in 2025 due primarily to:

● lower gains on sales of loans due primarily to lower margins;

partially offset by:

● higher mortgage lender services fee income.

The mortgage banking segment reported net income of $1.1 million and $2.0 $2.2 million for the second quarter and first six nine months of 2026 respectively, compared to $985,000 and $1.4 $2.1 million for the same periods in period of 2025 due primarily to:

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● higher variable expenses tied to mortgage loan origination volume such as commissions and bonuses, reported in salaries and employee benefits, and higher loan processing expenses, reported in loan processing and collection expenses.

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Six Months Ended June 30,

Three Months Ended June September 30,

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and 84 more changes in the filing

Market risk 3 changes

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The simulation analysis results, based on a measurement date balance sheet as of June September 30, 2026, for hypothetical changes in net interest income over the next twelve months are presented in the following table.

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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. As of June September 30, 2026, the Corporation's net interest income sensitivity to both an increase and decrease in market interest rates is slightly generally less sensitive as compared to its position as of December 31, 2025 driven by an increase in asset duration during the first six nine months of 2026 due primarily to the Portfolio Restructuring and repricing of loans.

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These results as of June September 30, 2026 indicate that the EVE would decrease assuming an immediate downward shift in market interest rates of 200 BP to 300 BP or an immediate upward shift in market interest rates of 100 BP to 300 BP and would increase assuming an immediate downward shift in market interest rates of 100 BP. As of June September 30, 2026, the Corporation's EVE is slightly less sensitive to a decrease in market interest rates and slightly more sensitive to an increase in market interest rates as compared to its position as of December 31, 2025 due primarily to changes in the duration of both assets and liabilities as a result of shifts in the mix of earning assets and in the mix of deposits and borrowings.

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Controls and procedures 2 changes

The Corporation's management, including the Corporation's Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Corporation's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Corporation's disclosure controls and procedures were effective as of June September 30, 2026 to ensure that information required to be disclosed by the Corporation in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Corporation's management, including the Corporation's Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that the Corporation's disclosure controls and procedures will detect or uncover every situation involving the failure of persons within the Corporation or its subsidiary to disclose material information required to be set forth in the Corporation's periodic reports.

There were no changes in the Corporation's internal control over financial reporting during the three months ended June September 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.

Legal proceedings 1 change

In the normal course of business, the Corporation is subject to various legal and administrative proceedings and claims. Legal and administrative proceedings are subject to inherent uncertainties and unfavorable rulings could occur, and the timing and outcome of any legal or administrative proceeding cannot be predicted with certainty. As of June September 30, 2026, the Corporation is not involved in any material pending or threatened legal proceedings other than proceedings occurring in the ordinary course of business.

Unregistered sales of stock 9 changes

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April 1, 2026 - April 30, 2026

May 1, 2026 - May 31, 2026

June 1, 2026 - June 30, 2026

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). 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 Exchange Act and shares repurchased will be returned to the status of authorized and unissued shares of common stock. The timing, number and purchase price of shares repurchased under the 2026 Repurchase Program, 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 additional shares under the 2026 Repurchase Program. There were 4,095 3 shares repurchased under the 2026 Repurchase Program during the second third quarter of 2026 for an aggregate cost of $312,000 under the 2026 Repurchase Program. less than $1,000.

The following table summarizes repurchases of the Corporation's common stock that occurred during the three months ended June September 30, 2026.

July 1, 2026 - July 31, 2026

August 1, 2026 - August 31, 2026

September 1, 2026 - September 30, 2026

1 During the three months ended June September 30, 2026, 731 171 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.

Other information 1 change

During the three months ended June September 30, 2026, n o n e of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a Rule 10b5-1 trading arrangement or non -Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K). of the Securities Act of 1933).

Exhibits 4 changes

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Transition Agreement by and between C&F Finance Company and S. Dustin Crone, effective as of June 30, 2026 (incorporated by reference to Exhibit 10.1 to Form 8-K filed June 18, 2026)

Nonqualified Supplemental Deferred Compensation Plan Adoption Agreement (As amended and restated effective January 1, 2026) for C&F Financial Corporation Non-Qualified Deferred Compensation Plan for Directors and Executives (As amended and restated effective January 1, 2026) (incorporated by reference to Exhibit 10.2 to Form 8-K filed June 18, 2026)

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The following financial statements from the Corporation's Quarterly Report on Form 10-Q for the quarter ended June September 30, 2026, formatted in Inline XBRL, filed herewith: (i) the Consolidated Balance Sheets (unaudited), (ii) the Consolidated Statements of Income (unaudited), (iii) the Consolidated Statements of Comprehensive Income (unaudited), (iv) the Consolidated Statements of Equity (unaudited), (v) the Consolidated Statements of Cash Flows (unaudited) and (vi) the Notes to Consolidated Financial Statements (unaudited)

The cover page from the Corporation's Quarterly Report on Form 10-Q for the quarter ended June September 30, 2026, formatted in Inline XBRL (included within Exhibit 101)

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