C & F FINANCIAL CORP Debt Disclosure

NOTE 11: Borrowings

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The following table presents selected information on short-term borrowings:

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Long-term borrowings at December 31, 2025 were comprised of $15.00 million of convertible advances from the FHLB,  $5.00 million of fixed rate hybrid advances from the FHLB and $40.00 million of the Corporation’s subordinated notes due in 2035 (the 2035 Subordinated Notes).  

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The FHLB convertible advances have fixed rates of interest unless the FHLB exercises its option to convert the interest on these advances from fixed rate to variable rate.  The fixed rate hybrid FHLB advances provide fixed-rate funding until the stated maturity date. C&F Bank may add interest rate caps or floors at a future date, at which time the cost of the caps or floors will be added to the advance note. The following table presents selected information for the FHLB advances at December 31, 2025:

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On June 6, 2025, the Corporation completed the issuance of $40.0 million in aggregate principal amount of subordinated notes due 2035 (the Notes) in a private placement transaction. The Notes will initially bear interest at a fixed rate of 7.50% to but excluding June 30, 2030 and then at the then current three-month SOFR plus 388.5 basis points through maturity on June 30, 2035. Beginning on June 30, 2030 through maturity, the Notes may be redeemed at the Corporation’s option, on any scheduled interest payment date. Concurrently with the issuance, the Corporation repurchased its $20.0 million in aggregate principal amount of 4.875% fixed-to-floating rate subordinated notes due 2030 (the 2030 Notes). The 2030 Notes were repurchased at a price of 100% of the outstanding principal amount, plus accrued but unpaid interest, to but excluding the repurchase date. The 2030 Notes 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 subordinated notes of the Corporation rank junior to all existing and future senior indebtedness of the Corporation and are structurally subordinated to all existing and future debt and liabilities of the Bank and its subsidiaries.  These borrowings are presented in the Consolidated Balance Sheets net of issuance costs and, as applicable, acquisition premium. 

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The contractual maturities of long-term borrowings at December 31, 2025 are as follows:

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The Corporation’s available sources of credit for future borrowings totaled approximately $674.8 million at December 31, 2025, which consisted of $236.7 million available from the FHLB, $363.1 million available from the FRB, $75.00 million under unsecured federal funds agreements with third party financial institutions.  Credit available from the FHLB is secured by a blanket floating lien on all qualifying closed-end and revolving, open-end loans of C&F Bank secured by 1-4 family residential properties.  Credit available from the FRB is secured by liens on specific loans of C&F Bank. Additional loans and securities are available that can be pledged as collateral for future borrowings from the FRB or the FHLB above the current lendable collateral value.

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C&F Financial Statutory Trust I (Trust I), C&F Financial Statutory Trust II (Trust II) and Central Virginia Bankshares Statutory Trust I (CVBK Trust I) are wholly-owned non-operating subsidiaries of the Corporation, formed for the purpose of issuing trust preferred capital securities. Collectively, these trusts have issued $25.00 million of trust preferred capital securities to institutional investors through private placements and $775,000 in common equity that is held by the Corporation.  Trust preferred capital securities of $5.00 million issued by CVBK Trust I, $10.00 million issued by Trust I, and $10.00 million issued by Trust II mature in 2033, 2035 and 2037, respectively, and are redeemable at the Corporation’s option.  Each of the trusts is required to make quarterly distributions to the holders of the securities at a rate based on the three-month SOFR plus a spread of between 1.57 percent and 3.15 percent.  During 2025, 2024 and 2023, the Corporation used interest rate swaps in designated cash flow hedges of interest payments on the trust preferred capital securities to mitigate the effects of changes in interest rates.  The interest rate swaps manage the Corporation’s exposure to variability in cash flows for periods that end between June 2026 and June 2029. At December 31, 2025, the effect of the interest rate swaps was a fixed rate of interest on the securities issued by CVBK Trust I, Trust I and Trust II of 4.64 percent, 5.80 percent and 5.10 percent, respectively.  The principal assets of CVBK Trust I, Trust I and Trust II are trust preferred capital notes of the Corporation of $5.16 million, $10.31 million and $10.31 million, respectively, which have like maturities and like interest rates to the trust preferred capital securities. The interest payments by the Corporation on the notes will be used by the trusts to pay the quarterly distributions on the trust preferred capital securities.  The trusts are unconsolidated subsidiaries of the Corporation, and the Corporation’s trust preferred capital notes are presented as liabilities in the Consolidated Balance Sheets net of acquisition discount, as applicable.

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Subject to certain exceptions and limitations, the Corporation may elect from time to time to defer interest payments on the junior subordinated debt securities, which would result in a deferral of distribution payments on the related capital securities.