<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year end December 31, 1999
-----------------
OR
[ ] TRANSITION REPORT PUSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ____________________ to ___________________
Commission file number 000-23423
---------
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Virginia Bankers Association Defined Contribution Plan for Citizens and
Farmers Bank
802 Main Street
West Point, Virginia 23181
Virginia Bankers Association Defined Contribution Plan for C&F Mortgage
Corporation
300 Arboretum Place, Suite 245
Richmond, Virginia 23236
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
C & F Financial Corporation
802 Main Street
West Point, Virginia 23181
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Virginia Bankers Association Defined Contribution
Plan for Citizens and Farmers Bank
Virginia Bankers Association Defined Contribution
Plan for C & F Mortgage Corporation
-----------------------------------
(Name of Plans)
Date June 26, 2000 /S/ Thomas F. Cherry
------------- -----------------------------------
Thomas F. Cherry
Chief Financial Officer
<PAGE>
VIRGINIA BANKERS ASSOCIATION DEFINED
CONTRIBUTION PLAN FOR
CITIZENS AND FARMERS BANK
West Point, Virginia
FINANCIAL REPORT
DECEMBER 31, 1999
<PAGE>
C O N T E N T S
Page
INDEPENDENT AUDITOR'S REPORT
ON THE FINANCIAL STATEMENTS 1
FINANCIAL STATEMENTS
Statements of net assets available for benefits 2
Statements of changes in net assets available for
benefits 3
Notes to financial statements 4-9
SUPPLEMENTAL SCHEDULE
Schedule of assets held for investment purposes 10
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Virginia Bankers Association Defined Contribution
Plan for Citizens and Farmers Bank
West Point, Virginia
We have audited the accompanying statements of net assets available for
benefits of Virginia Bankers Association Defined Contribution Plan for Citizens
and Farmers Bank as of December 31, 1999 and 1998, and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan as
of December 31, 1999 and 1998, and the changes in net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule as
listed in the accompanying table of contents is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Yount, Hyde & Barbour, P.C.
Winchester, Virginia
May 2, 2000
1
<PAGE>
VIRGINIA BANKERS ASSOCIATION DEFINED CONTRIBUTION PLAN
FOR CITIZENS AND FARMERS BANK
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
1999 1998
------------ -----------
Assets
Investments, at fair value $ 4,098,158 $3,131,371
----------- ----------
Receivables:
Employer contribution $ 167,058 $ 154,683
Participant contributions 7,220 6,210
Due from brokers 241,466 - -
Other 745 6
----------- ----------
Total receivables $ 416,489 $ 160,899
----------- ----------
Cash $ - - $ 55
----------- ----------
Total assets $ 4,514,647 $3,292,325
----------- ----------
Liabilities
Settled purchases in excess of cash $ 240,569 $ - -
Other liabilities 2,125 12,396
----------- ----------
Total liabilities $ 242,694 $ 12,396
----------- ----------
Net assets available for benefits $ 4,271,953 $3,279,929
=========== ==========
See Notes to Financial Statements.
2
<PAGE>
VIRGINIA BANKERS ASSOCIATION DEFINED CONTRIBUTION PLAN
FOR CITIZENS AND FARMERS BANK
Statements of Changes in Net Assets Available
for Benefits
For the Years Ended December 31, 1999 and 1998
1999 1998
---------- ---------
Additions to net assets
attributable to:
Investment income:
Net appreciation in fair
value of investments $ 715,665 $ 297,754
Interest and dividends 5,759 4,868
---------- ---------
$ 721,424 $ 302,622
---------- ---------
Contributions:
Employer $ 296,151 $ 269,723
Participant 203,800 163,541
Rollover contributions 18,733 18,700
Other - - 1,771
---------- ---------
$ 518,684 $ 453,735
---------- ---------
Total additions $1,240,108 $ 756,357
---------- ---------
Deductions from net assets
attributable to,
benefits paid to participants $ 248,084 $ 245,824
---------- ---------
Net increase $ 992,024 $ 510,533
Net assets available for benefits:
Beginning of period 3,279,929 2,769,396
---------- ---------
End of period $4,271,953 $3,279,929
========== ==========
See Notes to Financial Statements.
3
<PAGE>
VIRGINIA BANKERS ASSOCIATION DEFINED CONTRIBUTION PLAN
FOR CITIZENS AND FARMERS BANK
Notes to Financial Statements
Note 1. Description of the Plan
The following description of the Virginia Bankers Association Defined
Contribution Plan for Citizens and Farmers Bank (Plan) provides only
general information. Participants should refer to the Plan agreement
for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan maintained by Citizens and
Farmers Bank pursuant to the provisions of Section 401(k) of the
Internal Revenue Code (Code) established for the benefit of
substantially all full time employees electing to participate in
the Plan. Employees are eligible to participate in the Plan on the
first day of the calendar quarter after completing three months of
service and must be eighteen years old or older. The Plan is
subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Effective January 1, 1999, the Plan was restated to include the
investment option of C&F Financial Corporation Stock (Employer
Stock) registered under the Securities Act of 1933.
Contributions
Each participant may elect to defer from 1% to 20% of their pretax
annual compensation, as defined in the Plan. The Bank makes a
matching contribution to the Plan on behalf of each participant who
makes a pretax contribution. The amount the Bank contributes is
100% of the first 5% of compensation. The Bank may also make a
discretionary profit sharing contribution, determined annually by
the Board of Directors. This contribution is allocated in
proportion of a participant's covered compensation to covered
compensation of all participants. Discretionary contributions
declared or made by the Bank were $158,381 and $150,056 during the
plan years ended December 31, 1999 and 1998, respectively.
Participants entering the Plan may roll over contributions from
other plans. Contributions are subject to certain limitations as
established by the Code.
Participants' Accounts
Each participant's account is credited with the participant's
contribution and allocations of (a) the Bank's contributions (b)
Plan earnings and (c) forfeitures. Allocations are based on
4
<PAGE>
participant earnings or account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
5
<PAGE>
Notes to Financial Statements
Vesting
The Plan's vesting provision provides that participants are
immediately vested in their elective contributions and earnings
thereon. Vesting in the Bank's contributions occurs as follows:
Number of Years of
Vesting Service Vested Interest
-------------------- ---------------
Less than 3 years 0%
3 years but less than 4 years 20%
4 years but less than 5 years 40%
5 years but less than 6 years 60%
6 years but less than 7 years 80%
7 years or more 100%
Investment Options
All assets in the Plan are directed by individual participants.
Participants are given the option to direct account balances and
all contributions made into separate investment funds established
in the Trust Fund. The following provides a description of each
available investment option as stated in the summary plan
description:
Current Income Fund - This investment fund is invested
primarily in short-term and intermediate-term bond funds that
the Investment Manager considers appropriate from time to time.
This investment fund will generally earn higher income than
money market instruments or certificates of deposit. While the
investment division is designed to emphasize safety and
stability, its value may in fact decrease. This option was
eliminated as of December 31, 1999. The funds previously in
the Current Income investment option are held in the SouthTrust
U.S. Treasury Money Market Fund and will be allocated into
other investment options according to participant direction.
Capital Preservation Fund - This investment fund is invested
primarily in corporate and government funds that the Investment
Manager considers appropriate from time to time. Generally,
the funds will be selected for their income and relative
stability in the price of fund shares. This investment
division will also contain a small stock component which
provides some potential for growth. While this investment
division is designed to safeguard the principal investment, its
value generally will fluctuate up and down based on market
conditions.
6
<PAGE>
Notes to Financial Statements
Moderate Growth Fund - This investment fund is invested in bond
and stock funds that the Investment Manager considers
appropriate from time to time. Generally, this investment fund
will maintain a strong commitment to bond funds to provide
current income and help stabilize the portfolio for inordinate
swings in value. The value of this investment fund generally
will fluctuate up and down based on market conditions.
Wealth Building Fund - This investment fund is invested in a
diversified mix of stock and bond funds that the Investment
Manager considers appropriate from time to time. Generally,
this investment fund is designed to build assets and protect
against inflation over the long run. The value of this
investment fund generally will fluctuate up and down based on
market conditions.
Aggressive Appreciation Fund - This investment fund is invested
exclusively in stock funds that the Investment Manager
considers appropriate from time to time. This investment fund
is designed to provide the highest growth potential. Stock
funds offer the greatest opportunity for significant gains and
correspondingly, the highest degree of risk of loss in value.
Employer Stock Fund - This investment fund is invested
exclusively in common stock of C&F Financial Corporation
("Employer Stock") and such temporary cash investments as the
named Fiduciary considers appropriate from time to time.
Generally, this investment fund will be invested 50% to 100% in
Employer Stock. Investments in C&F Financial Corporation Stock
became available beginning January 1, 1999.
A participant may choose to invest up to 25% (in increments of 5%)
of their account balance and future contributions in the Employer
Stock Fund, the remaining balance and future contributions may be
invested in one other investment fund. Participants may change
their investment options quarterly and any investment direction
will apply to the entire account balance and to any future
contributions made.
Participants Notes Receivable
Participants may borrow from their fund accounts a minimum of
$1,000 up to a maximum equal to the lesser of $50,000 or 50% of
their vested account balance. Loan transactions are treated as a
transfer to (from) the investment fund from (to) the Participants
Notes Fund. Loan terms are limited to 5 years or up to 30 years
for the purchase of a primary residence. The loans are fully
secured by the balance in the participant's account and bear
interest at 1/4 of 1% over the Corporation's prime rate and will
remain unchanged for the life of the loan. Principal and interest
is paid ratably through monthly payroll deductions.
7
<PAGE>
Notes to Financial Statements
Payment of Benefits
Upon retirement or termination of service a participant may elect
to receive either a lump sum amount equal to the value of the
participant's vested interest in his or her account, periodic
installments for a period of up to 10 years or a combination of
both. A written election must be made with the administrator at
least 30 days before the benefit payment date. Participants whose
vested account balance has never exceeded $5,000 must be paid out
in the form of a lump sum distribution.
Forfeited Accounts
At December 31, 1999 and 1998, all forfeited nonvested accounts
balances were reallocated among remaining Plan participants.
Note 2. Summary of Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ
from those estimates.
Investment Valuation and Income Recognition
The Plan's investments in collective trusts are stated at contract
value. Contract values as stated by Virginia Bankers Association
Benefits Corporation (VBA), Plan Trustee, are determined by closing
quoted market prices of the underlying securities and therefore
approximate fair value at the end of the Plan year. Common stock
is stated at the fair value determined by quoted market prices.
Participant notes receivable are valued at cost which approximates
fair value.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
In accordance with the policy of stating investments at current
value, net realized and unrealized appreciation (depreciation) for
the year is reflected in the statements of changes in net assets
available for plan benefits.
8
<PAGE>
Notes to Financial Statements
Benefit Payments
Benefit payments are recorded when paid.
Note 3. Plan Termination
Although it has not expressed any intent to do so, the Bank has the
right under the Plan to terminate the Plan subject to the provisions of
ERISA. In the event of plan termination, participants become 100
percent vested in the portion of his or her account not previously
vested.
Note 4. Investments
The Plan's investment assets are held by the custodian, SouthTrust Asset
Management Company of Georgia, N.A. The following table presents the
fair value of investments for the years ended December 31, 1999 and 1998
that represent 5 percent or more of the Plan's net assets.
<TABLE>
<CAPTION>
December 31,
----------------------
1999 1998
---------- ----------
<S> <C> <C>
VBA Current Income Fund $ - - $ 183,540
VBA Capital Preservation
Fund 232,812 116,322
VBA Moderate Growth Fund 420,295 274,476
VBA Wealth Building Fund 1,983,723 1,464,659
VBA Aggressive Appreciation
Fund 1,108,289 1,054,471
SouthTrust U.S. Treasury
Money Market Fund 254,015 11,821
</TABLE>
During the Plan years ending December 31, 1999 and 1998, the Plan's
investments (including gains and losses on investments bought and sold,
as well as held during the year) appreciated (depreciated) in value by
$715,665 and $297,754 as follows:
<TABLE>
<CAPTION>
December 31,
-------------------
1999 1998
--------- --------
<S> <C> <C>
Common Collective Trust Funds $728,150 $297,754
Employer Common Stock (12,485) - -
-------- --------
$715,665 $297,754
======== ========
</TABLE>
9
<PAGE>
Notes to Financial Statements
Note 5. Tax Status
The Internal Revenue Service has determined and informed the
trustee/administrator by a letter dated December 23, 1997, that the
master Plan and related trust are designed in accordance with applicable
sections of the Internal Revenue Code (IRC). The Plan administrator and
Plan sponsor believe that the Plan is designed and currently being
operated in compliance with the applicable requirements of the IRC.
Note 6. Related-Party Transactions
The majority of the Plan's assets are invested in common collective
Trust Funds which are managed by the Virginia Bankers Association
Benefits Corporation, Plan administrator and trustee of the Plan.
Therefore, transactions in these funds qualify as a party-in-interest.
Fair market value of these funds are based on closing market quotes of
the underlying securities and fees. Charges for services by the party-
in-interest are based on customary rates for such services.
The Plan allows funds to be invested in the common stock of C & F
Financial Corporation, the parent company of Citizens and Farmers Bank,
the Plan Sponsor. Therefore, C & F Financial Corporation is a party-in-
interest. Employer securities are allowed by ERISA and the Department
of Labor and the fair value of the common stock is based on quotes from
an active market.
Note 7. Administrative Expenses
Certain administrative expenses are absorbed by Citizens and Farmers
Bank, the Plan Sponsor.
Note 8. Significant Amendments and Events
The Plan was amended and restated effective as of March 15, 2000. The
restatement of the Plan and the subsequent issuance of a new Summary
Plan Description to participants as of March 2000, included various
changes to the Plan. The most significant changes included a revision
of Plan investment options to include managed, indexed and self-directed
portfolios and a change in the asset custodian to Reliance Trust
Company. Reliance Trust Company has been appointed as investment
manager by the Plan's Trustee, Virginia Bankers Association Benefits
Corporation, for all investment funds other than the Employer Stock
Fund. The Fiduciary, with respect to employer stock, is Citizens and
Farmers Bank.
10
<PAGE>
VIRGINIA BANKERS ASSOCIATION DEFINED CONTRIBUTION PLAN
FOR CITIZENS AND FARMERS BANK
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
Fair
Description of Asset Type of Asset Cost Value
---------------------------------- --------------------------------------- --------------- ---------------
<S> <C>
VBA Capital Preservation Fund Common Collective Trust Fund $ 216,511 $ 232,812
VBA Moderate Growth Fund Common Collective Trust Fund 328,377 420,295
VBA Wealth Building Fund Common Collective Trust Fund 1,262,200 1,983,723
VBA Aggressive Appreciation Fund Common Collective Trust Fund 738,485 1,108,289
C & F Financial Corporation -
Employer Stock Fund Common Stock 83,099 71,787
SouthTrust U.S. Treasury
Money Market Fund Cash Equivalent 254,015 254,015
Participant Note Loan 27,237 27,237
----------- -----------
$ 2,909,924 $ 4,098,158
=========== ===========
</TABLE>
11
<PAGE>
VIRGINIA BANKERS ASSOCIATION DEFINED
CONTRIBUTION PLAN FOR
C&F MORTGAGE CORPORATION
Richmond, Virginia
FINANCIAL REPORT
DECEMBER 31, 1999
<PAGE>
C O N T E N T S
Page
INDEPENDENT AUDITOR'S REPORT
ON THE FINANCIAL STATEMENTS 1
FINANCIAL STATEMENTS
Statements of net assets available for benefits 2
Statements of changes in net assets available
for benefits 3
Notes to financial statements 4-8
SUPPLEMENTAL SCHEDULE
Schedule of assets held for investment purposes 9
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Virginia Bankers Association Defined Contribution
Plan for C&F Mortgage Corporation
Richmond, Virginia
We have audited the accompanying statements of net assets available for
benefits of Virginia Bankers Association Defined Contribution Plan for C&F
Mortgage Corporation as of December 31, 1999 and 1998, and the related
statements of changes in net assets available for benefits for the years then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan as
of December 31, 1999 and 1998, and the changes in net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule as
listed in the accompanying table of contents is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Yount, Hyde & Barbour, P.C.
Winchester, Virginia
May 10, 2000
1
<PAGE>
VIRGINIA BANKERS ASSOCIATION DEFINED CONTRIBUTION PLAN
FOR C&F MORTGAGE CORPORATION
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
1999 1998
----------- ---------
Assets
Investments, at fair value $ 1,594,573 $ 917,948
----------- ----------
Receivables:
Employer contribution $ 146,801 $ 185,000
Participant contributions 151 23,033
----------- ----------
Total receivables $ 146,952 $ 208,033
----------- ----------
Cash $ 37,001 $ 66
----------- ----------
Total assets $ 1,778,526 $1,126,047
Liabilities
Other liabilities 19,623 30,482
----------- ----------
Net assets available for benefits $ 1,758,903 $1,095,565
=========== ==========
See Notes to Financial Statements.
2
<PAGE>
VIRGINIA BANKERS ASSOCIATION DEFINED CONTRIBUTION PLAN
FOR C&F MORTGAGE CORPORATION
Statements of Changes in Net Assets
Available for Benefits
For the Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---------- -----------
<S> <C>
Additions to net assets attributable to:
Investment income:
Net appreciation in fair value
of investments $ 193,940 $ 80,704
Interest and dividends 3,420 1,234
---------- ----------
$ 197,360 $ 81,938
---------- ----------
Contributions:
Employer $ 147,737 $ 185,000
Participant 496,896 434,770
Rollover contributions 1,985 36,925
---------- ----------
$ 646,618 $ 656,695
---------- ----------
Total additions $ 843,978 $ 738,633
---------- ----------
Deductions from net assets attributable to:
Benefits paid to participants $ 179,295 $ 102,509
Unallocated forfeitures - - 932
Administrative expenses 1,345 - -
---------- ----------
Total deductions $ 180,640 $ 103,441
---------- ----------
Net increase $ 663,338 $ 635,192
Net assets available for benefits:
Beginning of period 1,095,565 460,373
---------- ----------
End of period $1,758,903 $1,095,565
========== ==========
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
VIRGINIA BANKERS ASSOCIATION DEFINED CONTRIBUTION PLAN
FOR C&F MORTGAGE CORPORATION
Notes to Financial Statements
Note 1. Description of the Plan
The following description of the Virginia Bankers Association Defined
Contribution Plan for C&F Mortgage Corporation (Plan) provides only
general information. Participants should refer to the Plan agreement
for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan maintained by C&F Mortgage
Corporation pursuant to the provisions of Section 401(k) of the
Internal Revenue Code (Code) established for the benefit of
substantially all employees electing to participate in the Plan.
Employees are eligible to participate in the Plan on the first day
of the month following their employment date and must be eighteen
years old or older. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
As of January 1, 1999, the Plan was restated to include the
investment option of C&F Financial Corporation Stock (Employer
Stock) registered under the Securities Act of 1933. Prior to
restatement, the Plan was known as the C&F Mortgage Corporation
401(k) Plan.
Contributions
Each participant may elect to defer from 1% to 15% of their pretax
annual compensation, as defined in the Plan. The Company may also
make a discretionary profit sharing contribution, determined
annually by the Board of Directors. The contribution is allocated
in proportion of a participant's contributions to the total
contributions of all participants. Discretionary contributions
declared or made by the Company were $156,300 and $185,000 during
the plan years ended December 31, 1999 and 1998, respectively.
Participants entering the Plan may roll over contributions from
other plans. Contributions are subject to certain limitations as
established by the Internal Revenue Code.
Participants' Accounts
Each participant's account is credited with the participant's
contribution and allocations of the Company's contributions and
plan earnings. Allocations are based on participant contributions
or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from
the participant's vested account.
4
<PAGE>
Notes to Financial Statements
Vesting
The Plan's vesting provision provides that participants are
immediately vested in their elective contributions and earnings
thereon. Vesting in the Company's contributions occurs as follows:
<TABLE>
<CAPTION>
Vested Interest
----------------
Prior to Effective
Number of Years of January 1, January 1,
Vesting Service 1998 1998
-------------------- ----------- ----------------
<S> <C> <C>
Less than 1 year 0% 0%
1 year but less than 2 years 25% 0%
2 years but less than 3 years 50% 25%
3 years but less than 4 years 75% 50%
4 years but less than 5 years 100% 75%
5 years or more 100% 100%
</TABLE>
Investment Options
All assets in the Plan are directed by individual participants.
Participants are given the option to direct account balances and
all contributions made into any of 35 separate investment options
or managed accounts.
A participant may choose to invest up to 25% (in increments of 5%)
of their account balance and future contributions in the common
stock of C&F Financial Corporation (Employer Stock), the remaining
balance and future contributions may be invested in the other
investment fund options. Participants may change their investment
options the first day of the month of each quarter.
Payment of Benefits
Upon retirement or termination of service a participant may elect
to receive either a lump sum amount equal to the value of the
participants vested interest in his or her account, periodic
installments for a period of up to 10 years or a combination of
both. A written election must be made with the administrator at
least 30 days before the benefit payment date. Participants whose
vested account balance has never exceeded $5,000 must be paid out
in the form of a lump sum distribution.
Forfeited Accounts
At December 31, 1999 and 1998, forfeited nonvested accounts
totalling $8,563 and $932, respectively, were used to reduce
employer contributions for the year ended December 31, 1999.
5
<PAGE>
Notes to Financial Statements
Note 2. Summary of Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and changes therein, and disclosure of contingent assets
and liabilities. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan's investments in collective trusts as of December 31, 1998
are stated at contract value. Contract values as stated by Virginia
Bankers Association Benefits Corporation (VBA), the former Plan
Trustee, are determined by closing quoted market prices of the
underlying securities and therefore approximate fair value at the end
of the Plan year. As of December 31, 1999, investments in pooled
separate accounts of Manufacturers Life Insurance Company represents
ownership of units of participation in various mutual funds. The
value of a unit of participation is the total value of each mutual
fund within the separate accounts divided by the number of units
outstanding. The investments in the pooled separate accounts are
stated at fair value and are based on quoted redemption values of the
underlying mutual funds on the last day of the year. The Plan's
Guaranteed Interest Accounts, guarantee a rate of return for a defined
term. The assets are commingled with other assets of Manufacturers
Life Insurance Company's general account and are reported at fair
value as determined by Manufacturers Life Insurance Company. Common
stock is stated at the fair value determined by quoted market prices.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
In accordance with the policy of stating investments at current value,
net realized and unrealized appreciation (depreciation) for the year
is reflected in the statements of changes in net assets available for
plan benefits.
Benefit Payments
Benefit payments are recorded when paid.
6
<PAGE>
Notes to Financial Statements
Note 3. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan subject to the provisions of
ERISA. In the event of Plan termination, participants are 100 percent
vested in the portion of his or her account not previously vested.
Note 4. Investments
The Plan's investment assets are currently held by the custodians,
Manulife Financial and Raymond James Financial Services, Inc. The
Plan's investment assets for the year ended December 31, 1998, were held
by the former custodian, SouthTrust Asset Management Company. The
following table presents investments for the years ended December 31,
1999 and 1998 that represent 5 percent or more of the Plan's net assets.
December 31,
------------------
1999 1998
-------- --------
Manulife Lifestyle Fund - Balanced Portfolio $103,170 $ - -
Manulife Lifestyle Fund - Growth Portfolio 553,083 - -
Manulife Lifestyle Fund - Aggressive Portfolio 325,613 - -
Manulife Science & Technology Fund 123,298 - -
C&F Financial Corporation Stock 104,671 - -
VBA Moderate Growth Fund - - 73,216
VBA Wealth Building Fund - - 289,916
VBA Aggressive Appreciation Fund - - 519,274
During the years ended December 31, 1999 and 1998, the Plan's
investments (including gains and losses on investments bought and sold,
as well as held during the year) appreciated (depreciated) in value by
$193,940 and $80,704, respectively as follows:
1999 1998
---- ----
Common collective trust funds $ 140,518 $ 80,704
Pooled separate accounts 70,364 - -
Common stock (16,954) - -
Guaranteed investment contracts 12 - -
--------- --------
$ 193,940 $ 80,704
========= ========
7
<PAGE>
Note 5. Tax Status
The Internal Revenue Service has determined and informed the
trustee/administrator by a letter dated December 23, 1997, that the
Master Plan and related trust are designed in accordance with applicable
sections of the Internal Revenue Code (IRC). The Plan administrator and
Plan sponsor believe that the Plan is designed and currently being
operated in compliance with the applicable requirements of the IRC.
Note 6. Related Party Transactions
The majority of the Plan's assets as of December 31, 1998 were invested
in common collective trust funds which are managed by the Virginia
Bankers Association Benefits Corporation, Plan administrator and trustee
of the Plan during 1998 and until the fourth quarter of 1999.
Therefore, transactions in these funds qualify as a party-in-interest.
Fair market value of these funds are based on closing market quotes of
the underlying securities and fees charged for services by the party-in-
interest are based on customary rates for such services.
The Plan allows funds to be invested in the common stock of C&F
Financial Corporation, the parent company of C&F Mortgage Corporation,
the Plan Sponsor. Therefore C&F Financial Corporation is a party-in-
interest. Employer securities are allowed by ERISA and the Department
of Labor and the fair value of common stock is based on quotes from an
active market.
Note 7. Administrative Expenses
Certain administrative expenses are absorbed by C&F Mortgage
Corporation, the Plan sponsor.
Note 8. Significant Amendments Events
During the fourth quarter of 1999, C&F Mortgage Corporation changed
asset custodians from SouthTrust Asset Management Company of Georgia, N.
A. to Manulife Financial and Raymond James Financial Services, Inc.
Investments in C&F Financial Corporation stock are held with Raymond
James Financial Services, Inc. All remaining assets are held with
Manulife Financial.
The Plan's trustee was also changed from the Virginia Bankers
Association Benefits Corporation to the Corporation's Chief Financial
Officer and the Human Resource Manager. As of the date of our report,
the plan documents had not been finalized to reflect these changes.
8
<PAGE>
VIRGINIA BANKERS ASSOCIATION DEFINED CONTRIBUTION PLAN
FOR C&F MORTGAGE CORPORATION
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
Description of Asset Type of Asset Cost Value
-------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Manulife Lifestyle Fund-Aggressive Portfolio Pooled separate account $ 308,511 $ 325,613
Manulife Aggressive Growth Fund Pooled separate account 3,442 3,778
Manulife Balanced Fund Pooled separate account 38 39
Manulife Lifestyle Fund-Balanced Portfolio Pooled separate account 100,868 103,170
Manulife High-Quality Bond Fund Pooled separate account 4,323 4,322
Manulife Balanced Select Fund Pooled separate account 38 39
Manulife Capital Growth Stock Fund Pooled separate account 5,224 5,502
Manulife Lifestyle Fund-Conservative Portfolio Pooled separate account 7,446 7,458
Manulife Dividend & Growth Fund Pooled separate account 20,259 21,008
Manulife Discovery Fund Pooled separate account 76 79
Manulife Diversified Capital Fund Pooled separate account 76 78
Manulife Developing Markets Fund Pooled separate account 716 787
Manulife Emerging Growth Stock Fund Pooled separate account 2,374 2,516
Manulife Enterprise Fund Pooled separate account 25,096 27,032
Manulife Equity Income Fund Pooled separate account 1,271 1,310
Manulife Foreign Fund Pooled separate account 7,086 7,327
Manulife Growth & Income Fund Pooled separate account 10,929 11,236
Manulife Lifestyle Fund-Growth Portfolio Pooled separate account 530,196 553,083
Manulife Growth Opportunities Fund Pooled separate account 10,864 11,235
Manulife Growth Plus Stock Fund Pooled separate account 3,185 3,347
Manulife Growth Fund Pooled separate account 19,350 20,053
Manulife High-Yield Fund Pooled separate account 4,713 4,740
Manulife Index Stock Fund Pooled separate account 24,925 25,818
Manulife International Stock Fund Pooled separate account 23,658 25,353
Manulife Large-Cap Equity Fund Pooled separate account 20,193 21,172
Manulife Mid-Cap Equity Fund Pooled separate account 14,173 14,535
Manulife Mid-Cap Growth Fund Pooled separate account 9,405 10,047
Manulife Mid-Cap Value Fund Pooled separate account 1,853 1,908
Manulife Lifestyle Fund-Moderate Portfolio Pooled separate account 17,164 17,496
Manulife Overseas Fund Pooled separate account 5,942 6,404
Manulife Small-Cap Growth Fund Pooled separate account 12,021 13,215
Manulife Small Company Stock Fund Pooled separate account 13,756 14,462
Manulife Science & Technology Fund Pooled separate account 114,887 123,298
Manulife Selective Growth Stock Fund Pooled separate account 11,197 11,647
Manulife Small-Cap Value Fund Pooled separate account 175 180
Manulife Socially Responsible Fund Pooled separate account 3,915 4,054
Manulife Select Twenty Fund Pooled separate account 70,152 72,886
Manulife Total Return Fund Pooled separate account 251 251
Manulife Value & Restructuring Fund Pooled separate account 10,238 11,058
C&F Financial Corporation Common stock 120,033 104,671
Guaranteed Investment Contract Guaranteed interest accounts 2,361 2,366
----------- -----------
$ 1,542,380 $ 1,594,573
=========== ===========
</TABLE>
9
