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
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