SECURITIES AND EXCHANGE COMMISSION PRIVATE WASHINGTON, D.C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarterly period Ended March 31, 1998 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from to Commission File No. 0-12896 (1934 Act) OLD POINT FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Virginia 54-1265373 (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 1 West Mellen Street, Hampton, Va. 23663 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (757) 722-7451 Not Applicable __________________________________________________ Former name, former address and former fiscal year, if changed since last report. Check whether the registrant (1) has filed all reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No State the number of shares outstanding of each of the issuer's classes of common stock as of April 30, 1998. Class Outstanding at April 30, 1998 Common Stock, $5.00 par value 2,567,372 shares
OLD POINT FINANCIAL CORPORATION FORM 10-Q INDEX PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements..............................................1 Consolidated Balance Sheets March 31, 1998 and December 31, 1997......................1 Consolidated Statement of Earnings Three months ended March 31, 1998 and 1997................2 Consolidated Statement of Cash Flows Three months ended March 31, 1998 and 1997................3 Consolidated Statements of Changes in Stockholders' Equity Three months ended March 31, 1998 and 1997................4 Notes to Consolidated Financial Statements........................5 Parent Only Balance Sheets March 31, 1998 and December 31, 1997..............6 Parent Only Statement of Earnings Three months ended March 31, 1998 and 1997........6 Parent Only Statement of Cash Flows Three months ended March 31, 1998 and 1997........7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................8 Analysis of Changes in Net Interest Income................9 Interest Sensitivity Analysis............................12 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K.................................13 (i)
<TABLE> <CAPTION> PART 1. - FINANCIAL INFORMATION OLD POINT FINANCIAL CORPORATION Consolidated Balance Sheets March 31, December 31, (Unaudited) 1998 1997 <S> <C> <C> Assets Cash and due from banks...................... $10,110,121 $12,114,450 Interest bearing balances due from banks..... 29,232 93,958 Securities available for sale, at market..... 66,682,747 67,546,008 Securities to be held to maturity............ 48,974,450 28,979,825 Trading account securities................... 0 0 Federal funds sold........................... 21,073,706 6,977,386 Loans, total................................. 224,372,664 221,743,937 Less reserve for loan losses............. 2,626,302 2,671,174 ----------- ----------- Net loans............................ 221,746,362 219,072,763 Bank premises and equipment.................. 10,670,671 9,742,209 Other real estate owned...................... 579,773 773,864 Other assets................................. 3,870,374 3,370,689 ----------- ------------ Total assets............................ $383,737,436 $348,671,152 ============ ============ Liabilities Noninterest-bearing deposits................. $61,749,716 $52,359,579 Savings deposits............................. 118,190,292 99,991,102 Time deposits................................ 142,267,840 134,749,126 ----------- ----------- Total deposits............................ 322,207,848 287,099,807 Federal funds purchased and securities sold under agreement to repurchase............ 19,136,224 20,164,902 Interest-bearing demand notes issued to the United States Treasury and other liabilities for borrowed money............ 3,464,234 4,025,090 --------- --------- Other liabilities............................ 1,787,304 1,048,885 Total liabilities......................... $346,595,610 $312,338,684 Stockholders' Equity Common stock, $5.00 par value................ 12,836,860 12,830,860 1998 1997 Shares authorized.............6,000,000 6,000,000 Shares outstanding............2,567,372 2,566,172 Surplus...................................... 9,731,101 9,693,301 Undivided profits............................ 13,966,332 13,097,716 Unrealized gain/(loss) on securities ........ 607,533 710,591 ---------- ---------- Total stockholders' equity................... 37,141,826 36,332,468 Total liabilities and stockholders' equity... $383,737,436 $348,671,152 ============ ============ See accompanying notes - 1 - </TABLE>
<TABLE> <CAPTION> OLD POINT FINANCIAL CORPORATION Three Months Ended Consolidated Statements of Earnings March 31, (Unaudited) 1998 1997 Interest Income <S> <C> <C> Interest and fees on loans................... $4,923,323 $4,405,873 Interest on federal funds sold............... 182,156 40,426 Interest on securities: Taxable................................... 1,125,681 1,110,912 Exempt from Federal income tax............ 372,649 273,600 --------- --------- Total interest on securities........... 1,498,330 1,384,512 --------- --------- Total interest income.................... 6,603,809 5,830,811 Interest Expense Interest on savings deposits................. 752,215 673,047 Interest on time deposits.................... 1,915,351 1,611,586 Interest on federal funds purchased and securities sold under agreement to repurchase 233,701 185,349 Interest on demand notes (note balances) issued to the United States Treasury and on other borrowed money 27,810 22,167 --------- --------- Total interest expense................... 2,929,077 2,492,149 Net interest income.......................... 3,674,732 3,338,662 Provision for loan losses.................... 150,000 100,000 --------- --------- Net interest income after provision for loan.................................... 3,524,732 3,238,662 Other Income Income from fiduciary activities............. 449,850 434,850 Service charges on deposit accounts.......... 432,726 422,990 Other service charges, commissions and fees.. 200,190 121,930 Other operating income....................... 88,783 115,680 Security gains (losses)...................... 0 (707) Trading account income....................... 0 0 --------- --------- Total other income....................... 1,171,549 1,094,743 Other Expenses Salaries and employee benefits............... 1,843,527 1,874,845 Occupancy expense of Bank premises........... 218,767 212,181 Furniture and equipment expense.............. 290,978 273,604 Other operating expenses..................... 743,563 714,040 --------- --------- Total other expenses..................... 3,096,835 3,074,670 --------- --------- Income before taxes.......................... 1,599,446 1,258,735 Applicable income taxes ..................... 426,500 324,176 ---------- --------- Net income................................... $1,172,946 $934,559 Per Share Based on weighted average number of common shares outstanding.................. 2,566,185 2,550,514 Basic Earnings per Share $0.46 $0.37 Diluted Earnings per Share $0.45 $0.37 See accompanying notes 2 </TABLE>
<TABLE> <CAPTION> OLD POINT FINANCIAL CORPORATION Three Months Ended Consolidated Statements of Cash Flows March 31, (Unaudited) 1998 1997 ------------ ------------- CASH FLOWS FROM OPERATING ACTIVITIES <S> <C> <C> Net income................................................. $ 1,172,946 $ 934,559 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization............................ 238,834 239,158 Provision for loan losses................................ 150,000 100,000 (Gains) loss on sale of investment securities, net....... 0 707 Net amortization & accretion of securities available for sale................................................ 28,938 131,311 Net (increase) decrease in trading account............... 0 0 (Increase) in other real estate owned.................... (175,909) (215,000) (Increase) decrease in other assets (net of tax effect of FASB 115 adjustment)............. (446,595) (146,512) Increase (decrease) in other liabilities................. 738,419 490,540 ------------ ------------- Net cash provided by operating activities.............. 1,706,633 1,534,764 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of securities ................................. (31,359,451) (1,059,860) Proceeds from maturities & calls of securities .......... 12,043,000 2,594,000 Proceeds from sales of available - for - sale securities. 0 2,000,312 Proceeds from sales of held - to - maturity securities... 0 0 Loans made to customers.................................. (28,661,487) (23,816,444) Principal payments received on loans..................... 25,837,888 19,517,335 Proceeds from sales of other real estate owned........... 370,000 0 Purchases of premises and equipment...................... (1,167,296) (197,610) (Increase) decrease in federal funds sold................ (14,096,320) (12,339,020) ------------ ------------- Net cash provided by (used in) investing activities.... (37,033,666) (13,301,287) CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in non-interest bearing deposits..... 9,390,137 1,953,863 Increase (decrease) in savings deposits.................. 18,199,190 2,710,676 Proceeds from the sale of certificates of deposit........ 17,276,680 11,065,275 Payments for maturing certificates of deposit............ (9,757,966) (6,589,496) Increase (decrease) in federal funds purchased & repurchase agreements................................... (1,028,678) (707,499) Increase (decrease) in other borrowed money.............. (560,856) 1,730,748 Proceeds from issuance of common stock................... 21,750 142,100 Dividends paid........................................... (282,279) (255,052) ------------ ------------- Net cash provided by financing activities.............. 33,257,978 10,050,615 Net increase (decrease) in cash and due from banks..... (2,069,055) (1,715,909) Cash and due from banks at beginning of period......... 12,208,408 10,988,495 ------------ ------------- Cash and due from banks at end of period............... $ 10,139,353 $ 9,272,586 ============ ============= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash payments for: Interest............................................... $2,850,903 $2,479,767 Income taxes........................................... 0 0 See accompanying notes - 3 - </TABLE>
<TABLE> <CAPTION> OLD POINT FINANCIAL CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) Unrealized Common Stock Undivided Gain/(Loss) Shares Amount Surplus Profits On Securities Total - --------------------------------------------------------------------------------------------------------------------------------- FOR THREE MONTHS ENDED MARCH 31, 1998 <S> <C> <C> <C> <C> <C> <C> Balance at beginning of period............ 2,566,172 $12,830,860 $9,693,301 $13,097,716 $710,591 $36,332,468 Net income................................ 0 0 0 1,172,946 0 1,172,946 Sale of common stock...................... 1,200 6,000 37,800 (22,050) 0 21,750 Cash dividends............... ............ 0 0 0 (282,280) 0 (282,280) Increase in unrealized gain on securities 0 0 0 -- (103,058) (103,058) ----------- ------------ ------------ ------------ ----------- ----------- Balance at end of period.................. 2,567,372 $12,836,860 $9,731,101 $13,966,332 $607,533 $37,141,826 FOR THREE MONTHS ENDED MARCH 31, 1997 Balance at beginning of period............ 1,273,546 $6,367,730 $9,345,091 $16,638,880 $48,199 $32,399,900 Net income................................ 0 0 0 934,559 0 934,559 Sale of common stock...................... 7,400 37,000 270,100 (165,000) 0 142,100 Cash dividends............... ............ 0 0 0 (255,053) -- (255,053) Increase in unrealized gain on securities 0 0 0 0 (276,348) (276,348) ------------ ---------- -------------- ------------ ---------- ------------ Balance at end of period.................. 1,280,946 $6,404,730 $9,615,191 $17,153,386 ($228,149) $32,945,158 See accompanying notes -4- </TABLE>
OLD POINT FINANCIAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The accounting and reporting policies of the Registrant conform to generally accepted accounting principles and to the general practices within the banking industry. The interim financial statements have not been audited; however, in the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial statements have been included. These adjustments include estimated provisions for bonus, profit sharing and pension plans that are settled at year-end. These financial statements should be read in conjunction with the financial statements included in the Registrant's 1997 Annual Report to Shareholders and Form 10-K. 2. Basic earnings per common share outstanding are computed by dividing income by the weighted average number of outstanding common shares for each period presented. The assumed exercise of stock options is included in the calculation of diluted earnings per share. 5
<TABLE> <CAPTION> OLD POINT FINANCIAL CORPORATION Parent only Balance Sheets March 31, December 31 (Unaudited) 1998 1997 ---------- ---------- <S> Assets <C> <C> Cash in bank................................ $ 333,392 $ 289,230 Investment Securities....................... 1,872,933 1,877,175 Total Loans................................. 0 0 Investment in Subsidiary.................... 34,940,099 34,170,604 Other assets................................ 9,202 7,759 ---------- ---------- Total Assets................................ $37,155,626 $36,344,768 ========== ========== Liabilities and Stockholders' Equity Total Liabilities........................... $ 13,800 $ 12,300 Stockholders' Equity........................ 37,141,826 36,332,468 ---------- ---------- Total Liabilities & Stockholders' Equity.... $37,155,626 $36,344,768 ========== =========== <CAPTION> <S> OLD POINT FINANCIAL CORPORATION Three Months Ended: Parent only Income Statements March 31, (Unaudited) 1998 1997 ---------- ---------- Income <C> <C> Cash dividends from Subsidiary.............. $ 300,000 $ 250,000 Interest and fees on loans.................. 0 579 Interest income from investment securities.. 26,480 24,471 Gains (losses) from sale of investment securities...................... 0 0 Other income................................ 0 0 ---------- ---------- Total Income................................ 326,480 275,050 Expenses Salaries and employee benefits.............. 0 0 Other expenses.............................. 21,788 4,573 ---------- ---------- Total Expenses.............................. 21,788 4,573 Income before taxes & undistributed net income of subsidiary................ 304,692 270,477 Income tax.................................. 1,500 6,900 Net income before undistributed ---------- ---------- net income of subsidiary.................. 303,192 263,577 Undistributed net income of subisdiary...... 869,754 670,982 ---------- ---------- Net Income.................................. $ 1,172,946 $ 934,559 ========== ========== - 6 - </TABLE>
<TABLE> <CAPTION> OLD POINT FINANCIAL CORPORATION Three Months Ended: Parent only Statements of Cash Flows March 31, (Unaudited) 1998 1997 ---------- ---------- <S> Cash Flows from Operating Activities: <C> <C> Net Income.................................. $ 1,172,946 $ 934,559 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed income of subsidiary (869,754) (670,982) Depreciation.............................. 0 0 Gains(losses) on sale of securities(net) 0 0 (Increase) Decrease in other assets..... 0 52,614 Increase (decrease) in other liabilities 1,500 6,900 ---------- ---------- Net cash provided by operating activities... 304,692 323,091 Cash flows from investing activities: (Increase)decrease in investment securities. 0 (200,000) Sale of Assets.............................. 0 14,411 Repayment of loans by customers............. 0 49,884 ---------- ---------- Net cash provided by investing activities... 0 (135,705) Cash flows from financing activities: Proceeds from issuance of common stock...... 21,750 142,100 Dividends paid.............................. (282,280) (255,053) ---------- ---------- Net cash provided by financing activities... (260,530) (112,953) Net increase (decrease) in cash & due from banks.............................. 44,162 74,433 Cash & due from banks at beginning of period.. 289,230 142,683 ---------- ---------- Cash & due from banks at end of period......... $ 333,392 $ 217,116 - 7 - </TABLE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The following discussion is intended to assist readers in understanding and evaluating the consolidated results of operations and financial condition of the Company. This discussion should be read in conjunction with the financial statements and other financial information contained elsewhere in this report. The analysis attempts to identify trends and material changes which occurred during the period presented. EARNINGS SUMMARY Net income was $1.17 million, or $0.46 per share in the first quarter of 1998 compared to $935 thousand or $0.37 per share in the same period of 1997. Return on average assets was 1.32% in the first quarter of 1998, and 1.18% for the comparable period in 1997. Return on average equity was 12.65% in the first quarter of 1998 and 11.34% for the first three months of 1997. NET INTEREST INCOME The principal source of earnings for the Company is net interest income. Net interest income is the difference between interest and fees generated by earning assets and interest expense paid to fund them. Net interest income, on a tax equivalent basis, was $3.90 million for the first quarter of 1998, up $380 thousand, or 11% from $3.50 million in the same period of 1997. The net interest yield decreased from 4.71% in 1997 to 4.64% in 1998. Tax equivalent interest income increased $818 thousand, or 14%, in the first quarter of 1998 from the first quarter of 1997. Average earning assets grew $37.2 million, or 13% in the first quarter of 1998 compared to the first quarter of 1997. Comparing the first quarter of 1998 to 1997 total average loans increased $20.9 million, or 10%, while average investment securities increased $6.5 million, or 7%. Interest expense increased $437 thousand, or 18%, in the first quarter of 1998 from the first quarter of 1997 while interest bearing liabilities increased 12% during the same period. Certificates of deposit increased 15% and interest checking and savings accounts increased 8%. The cost of funding liabilities increased nineteen basis points due to the higher cost of federal funds purchased and securities sold under agreements to repurchase and payments on interest bearing deposit accounts. Page 11 shows an analysis of average earning assets, interest bearing liabilities and rates and yields. PROVISION/ALLOWANCE FOR LOAN LOSSES Provision for loan losses is a charge against earnings necessary to maintain the allowance for loan losses at a level consistent with management's evaluation of the loan portfolio. The provision for loan losses increased to $150,000 during the first quarter of 1998 compared with $100,000 for the same period in 1997. Loans charged off (net of recoveries) during in the first quarter of 1998 totaled $195 thousand compared to $49 thousand in 1997. A large portion of the charge offs was in the installment loans to individuals portfolio which is comprised of loans to individuals for personal expenditures such as household furniture and appliances and automobiles. The Company experienced a significant increase in personal bankruptcies leading to higher charge offs of indirect dealer loans. 8
The allowance for loan losses on March 31, 1998 was $2.63 million or 1.17% of loans at March 31, 1998 and $2.38 million or 1.17% of loans at March 31, 1997. As of March 31, 1998, nonperforming assets were $1.19 million, down from $1.86 million on March 31, 1997. Nonperforming assets consist of loans in nonaccrual status and other real estate. The 1998 total consisted of other real estate of $580 thousand and $612 thousand in nonaccrual loans. The other real estate consisted of $354 thousand in a commercial property originally acquired as a potential branch site and now held for sale and $226 thousand in foreclosed real estate. Nonaccrual loans consisted of $129 thousand in commercial loans and $388 thousand in mortgage loans and $95 thousand in installment loans. The Company continues to aggressively deal with these credits and specific action plans have been developed for each of these classified loans to address any deficiencies. OTHER INCOME Other income increased $76.8 thousand, or 7% during the first quarter of 1998 over the same period in 1997. Trust Services fees increased 3% and other service charge income increased by 7%. OTHER EXPENSES Other expenses increased $22 thousand or 1% during the first quarter of 1998 over 1997. Salaries and employee benefits decreased 2% due to a one time health insurance rebate. Occupancy expense increased $7 thousand, or 3% in 1997 primarily due to higher maintenance costs associated with repairs and remodeling of bank buildings. Furniture and Equipment expense increased $17 thousand or 6% due to equipment repairs and service contracts on new equipment purchases. Other operating expenses increased $30 thousand or 4%. This increase is due primarily to an increase in foreclosed property expense. ASSETS At March 31, 1998, the Company had total assets of $383.7 million, up 10% from $348.7 million at December 31, 1997. Total loans increased $2.6 million, or 1% and investment securities increased $19.1 million, or 20%, in 1998 from December 31, 1997. The Company expects to open a new facility early this summer which will be home to Old Point Commercial and Real Estate Services as well as the Trust and Financial Services Departments. The Company has also acquired property in Norge, VA on which a full service branch office will be built. This office is scheduled to be open in the fourth quarter of 1998. INTEREST BEARING LIABILITIES Total deposits increased $35.1 million, or 12% in 1998. During the first quarter of 1998 the Company began offering a premium money market account which accounted for $9.1 million of the increase in deposits. Interest bearing demand notes to the United States Treasury decreased $558 thousand, or 14%, while repurchase agreements, used as a cash management vehicle by commercial customers, decreased $1.0 million or 5%. CAPITAL RESOURCES The Company's capital position remains strong as evidenced by the regulatory capital measurements. At March 31, 1998 the Tier I capital ratio was 14.58%, the total capital ratio was 15.64% and the leverage ratio was 10.11%. These ratios were all well above the regulatory minimum levels of 4.00%, 8.00%, and 3.00%, respectively. 9
LIQUIDITY and INTEREST SENSITIVITY Liquidity is the ability of the Company to meet present and future obligations through the acquisition of additional liabilities or sale of existing assets. Management considers the liquidity of the Company to be adequate. Sufficient assets are maintained on a short-term basis to meet the liquidity demands anticipated by Management. In addition, secondary sources are available through the use of borrowed funds if the need should arise. The Company was liability sensitive as of March 31, 1998. There were $101.2 million more in liabilities than assets subject to repricing within three months. This generally indicates that net interest income should improve if interest rates fall since liabilities will reprice faster than assets. Conversely, if interest rates rise, net interest income should decline. It should be noted, however, that the savings deposits; which consist of interest checking, money market, and savings accounts; are less interest sensitive than other market driven deposits. In a rising rate environment these deposit rates have historically lagged behind the changes in earning asset rates, thus mitigating somewhat the impact from the liability sensitivity position. The table on page 12 reflects the earlier of the maturity or repricing data for various assets and liabilities as of March 31, 1998. EFFECTS OF INFLATION Management believes that the key to achieving satisfactory performance in an inflationary environment is its ability to maintain or improve its net interest margin and to generate additional fee income. The Company's policy of investing in and funding with interest-sensitive assets and liabilities is intended to reduce the risks inherent in a volatile inflationary economy. YEAR 2000 The "Year 2000" problem relates to the fact that many computer programs use two digits to define a year and assume that the century is 1900. Therefore, these programs will not recognize the turn of the century. For example, the year 1998 is defined as "98" and the year 2003 is defined as "03". Because the assumed century is 1900 computers recognize the year 2003, defined as "03", as 1903. The Company is aware of the Year 2000 problem and is taking action to ensure that all of its computer hardware and software will be Year 2000 compliant. The Company has a five-step plan to identify, correct, upgrade and test all of its hardware and software by the end of 1998. A Year 2000 project team has been assembled which meets on a monthly basis to monitor progress and address any new issues that might arise. The Company has identified and cataloged all of its hardware and software. Software and hardware that is not Year 2000 compliant is being identified and plans are being developed to upgrade and/or replace hardware and software that is not Year 2000 compliant. Additionally, the Company's vendors and major customers are being contacted to determine their Year 2000 efforts so that the Company can plan accordingly. Operating and capital budgets incorporate projected expenditures necessary to ensure that all systems are Year 2000 compliant. At this time management does not believe that related expenditures will have an adverse material effect on the Company. 10
<TABLE> <CAPTION> OLD POINT FINANCIAL CORPORATION NET INTEREST INCOME ANALYSIS For the quarter ended March 31, (Fully taxable equivalent basis)* 1998 1997 ----------------------------------------------------------------------------------------------------------------- Average Average Interest Rates Interest Rates Average Income/ Earned/ Average Income/ Earned/ Dollars in thousands Balance Expense Paid Balance Expense Paid ------------------------------------------------------------------------------------------------------------------ <S> <C> <C> <C> <C> <C> <C> Loans (net of unearned income)**.... $221,462 $ 4,941 8.92% $200,584 $4,428 8.83% Investment securities: Taxable........................... 72,872 1,124 6.17% 73,362 1,111 6.06% Tax-exempt........................ 27,364 565 8.26% 20,371 415 8.15% -------- -------- -------- ------ Total investment securities..... 100,236 1,689 6.74% 93,733 1,526 6.51% Federal funds sold.................. 13,001 182 5.60% 3,123 40 5.12% -------- -------- -------- ------ Total earning assets.............. $334,699 $6,812 8.14% $297,440 $5,994 8.06% Time and savings deposits: Interest-bearing transaction accounts......................... $20,035 $105 2.10% $25,920 $142 2.19% Money market deposit accounts..... 59,385 471 3.17% 46,287 358 3.09% Savings accounts.................. 26,066 176 2.70% 25,632 173 2.70% Certificates of deposit, $100,000 24,195 358 5.92% 16,923 230 5.44% Other certificates of deposit..... 114,840 1,557 5.42% 104,282 1,382 5.30% -------- -------- -------- ------ Total time and savings deposits. 244,522 2,667 4.36% 219,044 2,285 4.17% Federal funds purchased and securiti under agreement to repurchase..... 19,812 234 4.72% 16,121 185 4.59% Other short term borrowings......... 1,821 28 6.15% 1,687 22 5.22% -------- -------- -------- ------ Total interest bearing liabilities $266,155 2,929 4.40% $236,852 2,492 4.21% Net interest income/yield........... $3,883 4.64% $3,502 4.71% ======== ===== ====== ===== * Tax equivalent yields based on 34% tax rate. ** Nonaccrual loans are included in the average loan balances and income on such loans is recognized on a cash -11- </TABLE> <TABLE> <CAPTION> INTEREST SENSITIVITY ANALYSIS As of March 31, 1998 MATURITY (in thousands) Within 4-12 1-5 Over 5 3 Months Months Years Years Total ---------------------------------------------------------------------------------- Uses of funds <S> <C> <C> <C> <C> <C> Federal funds sold.............. 21,074 -- -- -- 21,074 Taxable investments............. 10,969 9,091 42,545 25,115 87,720 Tax-exempt investments.......... -- 371 1,349 26,217 27,937 -------- -------- -------- -------- -------- Total investments............. 32,043 9,462 43,894 51,332 136,731 Loans: Commercial.................... 18,653 1,395 26,514 2,135 48,697 Tax-exempt.................... 1,574 108 181 0 1,863 Installment................... 4,821 1,925 57,446 2,129 66,321 Real estate................... 20,345 12,042 59,292 15,064 106,743 Other......................... 332 -- 417 0 749 -------- -------- -------- -------- -------- Total loans..................... 45,725 15,470 143,850 19,328 224,373 -------- -------- -------- -------- -------- Total earning assets............ 77,768 24,932 187,744 70,660 361,104 Sources of funds Interest checking deposits...... 29,192 -- -- -- 29,192 Money market deposit accounts... 62,434 -- -- -- 62,434 Regular savings accounts........ 26,587 -- -- -- 26,587 Certificates of deposit......... $100,000 or more.............. 7,914 8,629 9,693 -- 26,236 Other time deposits............. 30,295 41,671 44,066 -- 116,032 Federal funds purchased and securities sold under agreements to repurchase...... 19,136 -- -- -- 19,136 Other borrowed money............ 3,442 -- 23 -- 3,465 -------- -------- -------- -------- -------- Total interest bearing liabilities.................... 179,000 50,300 53,782 0 283,082 Rate sensitivity GAP............ (101,232) (25,368) 133,962 70,660 78,022 Cumulative GAP.................. (101,232) (126,600) 7,362 78,022 -12- </TABLE>
PART II - OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) none (b) No Reports on Form 8-K were filed during the first quarter of 1998. 13
SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. OLD POINT FINANCIAL CORPORATION May 13, 1998 By: [S] Robert Shuford ____________________ Robert F. Shuford President and Director Principal Executive Officer By: [S] Louis G Morris ___________________ Louis G. Morris Senior Vice President and Treasurer Principal Financial and Accounting Officer 14