Edgar Filing: C & F FINANCIAL CORP

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

C&F FINANCIAL CORPORATION
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Notes:

[LOGO]

C&F Financial Corporation
Eighth and Main Streets
P.O. Box 391
West Point, Virginia 23181

Dear Fellow Shareholders:

You are cordially invited to attend the 2001 Annual Meeting of Shareholders
of C&F Financial Corporation, the holding company for Citizens and Farmers Bank.
The meeting will be held on Tuesday, April 17, 2001, at 3:30 p.m. at the Father
van den Boogaard Center, 3510 King William Avenue, West Point, Virginia. The
accompanying Notice and Proxy Statement describe the matters to be presented at
the meeting. Enclosed is our Annual Report to Shareholders that will be reviewed
at the Annual Meeting.

Please complete, sign, date, and return the enclosed proxy card as soon as
possible. Whether or not you will be able to attend the Annual Meeting, it is
important that your shares be represented and your vote recorded. The proxy may
be revoked at any time before it is voted at the Annual Meeting.

We appreciate your continuing loyalty and support of C&F Financial
Corporation.

Sincerely,

/s/ Larry G. Dillon
Larry G. Dillon
President & Chief Executive Officer

West Point, Virginia
March 19, 2001

C&F FINANCIAL CORPORATION
Eighth and Main Streets
P.O. Box 391
West Point, Virginia 23181

_________________________________________________________________

NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS

_________________________________________________________________

TO BE HELD APRIL 17, 2001

The 2001 Annual Meeting of Shareholders of C&F Financial Corporation (the
"Company") will be held at the Father van den Boogaard Center, 3510 King William
Avenue, West Point, Virginia, on Tuesday, April 17, 2001, at 3:30 p.m. for the
following purposes:

1. To elect two Class II directors to the Board of Directors of the
Company to serve until the 2004 Annual Meeting of Shareholders, as
described in the Proxy Statement accompanying this notice.

2. To ratify the Board of Directors' appointment of Yount, Hyde &
Barbour, P.C., as the Company's independent public accountants for
2001.

3. To transact such other business as may properly come before the
meeting or any adjournment thereof.

Shareholders of record at the close of business on February 19, 2001, are
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.

By Order of the Board of Directors

/s/ Gari B. Sullivan
Gari B. Sullivan
Secretary

March 19, 2001

IMPORTANT NOTICE

Please complete, sign, date, and return the enclosed proxy card in the
accompanying postage paid envelope so that your shares will be represented at
the meeting. Shareholders attending the meeting may personally vote on all
matters which are considered, in which event the signed proxies are revoked.

C&F FINANCIAL CORPORATION
Eighth and Main Streets
P.O. Box 391
West Point, Virginia 23181

PROXY STATEMENT
2001 ANNUAL MEETING OF SHAREHOLDERS
April 17, 2001

GENERAL

The following information is furnished in connection with the solicitation
by and on behalf of the Board of Directors of the enclosed proxy to be used at
the 2001 Annual Meeting of the Shareholders (the "Annual Meeting") of C&F
Financial Corporation (the "Company") to be held Tuesday, April 17, 2001, at
3:30 p.m. at the Father van den Boogaard Center, 3510 King William Avenue, West
Point, Virginia. The approximate mailing date of this Proxy Statement and
accompanying proxy is March 19, 2001.

Revocation and Voting of Proxies

Execution of a proxy will not affect a shareholder's right to attend the
Annual Meeting and to vote in person. Any shareholder who has executed and
returned a proxy may revoke it by attending the Annual Meeting and requesting to
vote in person. A shareholder may also revoke his proxy at any time before it is
exercised by filing a written notice with the Company or by submitting a proxy
bearing a later date. Proxies will extend to, and will be voted at, any properly
adjourned session of the Annual Meeting. If a shareholder specifies how the
proxy is to be voted with respect to any proposals for which a choice is
provided, the proxy will be voted in accordance with such specifications. If a
shareholder fails to specify with respect to such proposals, the proxy will be
voted FOR proposals 1, and 2, as set forth in the accompanying notice and
further described herein.

Voting Rights of Shareholders

Only those shareholders of record at the close of business on February 19,
2001, are entitled to notice of and to vote at the Annual Meeting, or any
adjournments thereof. The number of shares of common stock of the Company
outstanding and entitled to vote at the Annual Meeting is 3,568,039. The Company
has no other class of stock outstanding. A majority of the votes entitled to be
cast, represented in person or by proxy, will constitute a quorum for the
transaction of business. Each share of Company common stock entitles the record
holder thereof to one vote upon each matter to be voted upon at the Annual
Meeting.

With regard to the election of directors, votes may be cast in favor or
withheld. If a quorum is present, the nominees receiving a plurality of the
votes cast at the Annual Meeting will be elected directors; therefore, votes
withheld will have no effect. The ratification of Yount, Hyde & Barbour, P.C. as
the Company's independent public accountants requires an affirmative vote of a
majority of the shares cast on the matter. Thus, although abstentions and broker
non-votes (shares held by customers which may not be voted on certain matters
because the broker has not received specific instructions from the customers)
are counted for purposes of determining the presence or absence of a quorum for
the transaction of business, they are generally not counted for purposes of
determining whether such a proposal has been approved and therefore have no
effect.

Solicitation of Proxies

The cost of solicitation of proxies will be borne by the Company.
Solicitations will be made only by the use of the mail, except that officers and
regular employees of the Company and Citizens and Farmers Bank (the "Bank") may
make solicitations of proxies by telephone, telegram, special letter, or by
special call, acting without compensation other than regular compensation. It is
contemplated that brokerage houses and other nominees, custodians, and
fiduciaries will be requested to forward the proxy soliciting material to the
beneficial owners of the stock held of record by such persons, and the Company
will reimburse them for their charges and expenses in this connection.

Principal Holders of Capital Stock

The following table shows the share ownership as of February 19, 2001, of
the shareholders known to the Company to be the beneficial owners of more than
5% of the Company's common stock, par value $1.00 per share, which is the only
voting security outstanding.

Amount and Nature
Name and Address of Beneficial Percent
of Beneficial Owner Ownership/(1)/ of Class
------------------- -------------- --------

Trusco Capital Management 239,752 6.7%
200 South Orange Avenue
Orlando, Florida 32801

_________________________

/(1)/ For purposes of this table, beneficial ownership has been determined in
accordance with the provision of Rule 13d-3 of the Securities Exchange
Act of 1934 under which, in general, a person is deemed to be the
beneficial owner of a security if he or she has or shares the power to
vote or direct the voting of the security or the power to dispose of or
direct the disposition of the security, or if he or she has the right to
acquire beneficial ownership of the security within sixty days.

The following table sets forth certain information, as of February 19,
2001, about beneficial ownership of the Common Stock of the Company for each
director, director nominee, certain executive officers and for all directors,
director nominees, and executive officers of the Company as a group.

Number of Shares
Beneficially Owned/(1)/
Name as of February 19, 2001 Percent of Class
---- ----------------------- ----------------

Larry G. Dillon 48,368/(2)/ (1.4%)
James H. Hudson III 4,239/(3)/ *
J. P. Causey Jr. 34,938/(3)/ (1.0%)
Joshua H. Lawson 29,422/(3)/ *
William E. O'Connell Jr. 4,250/(3)/ *
Paul C. Robinson 4,692/(3)/ *
Thomas F. Cherry 5,700/(2)/ *
Gari B. Sullivan 6,683/(2)/ *
All Directors and Executive 138,292 (3.8%)
Officers as a group (8 persons)

____________________
* Represents less than 1% of the total outstanding shares of the Company's
common stock.

security if he has or shares the power to vote or direct the voting of the
security or the power to dispose of or direct the disposition of the
security, or if he has the right to acquire beneficial ownership of the
security within sixty days.

/(2)/ Includes 18,534 shares, 5,500 shares, and 5,200 shares for Mr. Dillon, Mr.
Cherry, and Mr. Sullivan, respectively, as to which they hold presently
exercisable options. A description of such options is set forth below in
greater detail in "Employee Benefit Plans - Incentive Stock Option Plan."

/(3)/ Includes 2,250 shares represented by presently exercisable options. A
description of the plan under which these options were issued is set forth
below in "Director Compensation."

PROPOSAL ONE
ELECTION OF DIRECTORS

The Company's Board is divided into three classes (I, II, and III) of
directors. The term of office for Class II directors will expire at the Annual
Meeting. Two persons named below, each of whom currently serves as a director of
the Company, will be nominated to serve as Class II directors. If elected, the
Class II nominees will serve until the 2004 Annual Meeting of Shareholders. The
persons named in the proxy will vote for the election of the nominees named
below unless authority is withheld. The Company's Board believes that the
nominees will be available and able to serve as directors, but if any of these
persons should not be available or able to serve, the proxies may exercise
discretionary authority to vote for a substitute proposed by the Company's
Board.

Certain information concerning the nominees for election at the Annual
Meeting as Class II directors is set forth below, as well as certain information
about the other Class III and I directors, who will continue in office until the
2002 and 2003 Annual Meeting of Shareholders, respectively.

Principal
Served Occupation During
Name (Age) Since/(1)/ Past Five Years
---------- ---------- ---------------

Class I Directors (Serving Until the 2003 Annual Meeting)

Larry G. Dillon (48) 1989 Chairman, President and
Chief Executive Officer of the
Company and the Bank

James H. Hudson III (52) 1997 Attorney-at-Law
Hudson & Bondurant, P.C.

Class II Directors (Nominees) (Serving Until the 2004 Annual Meeting)

Joshua H. Lawson (59) 1993 President, Thrift Insurance Corporation

Paul C. Robinson (43) 1994 President, Francisco, Robinson &
Associates, Inc.

Class III Directors (Serving Until the 2002 Annual Meeting)

J. P. Causey Jr. (57) 1984 Senior Vice President, Secretary &
General Counsel of Chesapeake
Corporation

William E. O'Connell Jr. (63) 1994 Chessie Professor of Business,
The College of William and Mary

/(1)/ Refers to the year in which the director was first elected to the Board
of Directors of the Bank.

The Board of Directors of the Bank consists of the six members of the
Company's Board listed above, as well as, Barry R. Chernack, P. L. Harrell,
Bryan E. McKernon, Reginald H. Nelson IV, and Thomas B. Whitmore Jr.

The Board of Directors is not aware of any family relationship between any
director or person nominated by the Company to become director; nor is the Board
of Directors aware of any involvement in legal proceedings which are material to
any impairment of the ability or integrity of any director or person nominated
to become a director. Unless authority for the nominees is withheld, the shares
represented by the enclosed proxy card, if executed and returned, will be voted
FOR the election of the nominees proposed by the Board of Directors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE DIRECTORS NOMINATED TO SERVE
AS CLASS II DIRECTORS.

Board Committees and Attendance

During 2000, there were nine meetings of the Board of Directors of the
Company. Each director attended at least 75% of all meetings of the boards and
committees on which he served. The Board of Directors of the Company has Capital
Plan and Audit Committees and the Board of Directors of the Bank has Executive
and Compensation Committees. The Board of Directors of the Company acts as the
nominating committee for nominees to be voted on for election as directors. In
its capacity as the nominating committee, the Board of Directors accepts
recommendations from shareholders concerning potential director nominees.

Members of the Capital Plan Committee are Messrs. Causey, Dillon, Hudson,
and O'Connell. The Capital Plan Committee reviews capital related matters and
submits proposals or recommendations to the Board of Directors. The Capital Plan
Committee did not meet during 2000.

Members of the Executive Committee are Messrs. Causey, Dillon, Hudson, and
O'Connell. The Executive Committee reviews various matters and submits proposals
or recommendations to the Board of Directors. The Executive Committee did not
meet during 2000.

Members of the Compensation Committee are Messrs. Causey, Harrell, Hudson,
and Whitmore. The Compensation Committee recommends the level of compensation
of each officer of the Bank, the granting of stock options and other employee
remuneration plans to the Board of Directors. The Compensation Committee met
four times during 2000.

Members of the Audit Committee are Messrs. Causey, Chernack, Lawson,
O'Connell and Robinson. The Audit Committee reviews and approves various audit
functions including the year-end audit performed by the Company's independent
public accountants. The Audit Committee met four times during 2000. See Report
of the Audit Committee on page 10.

Directors' Compensation

Each of the directors of the Company is also a director of the Bank. Non-
employee members of the Board of Directors of the Bank receive an annual
retainer of $2,500, payable quarterly, with a base meeting fee of $300 per day
for Company or Bank meetings and a fee of $100 for each secondary meeting of the
Company, Bank, or any committees thereof held on the same day as a meeting for
which the base meeting fee is paid.

In addition to cash compensation, non-employee members of the Board of
Directors of the Bank participate in the Non-Employee Directors' Stock
Compensation Plan. Under this plan, directors are granted the option to purchase
the Company's common stock at a price equal to the fair market value of the
stock at the date of grant. Options are exercisable twelve months after the date
of grant and expire ten years from the date of grant. On May 1, 2000, all non-
employee members of the Board of Directors were granted 1,500 options at a price
of $16.00 per share.

Interest of Management in Certain Transactions

As of December 31, 2000, the total maximum extensions of credit (including
used and unused lines of credit) to policy-making officers, directors, and their
associates amounted to $2,510,347, or 6.47%, of total year-end capital. The
maximum aggregate amount of such indebtedness during 2000 was $1,044,784, or
2.69%, of total year-end capital. These loans were made in the ordinary course
of the Bank's business, on the same terms, including interest rates and
collateral, as those prevailing at the same time for comparable transactions
with others, and do not involve more than the normal risks of collectibility or
present other unfavorable features. The Bank expects to have in the future
similar banking transactions with officers, directors, and their associates.

Executive Compensation

Summary of Cash and Certain Other Compensations. The following table shows
the cash compensation paid to Mr. Dillon, President and Chief Executive Officer
of the Company, Thomas F. Cherry, Senior Vice President and Chief Financial
Officer of the Company, and Gari B. Sullivan, Senior Vice President and
Secretary of the Company, during 2000, 1999, and 1998. During 2000, no other
executive officer of the Company received compensation in excess of $100,000.

SUMMARY COMPENSATION TABLE

Long-Term
Annual Compensation Compensation
------------------- ------------
All
Name and Other Annual Other
Principal Position Year Salary Bonus/(1)/ Compensation/(2)/ Options/(3)/ Compensation/(4)/
------------------ ---- ------ ---------- ----------------- ------------ -----------------

Larry G. Dillon 2000 $167,500 $50,000 - 3,500 $28,023
President/Chief 1999 152,500 50,000 - 3,500 22,736
Executive Officer 1998 140,000 50,000 - 3,500 22,842

Thomas F. Cherry 2000 100,000 20,000 - 2,500 21,773
Senior Vice 1999 89,000 20,000 - 2,500 10,410
President/CFO 1998 77,500 15,000 - 2,500 9,010

Gari B. Sullivan 2000 90,500 13,000 - 2,000 29,089
Senior Vice 1999 87,500 13,000 - 2,000 29,812
President/Secretary 1998 85,500 12,000 - 1,500 28,619

_______________

/(1)/ All bonuses were paid under the Management Incentive Bonus Plan.
/(2)/ The amount of compensation in the form of perquisites or other personal
benefits properly categorized in this column according to the disclosure
rules adopted by the Commission did not exceed the lesser of either
$50,000, or 10% of the total annual salary and bonus reported in each of
the three years reported for Mr. Dillon, Mr. Cherry, and Mr. Sullivan.
/(3)/ Year 2000 options were granted at an exercise price of $15.75 per share;
year 1999 options were granted at an exercise price of $17.00 per share;
year 1998 options were granted at an exercise price of $18.625 per share.
/(4)/ $7,680, $8,000, and $8,667, were contributed for Mr. Dillon, $5,773,
$5,210, and $4,501 were contributed for Mr. Cherry, and $4,980, $4,975,
and $5,102, were contributed for Mr. Sullivan under the Bank's Profit-
Sharing Plan for 2000, 1999, and 1998, respectively. $6,218, $6,736, and
$5,454, were contributed for Mr. Dillon and $18,334, $19,861, and
$18,334, were contributed for Mr. Sullivan under the Bank's Split-Dollar
Insurance Program for 2000, 1999, and 1998, respectively. $8,000, $8,000,
and $8,721 were contributed for Mr. Dillon,

$6,000, $5,200, and $4,509, were contributed for Mr. Cherry, and $5,775,
$4,975, and $5,183, were contributed for Mr. Sullivan under the Bank's
401(k) Plan for 2000, 1999, and 1998, respectively. $5,635 and $10,000
were contributed for Mr. Dillon and Mr. Cherry, respectively, under the
Company's Executive's Deferred Compensation Plan for 2000.

Stock Options and SAR. The following table shows all grants of options to
Messrs. Dillon, Cherry, and Sullivan in 2000:

Option/SAR Grants in Last Fiscal Year

Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
------------------------------------------------------------- ---------------
% of Total
Options Granted Exercise or
Options to Employees in Base Price Expiration 5% 10%
Name Granted (#) /(1)/ Fiscal Year ($/Sh) Date ($) ($)
---- --------------- ----------- ------ ---- --- ---

Larry G. Dillon 3,500 6.21% $15.75 12/17/10 $34,668 $87,855
Thomas F. Cherry 2,500 4.44% $15.75 12/17/10 24,763 62,754
Gari B. Sullivan 2,000 3.55% $15.75 12/17/10 19,810 50,203

___________________

/(1)/ Vesting is as follows: 100% on December 17, 2005.

Option/SAR Exercises and Holdings. The following table shows stock
options exercised by Messrs. Dillon, Cherry, and Sullivan in 2000:

Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End
Options/SAR Values

Value of Unexercised
Number of Unexercised In-the-Money
Options at Options at
Shares December 31, 2000 (#) December 31, 2000($)
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
---- ------------ ------------ ------------- -------------

Larry G. Dillon 1,200 10,650 18,534/ 70,200/
8,166 0
Thomas F. Cherry -- -- 5,500/ 10,375/
5,000 0
Gari B. Sullivan 3,200 30,894 5,200/ 12,900/
4,500 0

Change in Control Agreements

The Company has entered into "change in control agreements" with Mr.
Dillon and Mr. Cherry. The agreement for Mr. Dillon provides certain payments
and benefits in the event of a termination of his employment

by the Company without "cause," or by Mr. Dillon for "good reason," during the
period beginning on the occurrence of a "change in control" (as defined) of the
Company and ending sixty-one days after the second anniversary of the change in
control date. In such event, Mr. Dillon would be entitled (i) to receive in 12
consecutive quarterly installments, or in a lump sum, two and one-half times the
sum of his highest aggregate annual base salary during the 24 month period
preceding the change in control date and his highest aggregate annual bonus for
the three fiscal years preceding the change in control date; (ii) for a period
of three years following termination, to receive continuing health insurance,
life insurance, split-dollar insurance, and similar benefits under the Company's
welfare benefit plans and to have the three year period credited as service
towards completion of any service requirement for retiree coverage under the
Company's welfare benefit plans; and (iii) if Mr. Dillon requests within one
year after his termination to have the Company acquire his residence for its
appraised fair market value.

The agreement for Mr. Cherry provides certain payments and benefits in the
event of a termination of his employment by the Company without "cause," or by
Mr. Cherry for "good reason," during the period beginning on the occurrence of a
"change in control" (as defined) of the Company and ending sixty-one days after
the first anniversary of the change in control date. In such event, Mr. Cherry
would be entitled (i) to receive in 4 consecutive quarterly installments, or in
a lump sum, the sum of his highest aggregate annual base salary during the 24
month period preceding the change in control date and his highest aggregate
annual bonus for the three fiscal years preceding the change in control date;
and (ii) for a period of one year following termination, to receive continuing
health insurance, life insurance, and similar benefits under the Company's
welfare benefits plans and to have the one year period credited as service
towards completion of any service requirement for retiree coverage under the
Company's welfare benefit plans.

During the term of the agreements following a change in control, Mr.
Dillon or Mr. Cherry may voluntarily terminate his employment and become
entitled to these payments and benefits under certain circumstances. These
circumstances include, but are not limited to, a material adverse change in his
position, authority, or responsibilities, or a reduction in his rate of annual
base salary, benefits (including incentives, bonuses, stock compensation, and
retirement and welfare plan coverage), or other perquisites as in effect
immediately prior to the change in control date.

Payments and benefits provided under the agreements will be reduced, if
and to the extent necessary, so that Mr. Dillon and Mr. Cherry will not be
subject to a federal excise tax on, and the Company will not be denied an income
tax deduction on account of having made, excess parachute payments.

Employee Benefit Plans

The Bank has a Non-Contributory Defined Benefit Retirement Plan (the
"Retirement Plan") covering substantially all employees who have reached the age
of 21 and have been fully employed for at least one year. The Retirement Plan
provides participants with retirement benefits related to salary and years of
credited service. Employees become vested after five plan years of service, and
the normal retirement date is the plan anniversary date nearest the employee's
65th birthday. The Retirement Plan does not cover directors who are not active
officers. The amount expensed for the Retirement Plan during the year ended
December 31, 2000, was $153,684.

The following table shows the estimated annual retirement benefits payable
to employees in the average annual salary and years of service classifications
set forth below assuming retirement at the normal retirement age of 65.

Consecutive Five-Year Years of Credited Service
Average Salary 15 20 25 30 35
---------------------- ------- ------- ------- ------- --------

$ 25,000 $ 4,688 $ 6,250 $ 7,813 $ 8,750 $ 9,688
40,000 8,018 10,690 13,363 15,035 16,708
55,000 12,518 16,690 20,863 23,660 26,458
75,000 18,518 24,690 30,863 35,160 39,458
100,000 26,018 34,690 43,363 49,535 55,708
125,000 33,518 44,690 55,863 63,910 71,958
150,000 41,018 54,690 68,363 78,285 88,208
170,000 47,018 62,690 78,363 89,785 101,208

Benefits under the Retirement Plan are based on a straight life annuity
assuming full benefit at age 65, no offsets, and covered compensation of $35,400
for a person age 65 in 2000. Compensation is currently limited to $170,000 by
the Internal Revenue Code. The estimated annual benefit payable under the
Retirement Plan upon retirement is $91,061, $56,634, and $23,683 for Messrs.
Dillon, Cherry, and Sullivan, respectively, credited with 40 years of service
for Messrs. Dillon and Cherry and 15 years of service for Mr. Sullivan.
Benefits are estimated on the basis that they will continue to receive, until
age 65, covered salary in the same amount paid in 2000.

Compensation Committee Report on Executive Compensation

The Compensation Committee (the "Committee"), which is composed of non-
employee Directors of the Company and the Bank listed below, recommends to the
Board of Directors of the Bank (the "Bank Board") the annual salary levels and
any bonuses to be paid to the Bank's executive officers. The Committee also
makes recommendations to the Bank Board regarding the issuance of stock options
and other compensation related matters.

Currently, the individuals serving as Chief Executive Officer and
executive officers of the Company also serve in the same capacities,
respectively, for the Bank. These officers are presently compensated for
services rendered by them to the Bank, but not for services rendered by them to
the Company.

The primary objective of the Bank's executive compensation program is to
attract and retain highly skilled and motivated executive officers who will
manage the Bank in a manner to promote its growth and profitability and advance
the interest of the Company's shareholders. As such, the compensation program
is designed to provide levels of compensation which are reflective of both the
individual's and the organization's performance in achieving the organization's
goals and objectives, both financial and non-financial, and in helping to build
value for the Company's shareholders. Based on its evaluation of these factors,
the Committee believes that the executive officers are dedicated to achieving
significant improvements in long-term financial performance and that the
compensation plans the Committee has implemented and administered have
contributed to achieving this management focus.

The principal elements of the Bank's compensation program include base
annual salary, split-dollar insurance participation, short-term incentive
compensation under the Bank's Management Incentive Bonus Plan (detailed below),
long-term incentives through the grants of stock options under the Incentive
Plan (detailed below), and, starting in 2000, employer contributions under the
amended Executive's Deferred Compensation Plan (detailed below).

The Bank adopted a Management Incentive Bonus Plan (the "Bonus Plan")
effective January 1, 1987. The Bonus Plan is offered to selected members of
management. The bonus is derived from a pool of funds determined by the Bank's
total performance relative to (1) prescribed growth rates of assets and
deposits, (2)

return on average assets, and (3) absolute level of net income. Attainment, in
whole or in part, of these goals dictates the amount set aside in the pool of
funds. Evaluation of attainment and approval of the pool amount is done by the
Bank Board. Payment of the bonus is based on individual performance and paid in
cash as a percentage of the respective individual's base salary. Expense is
accrued in the year of the specified performance.

The Company adopted the 1994 Incentive Stock Option Plan (the "Incentive
Plan") effective May 1, 1994. The Incentive Plan was amended by the Company on
February 15, 2000. The Incentive Plan makes available up to 500,000 shares of
common stock for awards to key employees of the Company and its subsidiaries in
the form of stock options, stock appreciation rights, and restricted stock
(collectively, "Awards"). The purpose of the Incentive Plan is to promote the
success of the Company and its subsidiaries by providing incentives to key
employees that will promote the identification of their personal interests with
the long term financial success of the Company and with growth in shareholder
value. The Incentive Plan is designed to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of key employees upon
whose judgment, interest, and special effort the successful conduct of its
operation is largely dependent.

In considering compensation for the Chief Executive Officer and the other
executive officers, the Committee relied on compensation surveys and an
evaluation of the officers' level of responsibility and performance. In 1999,
the Committee used the following compensation surveys to assist in developing
its recommendation on compensation for 2000: the SNL Executive Compensation
Review; the Sheshunoff Bank Executive and Director Compensation Survey; and the
Virginia Bankers Association's Salary Survey of Virginia Banks. The Committee
believes that these are relevant and appropriate indicators of compensation paid
by the Bank's competitors. The Committee received an evaluation by the Chief
Executive Officer of the performance of the executive officers (other than the
Chief Executive Officer) during 1999. The Committee evaluated the performance of
the Chief Executive Officer based on the financial performance of the Company
and the Bank, achievements in implementing the Bank's long-term strategy, and
the personal observations of the Chief Executive Officer's performance by the
members of the Committee. No particular weight was given to any aspect of the
performance of the Chief Executive Officer, but his performance in 1999 was
evaluated as outstanding, with the Company and the Bank achieving earnings in
excess of its peer group and significant progress being made on the Bank's long-
term strategy.

Based on the salary surveys and the performance evaluations, the Committee
generally set base annual salaries for the Chief Executive Officer and the other
executive officers in the median range of salaries contained in the various
surveys for comparable positions.

The Committee also reviewed each executive officer's performance and
responsibility to assess the payment of short-term incentive compensation. The
Committee uses the compensation surveys and considers the performance of the
Bank relative to its peer group, taking into consideration profit growth, asset
growth, return on equity, and return on assets. No particular weight is given to
each of these elements. The cash bonuses were given based upon the role of such
officers in the growth and profitability of the Bank in 2000.

Each year, the Committee also considers the desirability of granting long-
term incentive awards under the Company's Incentive Plan. The Committee
believes that grants of options focus the Bank's senior management on building
profitability and shareholder value. The Committee notes in particular its view
that stock option grants afford a desirable long-term compensation method
because they closely ally the interest of management with shareholder value. In
fixing the grants of stock options with the senior management group, other than
the Chief Executive Officer, the Committee reviewed with the Chief Executive
Officer recommended individual awards, taking into account the respective scope
of responsibility and contributions of each member of the senior management
group. The award to the Chief Executive Officer was fixed separately and was
based, among other things, on the review of competitive compensation data from
selected peer companies and information on his total compensation, as well as,
the Committee's perception of his past and expected future contributions to the
Company's achievement of its long-term goals.

For 2000 and ensuing years, the Committee determined that additional
retirement funding for select executives is appropriate and should be provided
by amending its non-qualified defined contribution plan known as the Executive's
Deferred Compensation Plan (which previously only provided for elective salary
and bonus

deferrals). These employer contributions are in the form of additional
retirement contributions to make up for arbitrary limitations on covered
compensation imposed by the Internal Revenue Code with respect to the Bank's
Profit Sharing / 401(k) Plans and to enhance retirement benefits by providing
supplemental contributions from time to time on such basis as the Committee and
the Board determine.

Compensation Committee

J. P. Causey Jr. - Chairman
P. L. Harrell
James H. Hudson III
Thomas B. Whitmore Jr.

Compensation Committee Interlocks and Insider Participation

During 2000 and up to the present time, there were transactions between
the Company's banking subsidiary and certain members of the Compensation
Committee, or their associates, all consisting of extensions of credit by the
Bank in the ordinary course of business. Each transaction was made on
substantially the same terms, including interest rates, collateral and repayment
terms, as those prevailing at the time for comparable transactions with the
general public. In the opinion of management, none of the transactions involved
more than the normal risk of collectibility or present other unfavorable
features.

None of the members of the Compensation Committee has served as an officer
or employee of the Company or any of its affiliates. No director may serve as a
member of the Committee if he is eligible to participate in the Incentive Plan
or was at any time within one year prior to his appointment to the Committee
eligible to participate in the Incentive Plan.

Report of the Audit Committee

The Audit Committee of the Board of Directors of the Company (the "Board"),
which consists entirely of directors who meet the independence requirements of
Rule 4200(a)(15) of the National Association of Securities Dealers listing
standards, has furnished the following report:

The Audit Committee assists the Board in overseeing and monitoring the
integrity of the Company's financial reporting process, its compliance with
legal and regulatory requirements and the quality of its internal and external
audit processes. The role and responsibilities of the Audit Committee are set
forth in a written Charter adopted by the Board, which is attached as Appendix 1
to this Proxy Statement. The Audit Committee reviews and reassesses the Charter
annually and recommends any changes to the Board for approval.

The Audit Committee is responsible for overseeing the Company's overall
financial reporting process. In fulfilling its oversight responsibilities for
the financial statements for fiscal year 2000, the Audit Committee:

. Reviewed and discussed the audited financial statements for the fiscal
year ended December 31, 2000 with management and Yount, Hyde &
Barbour, P.C. ("YHB"), the Corporation's independent accountants;

. Discussed with YHB the matters required to be discussed by Statement
on Auditing Standards No. 61 relating to the conduct of the audit; and

. Received written disclosures and the letter from YHB regarding its
independence as required by Independence Standards Board Standard No.
1. The Audit Committee discussed with YHB their independence.

The Audit Committee also considered the status of pending litigation,
taxation matters and other areas of oversight relating to the financial
reporting and audit process that the Audit Committee determined appropriate.

Based on the Audit Committee's review of the audited financial statements
and discussions with management and YHB, the Audit Committee recommended to the
Board that the audited financial statements be included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000 for filing with
the Securities and Exchange Commission.

Audit Committee

Joshua H. Lawson, Chairman
J. P. Causey Jr
Barry R. Chernack
William E. O'Connell Jr.
Paul C. Robinson

Principal Accounting Fees

During 2000, the Company paid its principal accounting firm, Yount, Hyde &
Barbour, P.C., $57,600 in audit fees. The Company paid Yount, Hyde & Barbour,
P.C. an additional $3,000 for review of the Company's financial statements
included in its Forms 10-Q. The Company paid no fees to Yount, Hyde & Barbour,
P.C. for services regarding Financial Information System Design and
Implementation.

Performance Graph

The following graph compares the yearly cumulative total shareholder
return on the Company's common stock with (1) the yearly cumulative total
shareholder return on stocks included in the NASDAQ stock index and (2) the
yearly cumulative total shareholder return on stocks included in the Independent
Bank Index prepared by the Carson Medlin Company. The Independent Bank Index is
the compilation of the total return to shareholders over the past 5 years of a
group of twenty-three independent community banks located in the southeastern
states of Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee,
Virginia, and West Virginia.

There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
below.

C&F FINANCIAL CORPORATION
Five Year Performance Index

[GRAPH]

1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
C&F FINANCIAL CORPORATION 100 94 135 199 187 164
INDEPENDENT BANK INDEX 100 128 193 204 185 191
NASDAQ INDEX 100 123 151 213 395 238

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires directors, executive
officers, and 10% beneficial owners of the Company's common stock to file
reports concerning their ownership of common stock. The Company believes that
its officers and directors complied with all filing requirements under Section
16(a) of the Securities Exchange Act of 1934 during 2000.

PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors, subject to ratification by the shareholders, has
appointed Yount, Hyde & Barbour, P.C. as independent public accountants for the
current fiscal year ending December 31, 2001.

A representative of Yount, Hyde & Barbour, P.C. will be present at the
Annual Meeting and will be given the opportunity to make a statement and respond
to appropriate questions from the shareholders. Unless marked to the contrary,
the shares represented by the enclosed proxy card, if executed and returned,
will be voted FOR the ratification of the appointment of Yount, Hyde & Barbour,
P.C. as the independent public accountants of the Company.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE APPOINTMENT
OF YOUNT, HYDE & BARBOUR, P.C. AS INDEPENDENT PUBLIC ACCOUNTANTS.

OTHER BUSINESS

As of the date of this Proxy Statement, management of the Company has no
knowledge of any matters to be presented for consideration at the Annual Meeting
other than those referred to above. If any other matters properly come before
the Annual Meeting, the persons named in the accompanying proxy intend to vote
such proxy, to the extent entitled, in accordance with their best judgment.

SHAREHOLDER PROPOSALS FOR 2002 ANNUAL MEETING

Proposals of shareholders intended to be presented at the 2002 Annual
Meeting must be received by the Company no later than November 6, 2001. Under
applicable law, the Board of Directors need not include an otherwise appropriate
shareholder proposal (including any shareholder nominations for director
candidates) in its proxy statement or form of proxy for that meeting unless the
proposal is received by the Company's Secretary, at the Company's principal
office in West Point, Virginia, on or before the date set forth above.

By Order of the Board of Directors

/s/ Gari B. Sullivan
Gari B. Sullivan
Secretary

West Point, Virginia
March 19, 2001

A copy of the Company's Annual Report on Form 10-K Report (including exhibits)
as filed with the Securities and Exchange Commission for the year ended December
31, 2000, will be furnished without charge to shareholders upon written request
directed to the Company's Secretary as set forth on the first page of this Proxy
Statement.

Appendix

AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

CHARTER

I. PURPOSE

The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling their responsibility to the shareholders, potential
shareholders, and the investment community relating to corporate accounting,
reporting practices of the Company, and the quality and integrity of the
financial reports of the Company. Consistent with this function, the Audit
Committee should encourage continuous improvement of, and should foster
adherence to, the Company's policies, procedures and practices at all levels.
The Audit Committee's primary duties and responsibilities are to:

. Serve as an independent and objective party to monitor the
Company's financial reporting process and internal control
system.

. Review and appraise the audit efforts of the Company's
independent accountants and internal audit function.

. Provide an open avenue of communication among the Company's
independent accountants, financial and senior management, the
internal audit function, and the Board of Directors

The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities enumerated in Section IV of this Charter.

II. COMPOSITION

The Audit Committee shall be composed of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Committee.

All members of the Committee shall have a working familiarity with basic
finance and accounting practices, and at least one member of the Committee shall
have accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Company or an outside consultant.

The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board and shall serve until the next annual
organizational meeting or until their successors shall be duly elected and
qualified. Unless a Chair is elected by the full Board, the members of the
Committee may designate a Chair by majority vote of the full Committee
membership.

III. MEETINGS

The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management, the director of the
internal audit function and the partner in charge of the Company's external
audit in separate executive session to discuss any matters that the Committee or
each of these groups believe should be discussed privately.

IV. RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties the Audit Committee shall:

Documents/Reports Review
------------------------

1. Review and update this Charter periodically, but at least annually, as
conditions dictate.

2. Review the Company's annual audited financial statements with management
and the independent accountants.

3. Review the regular internal reports to management prepared by the internal
audit function and management's response.

4. Require that the Company's independent accountants review the Form 10-Q
prior to its filing and issue a report on such review.

Independent Accountants and Internal Auditors
---------------------------------------------

5. Recommend to the Board of Directors the selection of the independent
accountants and the internal auditors considering independence and
effectiveness and approve the fees and other compensation to be paid to the
independent accountants and internal auditors. On an annual basis, the
Committee should review and discuss with the accountants all significant
relationships the accountants have with the Company and consider the
accountants' independence.

6. Review and discuss with the independent accountants the matters required to
be discussed by Statement on Auditing Standards No. 61.

7. Review the performance of the independent accountants and internal auditors
and approve any proposed discharge of the independent accountants and
internal auditors when circumstances warrant.

8. Periodically discuss with the independent accountants and internal auditors
out of the presence of management the Company's internal controls and the
fullness and accuracy of the Company's financial statements.

Financial Reporting Process
---------------------------

9. In consultation with the independent accountants and the internal auditors,
review the integrity of the Company's financial reporting processes, both
internal and external.

10. Consider the independent accountants' judgments about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.

11. Consider and approve major changes, if appropriate, to the Company's
auditing and accounting principles and practices as suggested by the
independent accountants, management, or the internal auditors.

12. Recommend to the Board of Directors the audited financial statements be
included in the Company's Annual Report on Form 10-K.

Process Improvement
-------------------

13. Establish regular and separate systems of reporting to the Audit Committee
by each of management, the independent accountants and the internal
auditors regarding any significant judgments made in management's
preparation of the financial statements and the view of each as to
appropriateness of such judgments.

14. Following completion of the annual audit, review separately with each of
management, the independent accountants and the internal auditors any
significant difficulties encountered during the course of the audit,
including any restrictions on the scope of work or access to required
information.

15. Review any significant disagreement among management, the independent
accountants or the internal auditors in connection with the preparation of
the financial statements or other matters.

16. Review with the independent accountants, the internal auditors and
management the extent to which changes or improvements in financial or
accounting practices, as approved by the Audit Committee, have been
implemented. (This review should be conducted at an appropriate time
subsequent to implementation of changes or improvements as decided by the
Committee.)

C&F FINANCIAL CORPORATION

This Proxy is solicited on behalf of the Board of Directors

The undersigned hereby appoints Larry G. Dillon and James H. Hudson III,
jointly and severally as proxies, with full power to act alone, and with full
power of substitution to represent the undersigned, and to vote all shares of
the Company standing in te name of the undersigned as of February 19, 2001, at
the annual meeting of shareholders to be held Tuesday, April 17, 2001 - 3:30
p.m. at the Father van den Boogaard Center, 3510 King Williams Avenue, West
Point, Virginia, or any adjournments thereof, on each of the following matters.
This proxy, when properly executed, will be voted in the manner directed by
the undersigned shareholder. If no direction is made, this proxy will be
voted FOR each proposal and on other matters at the discretion of the proxy
agents.

(Continued and to be signed on Reverse Side)

Please sign, date and mail your
proxy card back as soon as possible!

Annual Meeting of Shareholders
C&F FINANCIAL CORPORATION

April 17, 2001

Please Detach and Mail in the Envelope Provided

A [X] Please mark your votes as in this example.

1. To elect two Class II directors to serve until the 2004 Annual Meeting of
Shareholders, or until their successors are elected and qualified, as
instructed below.

[ ] FOR all nominees [ ] WITHHELD from Nominees:
(except as marked to all nominees. Joshua H. Lawson
the contrary below.) Paul C. Robinson

(Instruction: To withhold authority to vote for any nominee(s), write that
nominee(s) name on the space provided below.)

-----------------------------------------------------------------------------

2. Proposal to ratify the appointment of Yount, Hyde & Barbour, P.C. as
independent public accountants of the Company for 2001.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. The transaction of any other business as may properly come before the Annual
Meeting or any adjournment thereof. Management presently knows of no other
business to be presented at the Annual Meeting.

Meeting Attendance
------------------

I plan to attend the annual meeting on Tuesday, April 17th, 2001 at the
location printed on the back. I will also note the number of attendees.

Will Attend Meeting [ ] Will not Attend Meeting [ ]

Number of Attendees

----------------------------------

Signature _____________________________________ Dated: _______________ , 2001

NOTE: Please sign your name(s) exactly as shown imprinted hereon. When shares
are held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.