SECURITIES AND EXCHANGE COMMISSION 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 June 30, 1996 [ ] 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 (804) 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 July 15, 1996. Class Outstanding at July 15, 1996 Common Stock, $5.00 par value 1,273,537 shares OLD POINT FINANCIAL CORPORATION FORM 10-Q INDEX PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements 1 Consolidated Balance Sheets June 30, 1996 and December 31, 1995 1 Consolidated Statement of Earnings Three months ended June 30, 1996 and 1995 2 Six months ended June 30, 1996 and 1995 2 Consolidated Statement of Cash Flows Six months ended June 30, 1996 and 1995 3 Consolidated Statements of Changes in Stockholders' Equity Six months ended June 30, 1996 and 1995 4 Notes to Consolidated Financial Statements 5 Parent Only Balance Sheets June 30, 1996 and December 31, 1995 6 Parent Only Statement of Earnings Three months ended June 30, 1996 and 1995 6 Six months ended June 30, 1996 and 1995 6 Parent Only Statement of Cash Flows Three months ended June 30, 1996 and 1995 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) PART 1. - FINANCIAL INFORMATION <TABLE> OLD POINT FINANCIAL CORPORATION <CAPTION> Consolidated Balance Sheets June 30 December 31, (Unaudited) 1996 1995 Assets <S> <C> <C> Cash and due from banks........................ $ 10,860,902 $ 10,866,517 Interest bearing balances due from banks....... 16,476 65,028 Securities available for sale, at market....... 74,432,306 77,603,883 Securities to be held to maturity.............. 22,970,512 15,019,712 Trading account securities..................... -- -- Federal funds sold............................. 272,481 512,797 Loans, total (excluding unearned income)....... 193,883,054 188,055,509 Less reserve for loan losses............... 2,289,731 2,251,030 Net loans.............................. 191,593,323 185,804,479 Bank premises and equipment.................... 9,187,858 8,302,558 Other real estate owned........................ 707,170 953,647 Other assets................................... 5,559,446 5,137,401 Total assets.............................. $ 315,600,474 $ 304,266,022 Liabilities Noninterest-bearing deposits................... $ 47,883,127 $ 42,901,973 Savings deposits............................... 94,889,781 95,804,604 Time deposits.................................. 120,743,056 117,828,401 Total deposits.............................. 263,515,964 256,534,978 Federal funds purchased and securities sold under agreement to repurchase................ 15,832,817 15,736,474 Interest-bearing demand notes issued to the United States Treasury and other liabilities for borrowed money........................... 4,043,980 559,813 Other liabilities.............................. 1,351,899 1,106,840 Total liabilities........................... 284,744,660 273,938,105 Stockholders' Equity Common stock, $5.00 par value.................. 6,367,685 6,367,685 1996 1995 Shares authorized....6,000,000 6,000,000 Shares outstanding...1,273,537 1,273,537 Surplus........................................ 9,344,798 9,344,798 Undivided profits.............................. 15,394,126 14,085,650 Unrealized gain/(loss) on securities .......... (250,795) 529,784 Total stockholders' equity................. 30,855,814 30,327,917 Total liabilities and stockholders' equity. $ 315,600,474 $ 304,266,022 See accompanying notes </TABLE> <TABLE> <CAPTION> OLD POINT FINANCIAL CORPORATION Three Months Ended Six Months Ended Consolidated Statements of Earnings June 30, June 30, (Unaudited) 1996 1995 1996 1995 Interest Income <S> <C> <C> <C> <C> Interest and fees on loans..................... $ 4,395,781 $ 3,951,905 $ 8,594,844 $ 7,846,481 Interest on federal funds sold................. 81,918 66,076 122,794 107,519 Interest on securities: Taxable..................................... 1,187,664 1,149,589 2,371,187 2,248,406 Exempt from federal income tax.............. 204,830 102,473 384,767 205,835 Interest on trading account securities......... 0 0 0 0 Total interest on securities............. 1,392,494 1,252,062 2,755,954 2,454,241 Total interest income...................... 5,870,193 5,270,043 11,473,592 10,408,241 Interest Expense Interest on savings deposits................... 679,700 690,889 1,339,898 1,375,582 Interest on time deposits...................... 1,653,531 1,473,008 3,317,085 2,762,002 Interest on federal funds purchased and securities sold under agreement to repurchase.. 166,963 126,347 349,033 258,430 Interest on demand notes (note balances) issued to the United States Treasury and on other borrowed money............................... 17,861 20,813 39,485 48,161 Total interest expense..................... 2,518,055 2,311,057 5,045,501 4,444,175 Net interest income............................ 3,352,138 2,958,986 6,428,091 5,964,066 Provision for loan losses...................... 250,000 0 300,000 25,000 Net interest income after provision for loan losses................................... 3,102,138 2,958,986 6,128,091 5,939,066 Other Income Income from fiduciary activities............... 389,838 379,255 779,676 719,676 Service charges on deposit accounts............ 484,347 493,135 971,683 958,627 Other service charges, commissions and fees.... 95,285 51,494 172,949 96,741 Other operating income......................... 34,441 28,283 164,815 132,999 Income from trading account.................... 0 0 0 0 Security gains (losses)........................ (28) 0 (28) 0 Total other income......................... 1,003,883 952,167 2,089,095 1,908,043 Other Expenses Salaries and employee benefits................. 1,840,666 1,775,715 3,687,227 3,545,406 Occupancy expense of Bank premises............. 181,642 177,560 369,381 348,261 Furniture and equipment expense................ 250,156 222,199 497,472 456,542 Other operating expenses....................... 672,635 798,201 1,276,824 1,565,073 Total other expenses....................... 2,945,099 2,973,675 5,830,904 5,915,282 Income before taxes............................ 1,160,922 937,478 2,386,282 1,931,827 Applicable income taxes ....................... 322,674 266,800 670,274 526,800 Net income..................................... $ 838,248 $ 670,678 $ 1,716,008 $ 1,405,027 Per Share Based on weighted average number of common shares outstanding.................... 1,273,537 1,273,537 1,273,537 1,270,936 Net income..................................... $ 0.66 $ 0.53 $ 1.35 $ 1.11 See accompanying notes </TABLE> <TABLE> <CAPTION> OLD POINT FINANCIAL CORPORATION Six Months Ended Consolidated Statements of Cash Flows June 30, (Unaudited) 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES <S> <C> <C> Net income................................................ $ 1,716,008 $ 1,405,027 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization........................... 427,606 365,966 Provision for loan losses............................... 300,000 25,000 (Gains) losses on sale of investment securities, net.... 28 0 Net amortization & accretion of securities.............. 389,657 591,176 Net (increase) decrease in trading account.............. 0 0 Increase in other real estate owned..................... 0 (443,864) (Increase) decrease in other assets (net of tax effect of FASB 115 adjustment)............ (19,929) (245,103) Increase (decrease) in other liabilities................ 245,059 313,731 Net cash provided by operating activities............. 3,058,428 2,011,933 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of securities ................................ (22,601,603) (9,268,464) Proceeds from maturities & calls of securities ......... 16,250,000 7,400,000 Proceeds from sales of securities....................... 0 0 Loans made to customers................................. (45,111,339) (10,470,073) Principal payments received on loans.................... 39,022,495 3,989,943 Proceeds from sales of other real estate owned.......... 246,477 28,700 Purchases of premises and equipment..................... (1,312,906) (531,231) (Increase) decrease in federal funds sold............... 240,316 (10,024,866) Net cash provided by (used in) investing activities... (13,266,559) (18,875,991) CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in non-interest bearing deposits.... 4,981,154 7,422,290 Increase (decrease) in savings deposits................. (914,823) (591,911) Proceeds from the sale of certificates of deposit....... 24,170,548 37,775,818 Payments for maturing certificates of deposit........... (21,255,893) (26,877,947) Increase (decrease) in federal funds purchased & repurchase agreements.................................. 96,343 (2,587,564) Increase (decrease) in other borrowed money............. 3,484,167 2,898,192 Proceeds from issuance of common stock.................. 0 88,195 Dividends paid.......................................... (407,533) (382,060) Net cash provided by financing activities............. 10,153,963 17,745,013 Net increase (decrease) in cash and due from banks.... (54,167) 880,955 Cash and due from banks at beginning of period........ 10,931,545 8,940,712 Cash and due from banks at end of period.............. $ 10,877,378 $ 9,821,667 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash payments for: Interest.............................................. 4,995,256 4,285,987 Income taxes.......................................... 700,000 480,000 See accompanying notes </TABLE> <TABLE> OLD POINT FINANCIAL CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) <CAPTION> <S> <C> <C> <C> <C> <C> Unrealized Undivided Gain/(Loss) Common Stock Surplus Profits On Securities Total FOR SIX MONTHS ENDED JUNE 30, 1996 Balance at beginning of period.......... 6,367,685 9,344,798 14,085,650 529,784 30,327,917 Net income.............................. -- -- 1,716,008 -- 1,716,008 Sale of common stock.................... -- -- -- -- -- Cash dividends.......................... -- -- (407,532) -- (407,532) Increase in unrealized gain on securities............................ -- -- -- (780,579) (780,579) Balance at end of period................ $6,367,685 $9,344,798 $15,394,126 ($250,795) $30,855,814 FOR SIX MONTHS ENDED JUNE 30, 1995 Balance at beginning of period.......... 6,319,515 9,031,923 12,793,050 (1,923,349) 26,221,139 Net income.............................. -- -- 1,405,027 -- 1,405,027 Sale of common stock.................... 48,170 312,875 (272,850) -- 88,195 Cash dividends.......................... -- -- (382,061) -- (382,061) Increase in unrealized gain on securities............................ -- -- -- 1,916,541 1,916,541 Balance at end of period................ $6,367,685 $9,344,798 $13,543,166 ($6,808) $29,248,841 See accompanying notes </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 1995 Annual Report to Shareholders and Form 10-K. 2. Earnings per common share outstanding are computed by dividing income by the weighted average number of outstanding common shares for each period presented. <TABLE> OLD POINT FINANCIAL CORPORATION <CAPTION> Parent only Balance Sheets June 30, December 31, (Unaudited) 1996 1995 Assets <S> <C> <C> Cash in bank........................................... $ 188,523 $ 122,263 Investment Securities.................................. 1,663,035 1,670,105 Total Loans............................................ 51,069 51,832 Investment in Subsidiary............................... 28,893,911 28,395,784 Equipment.............................................. 16,187 17,963 Other assets........................................... 43,089 69,970 Total Assets........................................... $ 30,855,814 $ 30,327,917 Liabilities and Stockholders' Equity Total Liabilities...................................... $ 0 $ 0 Stockholders' Equity................................... 30,855,814 30,327,917 Total Liabilities & Stockholders' Equity............... $ 30,855,814 $ 30,327,917 </TABLE> <TABLE> <CAPTION> OLD POINT FINANCIAL CORPORATION Three Months Ended: Six Months Ended: Parent only Income Statements June 30, June 30, (Unaudited) 1996 1995 1996 1995 Income <S> <C> <C> <C> <C> Cash dividends from Subsidiary......................... $ 250,000 $ 250,000 $ 500,000 $ 500,000 Interest and fees on loans............................. 1,082 1,132 2,179 2,276 Interest income from investment securities............. 26,232 25,251 46,821 46,432 Gains (losses) from sale of investment securities...... 0 0 0 0 Other income........................................... 0 0 0 0 Total Income........................................... 277,314 276,383 549,000 548,708 Expenses Salaries and employee benefits......................... 49,339 48,918 99,548 104,946 Other expenses......................................... 26,086 16,519 37,284 26,653 Total Expenses......................................... 75,425 65,437 136,832 131,599 Income before taxes & undistributed net income of subsidiary........................... 201,889 210,946 412,168 417,109 Income tax............................................. (17,400) (13,200) (29,800) (28,200) Net income before undistributed net income of subsidiary............................. 219,289 224,146 441,968 445,309 Undistributed net income of subisdiary................. 618,959 446,532 1,274,040 959,718 Net Income............................................. $ 838,248 $ 670,678 $ 1,716,008 $ 1,405,027 </TABLE> <TABLE> <CAPTION> OLD POINT FINANCIAL CORPORATION Six Months Ended: Parent only Statements of Cash Flows June 30, (Unaudited) 1996 1995 Cash Flows from Operating Activities: <S> <C> <C> Net Income............................................. $ 1,716,008 $ 1,405,027 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed income of subsidiary....... (1,274,040) (959,718) Depreciation......................................... 1,776 1,184 Gains(losses) on sale of securities [net].......... 0 0 (Increase) Decrease in other assets................ 29,285 (11,918) Increase (decrease in other liabilities)........... 0 0 Net cash provided by operating activities.............. 473,029 434,575 Cash flows from investing activities: (Increase)decrease in investment securities............ 0 (172,364) Purchase of equipment.................................. 0 (20,923) Repayment of loans by customers........................ 763 1,052 Net cash provided by investing activities.............. 763 (192,235) Cash flows from financing activities: Proceeds from issuance of common stock................. 0 88,195 Dividends paid......................................... (407,532) (382,061) Net cash provided by financing activities.............. (407,532) (293,866) Net increase (decrease) in cash & due from banks....... 66,260 (51,526) Cash & due from banks at beginning of period........... 122,263 154,143 Cash & due from banks at end of period................. $ 188,523 $ 102,617 </TABLE> Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Summary Net income for the second quarter of 1996 increased 25% to $838,248 from $670,678 for the comparable period in 1995. Earnings per share were $0.66 in the second quarter of 1996 compared with $0.53 in 1995. For the six months ended June 30, 1996 net income increased 22% to $1,716,008 from $1,405,027 in 1995. Earnings per share were $1.35 for the first six months of 1996 compared with $1.11 in 1995. Return on average assets was 1.07% for the second quarter of 1996 and 0.94% for the comparable period in 1995. Return on average equity was 10.89% for the second quarter of 1996 and 9.28% for the second quarter of 1995. For the six months ended June 30, 1996 and 1995 return on average assets was 1.11% and 0.99% respectively. Return on average equity was 11.16% in 1996 and 10.01% in 1995. Net Interest Income Net interest income, on a fully tax equivalent basis, increased $424 thousand, or 14%, for the second quarter of 1996 over 1995. Average earning assets increased 11% and the net interest yield, defined as the ratio of net interest income on a fully tax equivalent basis to total earning assets, increased from 4.55% in 1995 to 4.67% in 1996. For the six months ended June 30, 1996 net interest income increased $523 thousand, or 8%, over the comparable period in 1995. Average earning assets increased 10% and the net interest yield decreased from 4.67% in 1995 to 4.62% in 1996. Due to the growth in certificates of deposit which have higher yields than other deposits the net interest yield was negatively impacted in 1996. However, the net interest margin trend in the second quarter 1996 is favorable due to the collection on certain nonperforming loans. Net interest income continues to be negatively impacted by nonperforming loans. The level of nonperforming loans is expected to continue to depress the net interest yield through the remainder of 1996. Page 9 shows an analysis of average earning assets, interest bearing liabilities and rates and yields. <TABLE> OLD POINT FINANCIAL CORPORATION <CAPTION> NET INTEREST INCOME ANALYSIS For the quarter ended June 30, (Fully taxable equivalent basis) <F1> 1996 1995 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)<F2>..................... $192,178 $4,421 9.20% $176,086 $3,997 9.08% Investment securities: Taxable.............................................. $85,302 1,188 5.57% $79,169 1,150 5.81% Tax-exempt........................................... $14,648 310 8.47% $9,217 157 6.81% Total investment securities........................ 99,950 1,498 5.99% 88,386 1,307 5.91% Federal funds sold..................................... $5,896 82 5.56% $4,489 66 5.88% Total earning assets................................. $298,024 $6,001 8.05% $268,961 $5,370 7.99% Time and savings deposits: Interest-bearing transaction accounts................ $50,788 $305 2.40% $48,701 $320 2.63% Money market deposit accounts........................ 20,884 194 3.72% 19,036 188 3.95% Savings accounts..................................... 26,517 181 2.73% 26,778 183 2.73% Certificates of deposit, $100,000 or more............ 17,494 239 5.46% 13,069 178 5.45% Other certificates of deposit........................ 103,408 1,414 5.47% 96,115 1,295 5.39% Total time and savings deposits.................... 219,091 2,333 4.26% 203,699 2,164 4.25% Federal funds purchased and securities sold under agreement to repurchase........................ 14,888 167 4.49% 10,201 126 4.94% Other short term borrowings............................ 1,579 18 4.56% 1,938 21 4.33% Total interest bearing liabilities................... $235,558 2,518 4.28% $215,838 2,311 4.28% Net interest income/yield.............................. $3,483 4.67% $3,059 4.55% For the six months ended June 30, 1996 1995 Average Average Interest Rates Interest Rates Average Income/ Earned/ Average Income/ Earned/ Dollars in thousands Balance Expense Paid Balance Expense Paid Loans (net of unearned income)**....................... $190,767 $8,647 9.07% $177,132 $7,932 8.96% Investment securities: Taxable.............................................. 79,782 2,371 5.94% 74,900 2,248 6.00% Tax-exempt........................................... 13,622 583 8.56% 7,946 312 7.85% Total investment securities........................ 93,404 2,954 6.33% 82,846 2,560 6.18% Federal funds sold..................................... 4,680 123 5.26% 3,715 108 5.81% Total earning assets................................. $288,851 $11,724 8.12% $263,693 $10,600 8.04% Time and savings deposits: Interest-bearing transaction accounts................ $50,123 $603 2.41% $48,864 $639 2.62% Money market deposit accounts........................ 20,206 373 3.69% 18,877 368 3.90% Savings accounts..................................... 26,818 364 2.71% 27,051 368 2.72% Certificates of deposit, $100,000 or more............ 16,763 458 5.46% 12,709 334 5.26% Other certificates of deposit........................ 103,298 2,859 5.54% 93,725 2,429 5.18% Total time and savings deposits.................... 217,208 4,657 4.29% 201,226 4,138 4.11% Federal funds purchased and securities sold under agreement to repurchase........................ 14,910 349 4.68% 10,683 258 4.83% Other short term borrowings............................ 1,499 39 5.20% 1,982 48 4.84% Total interest bearing liabilities................... $233,617 5,045 4.32% $213,891 4,444 4.16% Net interest income/yield.............................. $6,679 4.62% $6,156 4.67% <FN> <F1> Tax equivalent yields based on 34% tax rate. <F2> Nonaccrual loans are included in the average loan balances and income on such loans is recognized on a cash basis. </FN> </TABLE> Provision/Allowance for Loan Losses The provision for loan losses was $300,000 for the first six months of 1996, up significantly over the comparable period in 1995 due to continued growth in the loan portfolio coupled with a higher level of charged off loans. Loans charged off (net of recoveries) were $261,299 in the first six months of 1996, compared with recoveries (net of charge-offs) of $53,775 for the same period in 1995. On an annualized basis net loan charge- offs were 0.27% of total loans for the first half of 1996 compared with (0.06%) for the same period in 1995. On June 30, 1996 nonperforming assets totalled $2.5 million compared with $3.2 million on June 30, 1995. The June 1996 total consisted of $353 thousand in foreclosed real estate, $354 thousand in a former branch site now listed for sale, and $1.8 million in nonaccrual loans. The June 1995 total consisted of $275 thousand in foreclosed real estate, $354 thousand in the former branch site, and $2.6 million in nonaccrual loans. Loans still accruing interest but past due 90 days or more decreased to $249 thousand as of June 30, 1996 compared with $880 thousand on June 30, 1995. The allowance for loan losses on June 30, 1996 was $2.3 million. It represented a multiple of 0.93 times nonperforming assets and 1.30 times nonperforming loans. The allowance for loan losses on June 30, 1996 was 1.18% of loans compared to 1.51% at June 30, 1995. Other Income Other income increased $51,716, or 5%, for the second quarter of 1996 over the same period in 1995. Income from service charges, commissions, and fees increased 85% over the same period in 1995 due to increased mortgage brokerage, merchant credit card processing, and debit card income. For the six months ended June 30, 1996 other income increased $181,052 or 9% from 1995. The higher income in 1995 was primarily a result of increases in mortgage brokerage, merchant processing and debit card income as stated above. Other Expenses Other expenses decreased $28,576, or 1%, in the second quarter of 1996 over 1995. Salaries and employees benefits increased 4% due to normal increases in pay. Furniture and equipment expense increased $27,957, or 13%, due to higher depreciation on computer equipment. This increase was offset by a decrease of $125,566, or 16%, in operating expenses, primarily due to lower FDIC insurance premiums. For the six months ended June 30, 1996 other expenses decreased $84,378 or 1%, from 1995, primarily due to the lower FDIC insurance premiums. The Company has received approval from the Office of the Comptroller of the Currency to open a new branch near the intersection of Kiln Creek Parkway and Victory Boulevard. The branch opening is scheduled for August 1996. Financial Condition At June 30, 1996 total assets were $315.6 million, up 4% from $304.3 million at December 31, 1995. Total loans grew $6.0 million, or 3% and investment securities and federal funds sold grew $4.5 million, or 5%, in 1996. Total deposits increased $7.0 million, or 3% in 1996 and demand note balances to the U. S. Treasury increased $3.5 million to $4.0 million from $560 thousand at year end 1995. Capital Resources The Company's capital position remains strong as evidenced by the regulatory capital measurements. At June 30, 1996 the Tier I capital ratio was 15.1%, the total capital ratio was 16.2% and the leverage ratio was 9.8%. These ratios were all well above the regulatory minimum levels of 4.00%, 8.00%, and 3.00%, respectively. Liquidity and Interest Sensitivity Liquidity is the ability of the Company to meet present and future obligations to depositors and borrowers. As loan demand increases, liquidity will be provided by liquidation of short term investment securities as well as other means of financing such as purchase of federal funds and demand note to the US Treasury. The Company was liability sensitive as of June 30, 1996. There were $80.8 million more in liabilities than assets subject to repricing within three months. 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 June 30, 1996. <TABLE> INTEREST SENSITIVITY ANALYSIS <CAPTION> As of June 30, 1996 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.............. 272 -- -- -- 272 Taxable investments............. 9,264 11,091 53,618 6,903 80,876 Tax-exempt investments.......... 199 100 2,125 14,103 16,527 Total investments............. 9,735 11,191 55,743 21,006 97,675 Loans: Commercial.................... 35,698 6,046 14,986 655 57,385 Tax-exempt.................... 2,324 59 208 176 2,767 Installment................... 4,184 11,470 33,070 1,794 50,518 Real estate................... 19,272 20,453 35,052 8,133 82,910 Other......................... 63 240 -- -- 303 Total loans..................... 61,541 38,268 83,316 10,758 193,883 Total earning assets............ 71,276 49,459 139,059 31,764 291,558 Sources of funds Interest checking deposits...... 47,915 -- -- -- 47,915 Money market deposit accounts... 20,644 -- -- -- 20,644 Regular savings accounts........ 26,331 -- -- -- 26,331 Certificates of deposit......... $100,000 or more.............. 6,826 6,325 4,659 -- 17,810 Other time deposits............. 30,575 38,363 33,996 -- 102,934 Federal funds purchased and securities sold under agreements to repurchase...... 15,833 -- -- -- 15,833 Other borrowed money............ 4,000 -- 44 -- 4,044 Total interest bearing liabilities................... 152,124 44,688 38,699 0 235,511 Rate sensitivity GAP............ (80,848) 4,771 100,360 31,764 56,047 Cumulative GAP.................. (80,848) (76,077) 24,283 56,047 </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 second quarter of 1996. 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 July 15, 1996 By: /s/Robert F. Shuford President and Director Principal Executive Officer By: /s/Louis G. Morris Senior Vice President and Treasurer Principal Financial and Accounting Officer