C&F Financial Corporation

AI-generated fair value estimate for this company.

Method: 10-year excess-return (residual income) model anchored to Q2 2026 book value per share of USD85.46: cost of equity of 10.0% (CAPM with a 4.2% risk-free rate and a 5.5-6% equity risk premium for a small-cap bank, beta near 1.0); ROE held at 11.5% in years 1-5 (near actual trailing ROE of 11.1%-12.75%) with 75% earnings retention (25% payout, near the actual 22-25% payout ratio); ROE then fades linearly to 10.0% and payout rises to 50% by year 10 as growth normalizes; annual residual income (ROE minus cost of equity, times prior-year book value) discounted at 10% sums to about USD7.8 of per-share present value, added to the USD85.46 starting book value; terminal value is set equal to book value since ROE equals cost of equity beyond year 10, implying no further excess-return value

Reasoning: C&F Financial is a profitable, dividend-paying community bank holding company best valued from its equity base and the spread between ROE and cost of equity rather than a cash-flow multiple; anchoring to book value and fading the current above-cost-of-equity ROE toward the cost of equity avoids assuming permanent excess returns for a mature regional bank while still crediting its recently improving profitability, with ROE rising from 11.11% in full-year 2025 to 12.75% in Q2 2026