U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (fee required)
For the fiscal year ended December 31, 1995
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (no fee required)
For the transition period from to
Commission File No. 0-12896
OLD POINT FINANCIAL CORPORATION
(Name of issuer in its charter)
Virginia 54-1265373
(State or other jurisdiction of incorporation or
organization)(I.R.S. Employer Identification No.)
1 West Mellen Street, Hampton, Va. 23663
(Address of principal executive offices) (Zip Code)
(804) 722-7451
(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Exchange
Act: None
Securities registered pursuant to Section 12(g) of the Exchange
Act:
Common Stock ($5.00 par value)
(Title of class)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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 ___
Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B contained in this form, and
no disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of March 14, 1996 there were 1,273,537 shares of common
stock outstanding and the aggregate market value of common stock of
Old Point Financial Corporation held by nonaffiliates was
approximately $36,465,300 based upon the last traded price per
share known to Management.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
OLD POINT FINANCIAL CORPORATION
Form 10-K
INDEX
Page
PART I
Item 1. Description of Business 1
General 1
Statistical Information. 2
Item 2. Description of Properties 12
Item 3. Legal Proceedings 12
Item 4. Submission of Matters to a
Vote of Security Holders 13
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters 13
Item 6. Selected Financial Data 14
Item 7. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 15
Item 8. Financial Statements and
Supplementary Data 19
Item 9. Changes in and Disagreements
With Accountants on
Accounting and Financial Disclosure 36
PART III
Item 10. Directors and Executive Officers
of the Registrant 37
Item 11. Executive Compensation 39
Item 12. Security Ownership of Certain
Beneficial Owners and Management 40
Item 13. Certain Relationships and
Related Transactions 40
PART IV
Item 14. Exhibits, Financial Statement
Schedules and Reports on Form 8-K 41
-i-
PART I
Item 1. Description of Business
General
Old Point Financial Corporation (the "Company") was incorporated
under the laws of Virginia on February 16, 1984, for the purpose of
acquiring all the outstanding common stock of The Old Point
National Bank of Phoebus (the "Bank"), in connection with the
reorganization of the Bank into a one bank holding company
structure. At the annual meeting of the stockholders on March 27,
1984, the proposed reorganization was approved by the requisite
stockholder vote. At the effective date of the reorganization on
October 1, 1984, the Bank merged into a newly formed national bank
as a wholly owned subsidiary of the Company, with each outstanding
share of common stock of the Bank being converted into five shares
of common stock of the Company.
The Company has no other subsidiaries and does not engage in any
activities other than acting as a holding company for the common
stock of the Bank. The principal business of the Company is
conducted through the Bank, which continues to conduct its business
in substantially the same manner and from the same offices as it
had done before the effective date of the reorganization. The
Bank, therefore, accounts for substantially all of the consolidated
assets and revenues of the Company.
The Bank is a national banking association founded in 1922. The
Bank has thirteen offices in the cities of Hampton and Newport
News, and in James City County, Virginia, and provides a full range
of banking and related financial services, including checking,
savings, certificates of deposit, and other depository services,
commercial, industrial, residential real estate and consumer loan
services, safekeeping services and trust and estate services.
As of December 31, 1995, the Company had assets of $304.3 million,
loans (net of unearned income) of $188.1 million, deposits of
$256.5 million, and stockholders' equity of $30.3 million. At year
end, the Company and the Bank had a total of 226 employees, 33 of
whom were part-time.
Based on 1990 census figures, the population of the Bank's trade
area, which includes Hampton, Newport News, Williamsburg, and James
City County was approximately 350,000. This area's economy is
heavily influenced by the two largest employers; military
installations and shipbuilding and ship repair. These industries
are impacted by reductions in defense spending and personnel. Some
of our customers are either employed at the various military
installations or at the shipyard, or they derive some or all of
their business from these two major employers. There are numerous
military installations in the area including Fort Monroe, Langley
Air Force Base, and Fort Eustis. The consolidation of the Tactical
Air Command and the Strategic Air Command into the Air Combat
Command at Langley has somewhat mitigated the reduction in military
employment in the area. The largest private employer on the
Peninsula is the Newport News Shipbuilding and Drydock Company,
which currently employees approximately 17,000 people.
The banking industry is highly competitive in the Hampton/Newport
News/Williamsburg area. There are approximately nine commercial
banks actively engaged in business in the area in which the Bank
operates, including seven major statewide banking organizations.
The Bank encounters competition for deposits and loans from banks,
savings and loan associations and credit unions in the communities
in which it operates. In addition, the Bank must compete for
deposits in some instances with the money market mutual funds which
are marketed nationally.
The Bank is subject to regulation and examination by the Office of
the Comptroller of the Currency, the Federal Reserve Board (the
"Board"), and the Federal Deposit Insurance Corporation (the
"FDIC").
As a bank holding company within the meaning of the Bank Holding
Company Act of 1956, the Company is subject to the ongoing
regulation, supervision, and examination by the Federal Reserve
Board (the "Board"). The Company is required to file with the
Board periodic and annual reports and other information concerning
its own business operations and those of its subsidiaries. In
addition, prior Board approval must be obtained before the Company
can acquire (i) ownership or control of any voting shares of
another bank if, after such acquisition, it would control more than
5% of such shares, or (ii) all or substantially all of the assets
of another bank or merge or consolidate with another bank holding
company. A bank holding company is prohibited under the Bank
Holding Company Act, with limited exceptions, from engaging in
activities other than those of banking or of managing or
controlling banks or furnishing services to its subsidiaries.
Statistical Information
The following statistical information is furnished pursuant to the
requirements of Guide 3 (Statistical Disclosure by Bank Holding
Companies) promulgated under the Securities Act of 1933.
I. Distribution of Assets, Liabilities and Shareholders' Equity;
Interest Rates and Interest Differential
The following table presents the distribution of assets, liabilities,
and shareholders' equity by major categories with related average
yields/rates. In these balance sheets, nonaccrual loans are included in
the daily average loans outstanding.
<TABLE>
TABLE I
AVERAGE BALANCE SHEETS, NET INTEREST INCOME* AND RATES*<F1>
<CAPTION>
For the years ended December 31, 1995 1994 1993
Dollars in thousands Average Average Average
Interest Rates Interest Rates Interest Rates
Average Income/ Earned/ Average Income/ Earned/ Average Income/ Earned/
Balance Expense Paid Balance Expense Paid Balance Expense Paid
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans (net of unearned income)............... 180,638 16,221 8.98% 162,963 13,917 8.54% 155,551 13,679 8.79%
Investment securities:
Taxable.................................... 78,411 4,690 5.98% 86,038 4,932 5.73% 78,420 4,855 6.19%
Tax-exempt................................. 8,173 759 9.29% 6,315 628 9.94% 8,235 793 9.63%
------- ------- ------- ------- ------- -------
Total investment securities.............. 86,584 5,449 6.29% 92,353 5,560 6.02% 86,655 5,648 6.52%
Federal funds sold........................... 4,666 264 5.66% 3,540 131 3.70% 7,634 229 3.00%
------- ------- ------- ------- ------- -------
Total earning assets....................... 271,888 21,934 8.07% 258,856 19,608 7.57% 249,840 19,556 7.83%
Reserve for loan losses...................... (2,648) (2,759) (3,298)
------- ------- -------
269,240 256,097 246,542
Cash and due from banks...................... 8,433 8,868 8,991
Bank premises and equipment.................. 8,125 8,275 9,672
Other assets................................. 5,376 5,158 5,480
------- ------- -------
Total assets.................................$291,174 $278,398 $270,685
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Time and savings deposits:
Interest-bearing transaction accounts...... 49,335 $1,303 2.64% 50,739 $1,327 2.62% 43,406 $1,217 2.80%
Money market deposit accounts.............. 19,375 765 3.95% 19,526 613 3.14% 19,797 568 2.87%
Passbook savings accounts.................. 26,595 730 2.74% 30,070 826 2.75% 29,203 926 3.17%
Certificates of deposit, $100,000 or more.. 13,789 760 5.51% 10,979 478 4.35% 10,217 458 4.48%
Other certificates of deposit.............. 97,431 5,290 5.43% 83,512 3,850 4.61% 85,029 4,127 4.85%
------- ------- ------- ------- ------- -------
Total time and savings deposits.......... 206,525 8,848 4.28% 194,826 7,094 3.64% 187,652 7,296 3.89%
Federal funds purchased and securities sold
under agreement to repurchase.............. 11,234 573 5.10% 14,528 503 3.46% 15,396 437 2.84%
Other short term borrowings.................. 1,996 110 5.51% 617 28 4.54% 123 9 7.32%
------- ------- ------- ------- ------- -------
Total interest bearing liabilities......... 219,755 9,531 4.34% 209,971 7,625 3.63% 203,171 7,742 3.81%
Demand deposits.............................. 40,843 40,004 40,870
Other liabilities............................ 1,554 1,729 1,747
------- ------- -------
Total liabilities.......................... 262,152 251,704 245,788
Stockholders' equity......................... 29,022 26,694 24,897
------- ------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY...$291,174 $278,398 $270,685
======= ======= =======
Net interest income/yield.................... $12,403 4.56% $11,983 4.63% $11,814 4.73%
===== ===== =====
Total deposits...............................$247,368 $234,830 $228,522
<FN>
<F1>
* Computed on a fully taxable equivalent basis using a 34% rate
</FN>
</TABLE>
The following table sets forth a summary of changes in interest earned
and paid attributable to changes in volume and changes in yields/rates.
<TABLE>
TABLE II
ANALYSIS OF CHANGE IN NET INTEREST INCOME*<F1>
<CAPTION>
Dollars in thousands Year 1995 over 1994 Year 1994 over 1993 Year 1993 over 1992
Due to change in: Net Due to change in: Net Due to change in: Net
Average Average Increase Average Average Increase Average Average Increase
Volume Rate (Decrease) Volume Rate (Decrease) Volume Rate (Decrease)
INCOME FROM EARNING ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans...................................... $1,509 $795 $2,304 $652 ($414) $238 ($1,655) ($928) ($2,583)
Investment securities:
Taxable.................................. ($437) $195 (242) $472 ($395) 77 $1,214 ($410) 804
Tax-exempt............................... $185 ($54) 131 ($185) $20 (165) ($201) ($50) (251)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total investment securities............ (252) 141 (111) 287 (375) (88) 1,013 (460) 553
Federal funds sold......................... $42 $91 133 ($123) $25 (98) $45 ($39) 6
------ ------ ------ ------ ------ ------ ------ ------ ------
Total income from earning assets......... 1,299 1,027 2,326 816 (764) 52 (597) (1,427) (2,024)
INTEREST EXPENSE
Time and savings deposits:
Interest-bearing transaction accounts.... ($37) $13 (24) $206 ($96) 110 $180 ($235) (55)
Money market deposit accounts............ ($5) $157 152 ($8) $53 45 ($9) ($120) (129)
Passbook savings accounts................ ($95) ($1) (96) $27 ($127) (100) $274 ($146) 128
Certificates of deposit, $100,000 or more $122 $160 282 $34 ($14) 20 ($180) ($106) (286)
Other certificates of deposit............ $642 $798 1,440 ($74) ($203) (277) ($825) ($1,018) (1,843)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total time and savings deposits........ 627 1,127 1,754 185 (387) (202) (560) (1,625) (2,185)
Federal funds purchased and securities sold
under agreement to repurchase............ ($114) $184 70 ($25) $91 66 $35 ($100) (65)
Other short term borrowings................ $63 $19 82 $36 ($17) 19 ($9) $2 (7)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total interest bearing liabilities....... 576 1,330 1,906 196 (313) (117) (534) (1,723) (2,257)
CHANGE IN NET INTEREST INCOME.............. $723 ($303) $420 $620 ($451) $169 ($63) $296 $233
===============================================================================================================================
<FN>
<F1>
* Computed on a fully taxable equivalent basis (using a 34% rate)
</FN>
</TABLE>
Interest Sensitivity
The following table reflects the earlier of the maturity or
repricing data for various assets and liabilities as of December
31, 1995.
<TABLE>
TABLE III
INTEREST SENSITIVITY ANALYSIS
AS OF DECEMBER 31, 1995
DOLLARS IN THOUSANDS
<CAPTION>
MATURITY
WITHIN 4-12 1-5 OVER
USES OF FUNDS 3 MONTHS MONTHS YEARS 5 YEARS TOTAL
<S> <C> <C> <C> <C> <C>
FEDERAL FUNDS SOLD 513 -- -- -- 513
TAXABLE INVESTMENTS 11,224 13,205 45,478 10,003 79,910
TAX-EXEMPT INVESTMENTS 250 201 1,467 10,795 12,713
------ ------ ------ ------ ------
TOTAL INVESTMENTS 11,987 13,406 46,945 20,798 93,136
LOANS:
COMMERCIAL 29,852 3,640 18,438 904 52,834
TAX-EXEMPT 1,988 10 140 865 3,003
INSTALLMENT 65 1,361 45,314 2,513 49,253
REAL ESTATE 11,683 4,566 56,158 10,093 82,500
OTHER 465 -- -- -- 465
------ ------ ------ ------ ------
TOTAL LOANS 44,053 9,577 120,050 14,375 188,055
------ ------ ------ ------ ------
TOTAL EARNING ASSETS 56,040 22,983 166,995 35,173 281,191
SOURCES OF FUNDS
INTEREST CHECKING DEPOSITS 50,371 -- -- -- 50,371
MONEY MARKET DEPOSIT ACCOUNTS 19,268 -- -- -- 19,268
REGULAR SAVINGS ACCOUNTS 26,166 -- -- -- 26,166
CERTIFICATES OF DEPOSIT, $100,000 OR MORE 3,392 9,215 2,629 -- 15,236
OTHER TIME DEPOSITS 20,436 51,060 31,058 38 102,592
FEDERAL FUNDS PURCHASED AND SECURITIES
SOLD UNDER AGREEMENTS TO REPURCHASE 14,884 852 -- -- 15,736
OTHER BORROWINGS 507 -- 53 -- 560
------ ------ ------ ------ ------
TOTAL INTEREST BEARING LIABILITIES 135,024 61,127 33,740 38 229,929
RATE SENSITIVITY GAP (78,984) (38,144) 133,255 35,135 51,262
CUMULATIVE GAP (78,984)(117,128) 16,127 51,262
</TABLE>
The Company was liability sensitive as of December 31, 1995. There were
$80.0 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. It should be noted, however, that savings deposits;
which consist of interest bearing transactions accounts, money market
accounts, 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.
II. Investment Portfolio
Note 2 of the Notes to Financial Statements found in Item 8.
Financial Statements and Supplementary Data of this Report on Form
10K presents the book and market value of investment securities on
the dates indicated.
The following table shows, by type and maturity, the book value and
weighted average yields of investment securities at December 31,
1995.
<TABLE>
TABLE IV
INVESTMENT SECURITY MATURITIES & YIELDS*<F1>
<CAPTION>
U.S.Govt/Agency State/Municipal Total
Book Weighted Book Weighted Book Weighted
Value Average Value Average Value Average
Dollars in Thousands Yield Yield Yield
<S> <C> <C> <C> <C> <C> <C>
December 31, 1995
Maturities: $19,155 6.02% $548 10.69% $19,703 6.15%
Within 1 year 45,085 5.74% 1,336 9.60% 46,421 5.85%
After 1 year, but within 5 years 9,998 7.26% 3,828 9.04% 13,826 7.75%
After 5 years, but within 10 years 0 0.00% 6,558 8.07% 6,558 8.07%
After 10 years $74,238 6.02% $12,270 8.66% $86,508 6.39%
TOTAL
December 31, 1994 $74,384 5.74% $6,736 9.57% $81,120 6.06%
December 31, 1993 $88,900 5.85% $6,738 9.86% $95,638 6.13%
<FN>
<F1>
*Yields are calculated on a fully tax equivalent basis using a 34% rate.
</FN>
</TABLE>
The book value of other marketable equity securities with no stated
maturity totalled $5.31 million, yielding 6.03%; $5.23 million, yielding
4.41%; and $3.62 million, yielding 4.23%; at December 31, 1995, 1994,
and 1993 respectively. There were no other securities, except Federal
Reserve Bank stock, which remained constant for the period at $84,850,
earning a six percent (6%) dividend.
III. Loan Portfolio
The following table shows a breakdown of total loans by type at December
31 for years 1991 through 1995:
<TABLE>
TABLE V
LOANS
<CAPTION>
As of December 31,
Dollars in thousands 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Commercial and other $ 20,636 $ 17,806 $ 16,836 $ 17,043 $ 20,836
Real Estate Construction 4,093 1,991 2,353 2,420 6,570
Real Estate Mortgage 109,469 105,703 96,185 105,424 110,990
Tax Exempt Loans 3,003 4,754 5,585 6,987 7,717
Installment Loans to
Individuals (net of
Unearned Income) 50,854 43,487 29,322 29,640 34,069
Total $188,055 $173,741 $150,282 $161,514 $180,182
</TABLE>
Based on Standard Industry Code, there are no categories of loans which
exceed 10% of total loans other than the categories disclosed in the
preceding table.
The maturity distribution and rate sensitivity of certain categories of
the Bank's loan portfolio at December 31, 1995 is presented below:
<TABLE>
TABLE VI
MATURITY SCHEDULE OF SELECTED LOANS
<CAPTION>
December 31, 1995
Dollars in thousands One year One through Over five
or less five years years Total
<S> <C> <C> <C> <C>
Commercial and other $10,654 $ 9,982 --- $20,636
Real estate construction 4,077 16 --- 4,093
Total $14,731 $ 9,998 --- $24,729
Loans maturing after one year with:
Fixed interest rate $5,963 --- $ 5,963
Variable interest rate $4,019 --- $ 4,019
</TABLE>
The following table presents information concerning the aggregate amount
of nonaccrual, past due and restructured loans as of December 31 for the
years 1991 through 1995.
<TABLE>
TABLE VII
NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS
<CAPTION>
As of December 31,
Dollars in thousands 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Nonaccrual loans $2,447 $2,955 $5,328 $4,670 $ 128
Accruing loans past due
90 days or more 248 837 458 2,239 1,827
Restructured loans none none none none none
Interest income which would
have been recorded under
original loans terms 350 470 570 783 88
Interest income recorded
during the period 131 188 239 478 1
</TABLE>
Loans are placed in nonaccrual status if principal or interest has been
in default for a period of 90 days or more unless the obligation is both
well secured and in the process of collection. A debt is "well secured"
if it is secured (i) by collateral in the form of liens on or pledges of
real or personal property, including securities, that have a realizable
value sufficient to discharge the debt in full or (ii) by the guaranty
of a financially responsible party. A debt is "in the process of
collection" if collection of the debt is proceeding in due course either
through legal action, including judgment enforcement procedures, or, in
appropriate circumstances, through collection efforts not involving
legal action which are reasonably expected to result in repayment of the
debt or in its restoration to a current status.
Potential problem loans consist of loans that, because of potential
credit problems of the borrowers, have caused management to have serious
doubts as to the ability of such borrowers to comply with the loan
repayment terms. At December 31, 1995 such problem loans, not included
in Table VII, amounted to approximately $3.2 million. The potential
problem loans included one relationship in excess of $500 thousand. The
potential problem loans are generally secured by residential and
commercial real estate with appraised values exceeding the principal
balance of the loan.
IV. Summary of Loan Loss Experience
The determination of the balance of the Allowance for Loan Losses is
based upon a review and analysis of the loan portfolio and reflects an
amount which, in management's judgment, is adequate to provide for
possible future losses. Management's review includes monthly analysis
of past due and nonaccrual loans and detailed periodic loan by loan
analyses.
The principal factors considered by management in determining the
adequacy of the allowance are the growth and composition of the loan
portfolio, historical loss experience, the level of nonperforming loans,
economic conditions, the value and adequacy of collateral, and the
current level of the allowance.
The following table shows an analysis of the Allowance for Loan Losses
for the years 1991 through 1995.
<TABLE>
TABLE VIII
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
<CAPTION>
For the year ended December 31,
Dollars in thousands 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Balance at beginning of period $2,647 $2,692 $3,719 $3,233 $1,776
Charge Offs:
Commercial, financial and agricultural 1,210 147 1,178 1,610 1,280
Real estate construction --- --- --- --- ---
Real estate mortgage 135 316 230 152 217
Installment Loans to individuals 375 148 179 287 402
Total charge offs 1,720 611 1,587 2,049 1,899
Recoveries:
Commercial, financial and agricultural 296 431 174 80 14
Real estate construction --- --- --- --- ---
Real estate mortgage 44 19 7 14 12
Installment Loans to individuals 159 91 129 141 130
Total recoveries 499 541 310 235 156
Net charge offs 1,221 70 1,277 1,814 1,743
Additions charged to operations 825 25 250 2,300 3,200
Balance at end of period $2,251 $2,647 $2,692 $3,719 $3,233
Selected loan loss statistics
Loans (net of unearned income):
End of period $188,055 $173,741 $150,282 $161,514 $180,182
Daily average $180,638 $160,204 $155,551 $173,172 $184,751
Net charge offs to average total loans .68% .04% 0.82% 1.05% 0.94%
Provision for loan losses to
average total loans .46% .02% 0.16% 1.33% 1.73%
Provision for loan losses to
net charge offs 67.57% 35.71% 19.58% 126.79% 183.59%
Allowance for loan losses to
period end loans 1.20% 1.52% 1.79% 2.30% 1.79%
Earnings to loan loss coverage*<F1> 3.25 56.21 2.45 2.43 2.83
<FN>
<F1>
*Income before income taxes plus provision for loan
losses, divided by net charge-offs.
</FN>
</TABLE>
The following table shows the amount of the Allowance for Loan Losses
allocated to each category at December 31 for the years 1991 through
1995.
<TABLE>
TABLE IX
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
1995 1994 1993 1992 1991
<CAPTION>
As of December 31,
Dollar in thousands Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
of Loans of Loans of Loans of Loans of Loans
in Each in Each in Each in Each in Each
Category Category Category Category Category
to Total to Total to Total to Total to Total
Loans Loans Loans Loans Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial and other $1,241 12.57% $1,334 12.98% $1,779 28.96% $2,713 29.29% $1,101 34.07%
Real estate construction 55 2.18% 21 1.15% 27 1.52% 51 1.50% 43 1.34%
Real estate mortgage 564 58.21% 912 60.84% 740 49.81% 709 50.90% 1,521 47.03%
Consumer 391 27.04% 380 25.03% 146 19.71% 246 18.31% 568 17.56%
Total $2,251 100.00% $2,647 100.00% $2,692 100.00% $3,719 100.00% $3,233 100.00%
</TABLE>
The allocation amounts for 1991 have been reclassified to reflect the
classification adopted in 1992.
V. Deposits
The following table shows the average balances and average rates
paid on deposits for the years ended December 31, 1993, 1994, and
1995.
<TABLE>
TABLE X
DEPOSITS
<CAPTION>
For the year ended December 31, 1995 1994 1993
Dollars in thousands Average Average Average Average Average Average
Balance Rate Balance Rate Balance Rate
<S> <C> <C> <C> <C> <C> <C>
Interest bearing transaction accounts $ 49,335 2.64% $ 50,739 2.62% $ 43,406 2.80%
Money market deposit accounts 19,375 3.95% 19,526 3.14% 19,797 2.87%
Savings accounts 26,595 2.74% 30,070 2.75% 29,203 3.17%
Certificates of deposit,
$100,000 or more 13,789 5.51% 10,979 4.35% 10,217 4.48%
Other certificates of deposit 97,431 5.43% 83,512 4.61% 85,029 4.85%
Total interest bearing deposits 206,525 4.28% 194,826 3.64% 187,652 3.89%
Non-interest bearing demand deposits 40,843 40,004 40,870
Total deposits $247,368 $234,830 $228,522
</TABLE>
The following table shows certificates of deposit in amounts of
$100,000 or more as of December 31, 1995, 1994, and 1993 by time
remaining until maturity.
<TABLE>
TABLE XI
CERTIFICATES OF DEPOSIT $100,000 & MORE
<CAPTION>
(Dollars in thousands) 1995 1994 1993
<S> <C> <C> <C>
Maturing in
3 months or less $3,392 $1,941 $3,359
3 through 6 months 3,779 1,464 2,451
6 through 12 months 5,436 5,714 2,593
over 12 months 2,629 3,529 1,830
Total $15,236 $12,648 $10,233
</TABLE>
VI. Return on Equity and Assets
The return on average shareholders' equity and assets, the dividend pay
out ratio, and the average equity to average assets ratio for the past
three years are presented below.
1995 1994 1993
Return on average assets 0.80% 1.00% 0.82%
Return on average equity 8.07% 10.39% 8.90%
Dividend payout ratio 33.17% 25.03% 28.17%
Average equity to average assets 9.97% 9.59% 9.20%
VII. Short Term Borrowings
The Bank periodically borrowed funds through federal funds from its
correspondent banks, through the use of a demand note to the United
States Treasury (Treasury Tax and Loan Deposits), and through securities
sold under agreements to repurchase. The borrowings matured daily and
were based on daily cash flow requirements. The borrowed amounts (in
thousands) and their corresponding rates during 1995, 1994, and 1993 are
presented below:
<TABLE>
TABLE XII
SHORT TERM BORROWINGS
<CAPTION>
1995 1994 1993
Dollars in thousands Balance Rate Balance Rate Balance Rate
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31,
Federal funds purchased $ 1,400 5.63% $ 2,930 5.88% $ --- 3.19%
Securities sold under
agreements to repurchase 14,336 4.33% 10,764 4.54% 12,845 2.74%
U.S. treasury demand notes
and other borrowed money 560 3.25% 1,162 5.42% 92 7.36%
Total $16,296 $14,789 $12,937
Average daily balance outstanding:
Federal funds purchased $ 96 6.03% $ 932 4.77% $ 3 2.90%
Securities sold under
agreements to repurchase 11,438 5.01% 13,596 3.37% 15,395 2.84%
U.S. treasury demand notes
and other borrowed money 1,996 5.46% 617 4.55% 122 6.85%
Total $13,530 5.09% $15,145 3.50% $12,589 2.87%
The maximum amount outstanding
at any month end:
Federal funds purchased $ 1,400 $ 4,600 $ ---
Securities sold under
agreements to repurchase $14,636 $18,598 $20,202
U.S. treasury demand notes
and other borrowed money $ 4,066 $ 4,072 $ 397
</TABLE>
Item 2. Description of Property
The Bank owns the Main Office, an office building, and eight branches.
All of the above properties are owned directly and free of any
encumbrances. The land at the Fort Monroe branch is leased by the Bank
under an agreement expiring in October 2011. The remaining two branches
are leased from unrelated parties under leases with renewal options
which expire anywhere from 10-20 years. The Bank has received approval
for a new branch which will be located at Kiln Creek Parkway near
Victory Blvd. and is scheduled to open in the summer of 1996. For more
information concerning the commitments under current leasing agreements,
see Note 10. Lease Commitments of the Notes to Financial Statements
found in Item 8. Financial Statements and Supplementary Data of this
Report on Form 10K. Additional information on Other Real Estate Owned
can be found in Note 6. Other Real Estate Owned of the Notes to
Financial Statements found in Item 8. Financial Statements and
Supplementary Data of this Report on Form 10K.
Item 3. Legal Proceedings
The Company is not a party to any material pending legal proceedings
before any court, administrative agency, or other tribunal.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the
quarter ended December 31, 1995.
Part II
Item 5. Market for Common Equity And Related Stockholder Matters
The common stock of Old Point Financial Corporation is not listed on an
exchange and is not quoted by NASDAQ. The approximate number of
shareholders of record as of December 31, 1995 was 1,364. The range of
high and low prices and dividends per share of the Company's common
stock for each quarter during 1995 and 1994 is presented in Part I. Item
7. of this Annual Report on Form 10-K. Additional information related
to stockholder matters can be found in Note 15. Regulatory Matters of
the Notes to Financial Statements found in Item 8. Financial Statements
and Supplementary Data of this Report on Form 10K.
Item 6. Selected Financial Data
The following table summarizes the Company's performance for the past
five years.
<TABLE>
OLD POINT FINANCIAL CORPORATION
SELECTED FINANCIAL DATA
<CAPTION>
Dollars in thousands YEAR ENDED DECEMBER 31,
except per share data 1995 1994 1993 1992 1991
RESULTS OF OPERATIONS
<S> <C> <C> <C> <C> <C>
Interest income......................... $21,534 $19,234 $19,105 $20,988 $23,654
Interest expense........................ 9,531 7,625 7,743 9,999 13,361
------ ------ ------ ------ ------
Net interest income..................... 12,003 11,609 11,362 10,989 10,293
Provision for loan loss................. 825 25 250 2,300 3,200
------ ------ ------ ------ ------
Net interest income after provision for 11,178 11,584 11,112 8,689 7,093
Gains on sales of investment securities. 9 407 19 463 480
Noninterest income...................... 3,836 3,755 4,003 3,589 3,325
Noninterest expenses.................... 11,884 11,837 12,252 10,627 9,157
------ ------ ------ ------ ------
Income before taxes..................... 3,139 3,909 2,882 2,114 1,741
Applicable income taxes ................ 797 1,136 667 376 279
------ ------ ------ ------ ------
Net income.............................. $2,342 $2,773 $2,215 $1,738 $1,462
FINANCIAL CONDITION
Total assets............................ $304,266 $277,680 $273,884 $268,721 $266,032
Total deposits.......................... 256,535 235,599 234,171 231,509 227,139
Total loans............................. 188,055 173,741 150,282 161,514 180,182
Stockholders' equity.................... 30,328 26,222 25,836 24,193 22,932
Average assets.......................... 291,174 278,398 270,685 268,917 258,662
Average equity.......................... 29,022 26,694 24,897 23,856 22,996
PERTINENT RATIOS
Return on average assets................ 0.80% 1.00% 0.82% 0.65% 0.57%
Return on average equity................ 8.07% 10.39% 8.90% 7.29% 6.36%
Dividends paid as a percent of net incom 33.17% 25.03% 28.17% 28.40% 33.74%
Average equity as a percent of average a 9.97% 9.59% 9.20% 8.87% 8.89%
PER SHARE DATA
Net income.............................. $1.84 $2.20 $1.77 $1.41 $1.19
Cash dividends declared................. 0.61 0.55 0.50 0.40 0.40
Book value.............................. 23.81 20.75 20.60 19.47 18.59
GROWTH RATES
Year end assets......................... 9.57% 3.33% 1.92% 1.01% 7.36%
Year end deposits....................... 8.89% 1.77% 1.15% 1.92% 10.08%
Year end loans.......................... 8.24% 7.57% -6.95% -10.36% -4.05%
Year end equity......................... 15.66% 8.39% 6.79% 5.50% 4.45%
Average assets.......................... 4.59% 3.53% 0.66% 3.96% 9.00%
Average equity.......................... 8.72% 11.90% 4.36% 3.74% 9.89%
Net income.............................. -15.54% 59.55% 27.45% 18.88% -39.56%
Cash dividends declared................. 10.91% 37.50% 25.00% 0.00% 0.00%
Book value.............................. 14.78% 6.54% 5.78% 4.73% 4.41%
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
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 $2.34 million, or $1.84 per share in 1995 compared to
$2.77 million, or $2.20 per share in 1994 and $2.22 million, or $1.77
per share in 1993. Return on average assets was 0.80% in 1995, 1.00% in
1994, and 0.82% in 1993. Return on average equity was 8.07% in 1995,
10.39% in 1994 and 8.90% in 1993. For the past five years return on
average assets has averaged 0.77% and return on average equity has
averaged 8.20%. Selected Financial Highlights summarizes the Company's
performance for the past five years.
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 $12.40 million in 1995,
up $420 thousand, or 4% from $11.98 million in 1994 which was up $169
thousand, or 1% from $11.81 million in 1993. Net interest income is
affected by variations in interest rates and the volume and mix of
earning assets and interest-bearing liabilities. The net interest yield
decreased to 4.56% in 1995 from 4.63% in 1994 which was down from 4.73%
in 1993.
Tax equivalent interest income for 1995 increased $2.33 million.
Average earning assets grew $13.03 million, or 5%. In 1995, total
average loans increased $17.68 million, or 11%, while average investment
securities decreased $5.77 million, or 6%.
Interest expense increased $1.91 million, or 25%, in 1995. Based on
average balances, the mix of interest bearing liabilities shifted in
1995 from lower paying savings and interest checking accounts to higher
paying certificates of deposit. This shift to higher cost funds caused
the decline of seven basis points in the net interest yield.
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 increased
to $825 thousand in 1995 from $25 thousand in 1994 which was down from
$250 thousand in 1993.
Loans charged off during 1995 totalled $1.72 million compared to $611
thousand in 1994 and $1.59 million in 1993, while recoveries amounted to
$499 thousand in 1995, $541 thousand in 1994 and $310 thousand in 1993.
Net loans charged off to year-end loans were 0.65% in 1995, 0.04% in
1994, and 0.85% in 1993. The allowance for loan losses, as a percentage
of year-end loans, was 1.20% in 1995, 1.52% in 1994, and 1.79% in 1993.
As of December 31, 1995 nonperforming assets were $3.40 million, up
from $3.17 million at year-end 1994 which was down from $6.19 million at
year-end 1993. Nonperforming assets consist of loans in nonaccrual
status and other real estate. The 1995 total consisted of other real
estate of $954 thousand and $2.45 million in nonaccrual loans. The
other real estate consisted of $530 thousand in foreclosed commercial
property, $354 thousand in a commercial property originally acquired as
a potential branch site and now held for sale, and $70 thousand in
foreclosed one-to-four family residences. Nonaccrual loans consisted of
$1.07 million in commercial loans and $1.38 million in mortgage loans.
The Company has aggressively dealt with these credits and specific
action plans have been developed for each of these classified loans to
address any deficiencies. Loans still accruing interest but past due 90
days or more decreased to $248 thousand as of December 31, 1995 compared
to $837 thousand as of December 31, 1994 and $458 thousand as of
December 31, 1993.
The allowance for loan losses is analyzed for adequacy on a quarterly
basis to determine the required amount of provision for loan losses. A
loan-by-loan review is conducted on all significant classified
commercial and mortgage loans. Inherent losses on these individual
loans are determined and an allocation of the allowance is provided.
Smaller nonclassified commercial and mortgage loans and all consumer
loans are grouped by homogeneous pools with an allocation assigned to
each pool based on an analysis of historical loss and delinquency
experience, trends, economic conditions, underwriting standards, and
other factors.
OTHER INCOME
Other income decreased $317 thousand, or 8% in 1995 from 1994 compared
to an increase of $140 thousand, or 3% in 1994 over 1993. The 1995
decrease was due primarily to lower security gains. The 1994 security
gains of $407 thousand were the result of the sale of investment
securities as an asset/liability strategy to reduce the interest rate
risk in the portfolio.
OTHER EXPENSES
Other expenses remained almost constant in 1995 from 1994 after
decreasing $415 thousand, or 3%, in 1994 from 1993. Salaries and
employee benefits increased 2% in 1995 due to normal salary increases
and increased profit sharing contributions. Equipment expense decreased
14% due to lower depreciation expense. Other operating expenses
increased 2%. Lower FDIC insurance premiums were offset by higher
postage and stationery and supplies expenses.
ASSETS
At December 31, 1995, the Company had total assets of $304.3 million,
up 10% from $277.7 million at December 31, 1994. Average assets in 1995
were $291.2 million compared to $278.4 million in 1994. The growth in
assets in 1995 was due to the increase in certificates of deposit as
customers took advantage of higher interest rates.
During 1995 the Company began the conversion of its main frame
computer system. The new system consists of a new main frame computer,
a new proof of deposit reader/sorter, a new personal computer based
teller system, and the computer application software. The total cost of
these capital expenditures will be approximately $1.3 million. This
conversion is scheduled for completion in the first quarter of 1996.
The Company has begun construction of a new branch office in the Kiln
Creek area of York County. The total cost of this branch will be
approximately $850 thousand. The Kiln Creek branch is scheduled to open
in the summer of 1996.
LOANS
The Company experienced strong loan demand in 1995. Total loans (net
of unearned income) as of December 31, 1995 were $188.1 million, up 8%
from $173.7 million at December 31, 1994. All categories of loans
increased during 1995 except tax exempt loans. Footnote 3 of the
financial statements details the loan volume by category for the past
two years.
INVESTMENT SECURITIES
At December 31, 1995 total investment securities were $92.6 million,
up 11% from $83.5 million on December 31, 1994. The increase in the
investment portfolio was due to the growth in deposits exceeding the
growth in loans. The goal of the Company is to provide maximum return on
the investment portfolio within the framework of its asset/liability
objectives. These objectives include managing interest sensitivity,
liquidity and pledging requirements.
DEPOSITS
At December 31, 1995, total deposits amounted to $256.5 million, up
9% from $235.6 million on December 31, 1994. Non-interest bearing
deposits increased $5.8 million, or 16%, in 1995 over 1994. Savings
deposits decreased $1.2 million, or 1%, in 1995 from 1994. Certificates
of Deposit increased $16.3 million, or 16% in 1995 over 1994. Due to
the increase in interest rates, customers are now investing in
certificates of deposits.
STOCKHOLDERS' EQUITY
Total stockholders' equity as of December 31, 1995 was $30.3 million,
up 16% from $26.2 million on December 31, 1994. The Company is required
to maintain minimum amounts of capital under banking regulations. Under
the regulations Total Capital is composed of core capital (Tier 1) and
supplemental capital (Tier 2). Tier 1 capital consists of common
stockholder's equity less goodwill. Tier 2 capital consists of certain
qualifying debt and a qualifying portion of the allowance for loan
losses. The following is a summary of the Company's capital ratios for
1995, 1994 and 1993.
1995
Regulatory
Requirements 1995 1994 1993
Tier 1 4.00% 15.47% 16.32% 17.16%
Total Capital 8.00% 16.47% 17.57% 18.42%
Tier 1 Leverage 3.00% 9.80% 10.00% 9.32%
Year-end book value was $23.81 in 1995 and $20.75 in 1994. Cash
dividends were $777 thousand, or $.61 per share in 1995 and $694
thousand, or $.55 per share in 1994. The common stock of the Company
has not been extensively traded. The stock is not listed on an exchange
and is not quoted by NASDAQ. Bid and ask prices are not available for
the Company. The volume of trading of the stock is therefore limited.
The prices below are based upon a limited number of transactions known
to Management during the past two years. There were 1,410 stockholders
of the Company as of December 31, 1995. This stockholder count does not
include stockholders who hold their stock in a nominee registration.
The following is a summary of the dividends paid and market price on Old
Point Financial Corporation common stock for 1995 and 1994.
<TABLE>
<CAPTION>
1995 1994
Dividend Market Value Dividend Market Value
High Low High Low
<S> <C> <C> <C> <C> <C> <C>
1st Quarter $ 0.15 $ 37.50 $ 37.00 $ 0.125 $ 35.00 $ 35.00
2nd Quarter $ 0.15 $ 37.50 $ 37.50 $ 0.125 $ 37.50 $ 35.00
3rd Quarter $ 0.15 $ 37.50 $ 37.50 $ 0.15 $ 37.50 $ 35.00
4th Quarter $ 0.16 $ 37.50 $ 37.50 $ 0.15 $ 37.00 $ 36.00
</TABLE>
LIQUIDITY
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.
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.
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements and related footnotes of the
Company are presented below followed by the financial statements of the
parent.
Independent Auditors' Report
To the Board of Directors
Old Point Financial Corporation
Hampton, Virginia
We have audited the accompanying consolidated balance sheets of Old
Point Financial Corporation and subsidiary as of December 31, 1995 and
1994, and the related consolidated statements of income, cash flows and
changes in stockholders' equity for each of the years in the three-year
period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above,
present fairly, in all material respects, the consolidated financial
position of Old Point Financial Corporation and subsidiary as of
December 31, 1995 and 1994, and the consolidated results of their
operations and cash flows for each of the years in the three-year period
ended December 31, 1995, in conformity with generally accepted
accounting principles.
January 12, 1996
Newport News, Virginia
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
December 31, 1995 and 1994
(Dollars in Thousands)
1995 1994
<S> <C> <C>
ASSETS
Cash and due from banks $ 10,932 $ 8,941
Investments:
Securities available for sale,
at market 77,604 82,599
Securities to be held to maturity
(Market value $15,087,
and $918 in 1994) 15,020 919
Federal funds sold 513 247
Loans, total 188,055 173,741
Less - allowance for loan losses 2,251 2,647
Net loans 185,804 171,094
Premises and equipment 8,302 7,433
Other real estate owned 954 214
Other assets 5,137 6,233
Total assets $ 304,266 $ 277,680
LIABILITIES
Non interest-bearing deposits $ 42,902 $ 37,086
Savings deposits 95,805 96,986
Certificates of deposit 117,828 101,527
Total deposits 256,535 235,599
Federal funds purchased and securities
sold under repurchase agreements 15,736 13,694
Interest bearing demand notes issued
to the United States Treasury and
other liabilities for borrowed money 560 1,162
Other liabilities 1,107 1,003
Total liabilities 273,938 251,458
STOCKHOLDERS' EQUITY
Common stock, $5 par value,
3,000,000 shares authorized
Issued 1,273,537 in 1995 and
1,263,903 in 1994 6,368 6,320
Capital surplus 9,345 9,032
Retained earnings 14,085 12,793
Unrealized gain (loss) on securities 530 (1,923)
Total stockholders' equity 30,328 26,222
Total liabilities and
stockholders' equity $ 304,266 $ 277,680
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 1995, 1994 and 1993
(Dollars in thousands except per share amounts)
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 16,079 $ 13,757 $ 13,497
Interest on investment securities
Taxable 4,690 4,932 4,840
Exempt from income tax 501 414 523
5,191 5,346 5,363
Interest on trading account securities --- --- 16
Interest on federal funds sold 264 131 229
Total interest income 21,534 19,234 19,105
INTEREST EXPENSE
Interest on savings deposits 2,797 2,766 2,710
Interest on certificates of deposit 6,051 4,328 4,587
Interest on federal funds purchased
and securities sold under
repurchase agreements 573 503 437
Interest on demand notes issued
to the United States Treasury
and other liabilities for
borrowed money 110 28 9
Total interest expense 9,531 7,625 7,743
Net interest income 12,003 11,609 11,362
Provision for loan losses 825 25 250
Net interest income after provision
for loan losses 11,178 11,584 11,112
OTHER INCOME
Income from fiduciary activities 1,441 1,463 1,336
Service charges on deposit accounts 1,893 1,780 1,777
Other service charges,
commissions and fees 280 290 651
Security gains, net 9 407 19
Income from trading account --- --- 62
Other operating income 222 222 177
Total other income 3,845 4,162 4,022
OTHER EXPENSE
Salaries and employee benefits 7,178 7,050 6,807
Occupancy expense 714 700 748
Equipment expense 959 1,116 1,199
Other expense 3,033 2,971 3,498
Total other expenses 11,884 11,837 12,252
Income before income taxes 3,139 3,909 2,882
Income taxes 797 1,136 667
Net income $ 2,342 $ 2,773 $ 2,215
PER SHARE
Average shares outstanding (in thousands) 1,272 1,260 1,248
Net income per share of common stock $ 1.84 $ 2.20 $ 1.77
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1995, 1994 and 1993
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................................ $ 2,342 $ 2,773 $ 2,215
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization........................... 768 884 919
Provision for loan losses............................... 825 25 250
Market write-downs on other real estate owned............. 0 0 65
Gains on sale of investment securities, net............. (9) (407) (19)
Net amortization & accretion of securities available for 1,078 1,340 759
Net (increase) decrease in trading account.............. 0 0 0
Increase in other real estate owned..................... (553) (13) (767)
(Increase) decrease in other assets
(net of tax effect of FASB 115 adjustment)............ (168) (262) (362)
Increase (decrease) in other liabilities................ 104 63 (181)
Net cash provided by operating activities............. 4,387 4,403 2,879
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities ................................ (31,772) (8,902) (37,364)
Proceeds from maturities & calls of securities ......... 25,315 11,928 14,377
Proceeds from sales of securities ...................... 0 8,982 125
Loans made to customers................................. (104,681) (120,330) (97,917)
Principal payments received on loans.................... 89,145 96,801 107,872
Purchases of premises and equipment..................... (1,991) (178) (1,077)
Proceeds from sales of other real estate owned.......... 167 664 3,431
(Increase) decrease in federal funds sold............... (266) 4,553 2,520
Net cash provided by (used in) investing activities... (24,083) (6,482) (8,033)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in non-interest bearing deposits.... 5,816 (2,494) (3,814)
Increase (decrease) in savings deposits................. (1,181) (5,009) 13,620
Proceeds from the sale of certificates of deposit....... 66,693 67,378 37,379
Payments for maturing certificates of deposit........... (50,392) (58,447) (44,522)
Increase (decrease) in federal funds purchased &
repurchase agreements.................................. 2,042 849 1,062
Increase (decrease) in interest bearing
demand notes and other borrowed money.................. (602) 1,070 (23)
Proceeds from issuance of common stock.................. 88 200 70
Dividends paid.......................................... (777) (693) (624)
Net cash provided by financing activities............. 21,687 2,854 3,148
Net increase (decrease) in cash and due from banks.... 1,991 775 (2,006)
Cash and due from banks at beginning of period........ 8,941 8,166 10,172
Cash and due from banks at end of period.............. $ 10,932 $ 8,941 $ 8,166
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest.............................................. $ 9,286 $ 7,561 $ 7,859
Income taxes............................................... 830 980 375
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING TRANSACTIONS
Unrealized gain (loss) on investment
securities, net of tax................................ $ 2,453 $ (1,894) $ (18)
Transfer of property from premises and
equipment to other real estate owned................... $ 354 $ -- $ --
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years Ended December 31, 1995, 1994 and 1993
(Dollars in Thousands)
<CAPTION>
Unrealized
Common Gain (Loss) on Total
Stock Capital Retained Investment Stockholders'
(Par Value) Surplus Earnings Securities Equity
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Balance,
beginning of year $ 3,106 $ 5,396 $ 15,703 $ (12) $ 24,193
Net income --- --- 2,215 --- 2,215
Sale of stock 50 227 (207) --- 70
Stock dividend declared
on common stock 3,115 3,115 (6,230) --- ---
Increase in unrealized
gain (loss) on
marketable
equity securities --- --- --- (17) (17)
Cash dividends paid
($0.50 per share) --- --- (625) --- (625)
Balance,
end of year $ 6,271 $ 8,738 $ 10,856 $ (29) $ 25,836
YEAR ENDED DECEMBER 31, 1994
Balance,
beginning of year $ 6,271 $ 8,738 $ 10,856 $ (29) $ 25,836
Net income --- --- 2,773 --- 2,773
Sale of stock 49 294 (142) --- 201
Increase in unrealized
gain (loss) on
marketable equity securities --- --- --- (1,894) (1,894)
Cash dividends paid
($0.55 per share) --- --- (694) --- (694)
Balance,
end of year $ 6,320 $ 9,032 $ 12,793 $ (1,923) $ 26,222
YEAR ENDED DECEMBER 31, 1995
Balance,
beginning of year $ 6,320 $ 9,032 $ 12,793 $ (1,923) $ 26,222
Net income --- --- 2,342 --- 2,342
Sale of stock 48 313 (273) --- 88
Increase in unrealized
gain (loss) on
investment securities --- --- --- 2,453 2,453
Cash dividends paid
($0.61 per share) --- --- (777) --- (777)
Balance,
end of year $ 6,368 $ 9,345 $ 14,085 $ 530 $ 30,328
See Notes to Consolidated Financial Statements.
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of Old Point Financial Corporation
and its subsidiary conform to generally accepted accounting principles
and to general practice within the banking industry. The following is
a summary of significant accounting and reporting policies:
PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements include the accounts of Old
Point Financial Corporation ("the Company") and its subsidiary The
Old Point National Bank of Phoebus ("the Bank"). All significant
intercompany balances and transactions have been eliminated in
consolidation.
NATURE OF BUSINESS:
Old Point Financial Corporation is a one-bank holding company that
conducts substantially all of its operations through its subsidiary
The Old Point National Bank of Phoebus. The Bank services
individual and commercial customers, the majority of which are on
the Virginia Peninsula. The Bank has twelve branch offices. The
Bank offers a full range of deposit and loan products to its retail
and commercial customers. Substantially all of the Bank's deposits
are interest bearing. The majority of the Bank's loan portfolio is
secured by real estate.
USE OF ESTIMATES:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions. The amounts recorded in the
financial statements may be affected by those estimates and
assumptions. Actual results may vary from those estimates.
The Bank uses estimates primarily in developing its allowance for
loan losses, in computing deferred tax assets, in determining the
estimated useful lives of premises and equipment, and in the
valuation of other real estate owned.
INVESTMENT SECURITIES:
Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" (SFAS 115),
addresses the accounting and reporting for investments in equity
securities that have readily determinable fair values and for all
investments in debt securities. Those investments are to be
classified in three categories and accounted for as follows:
Held to maturity - Debt securities for which the Corporation
has the positive intent and ability to hold to maturity are
classified as held to maturity securities and reported at cost,
adjusted for premiums and discounts that are recognized in
interest income using the interest method over the period to
maturity.
Trading - Debt and equity securities that are bought and held
principally for the purpose of selling them in the near term
are classified as trading account securities and recorded at
their fair values. Unrealized gains and losses on trading
account securities are included immediately in income.
Available for sale - Debt and equity securities not classified
as either held to maturity securities or trading account
securities are classified as available for sale securities and
recorded at fair value, with unrealized gains and losses
excluded from earnings and reported as a separate component of
equity until realized. Gains and losses on the sale of
available-for-sale securities are determined using the specific
identification method. Premiums and discounts are recognized
in interest income using the interest method over the period to
maturity.
INTEREST ON LOANS:
Interest is accrued daily on the outstanding balances. Accrual of
interest is discontinued on a loan when management believes, after
considering collection efforts and other factors, that the
borrower's financial condition is such that collection of interest
is doubtful.
LOAN ORIGINATION FEES AND COSTS:
Loan origination fees and certain direct origination costs are
capitalized and recognized as an adjustment of the yield on the
related loan.
ALLOWANCE FOR LOAN LOSSES:
The allowance for loan losses is generated by direct charges
against income and is available to absorb loan losses. The
allowance is based upon management's periodic evaluation of changes
in the overall credit worthiness of the loan portfolio, economic
conditions in general, and the effect of these conditions upon the
financial status of specific borrowers and other factors.
The Bank is subject to regulation by the Office of the Comptroller
of the Currency. They may require that the Bank adjust its
allowance for loan losses upon request.
OTHER REAL ESTATE OWNED:
Other real estate owned is carried at the lower of cost or
estimated fair value and consists of foreclosed real property and
other property held for sale. The estimated fair value is reviewed
periodically by management and any write-downs are charged against
current earnings.
PREMISES AND EQUIPMENT:
Premises and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation and amortization are
calculated on both straight-line and accelerated methods and are
charged to expense over the estimated useful lives of the related
assets. Costs of maintenance and repairs are charged to expense as
incurred and improvements are capitalized.
INCOME TAXES:
Income taxes are provided based upon income reported in the
statements of income (after exclusion of non-taxable income such as
interest on state and municipal securities). The income tax effect
resulting from timing differences between financial statement pre-
tax income and taxable income is deferred to future periods.
PENSION PLAN:
The Bank has a non-contributory defined benefit pension plan
covering substantially all of its employees. Benefits are based
on years of service and average earnings during the highest
average sixty-month period during the final one hundred and
twenty months of employment.
The Bank's policy is to fund the maximum amount of contributions
allowed for tax purposes. The Bank accrues an amount equal to
its actuarially computed obligation under the plan.
The net periodic pension expense includes a service cost
component, interest on the projected benefit obligation, return
on plan assets and the effect of deferring and amortizing certain
actuarial gains and losses and the unrecognized net transition
asset over fifteen years.
TRUST ASSETS AND INCOME:
Assets held by the Trust Department are not included in the
financial statements, since such items are not assets of the
Bank. In accordance with industry practice, trust service income
is recognized primarily on the cash basis. Reporting such income
on the accrual basis would not materially effect net income.
STOCK SPLIT:
During 1993 the Board of Directors authorized a two for one stock
split effected in the form of a 100 percent stock dividend. All
earnings per share amounts and share amounts included in the
financial statements have been adjusted for the stock split. An
amount equal to the $5 par value of the additional common shares
has been transferred from retained earnings to common stock. In
addition, a transfer has been made from retained earnings to
capital surplus for an equal amount.
RECLASSIFICATIONS:
Certain amounts in the financial statements have been
reclassified to conform with classifications adopted in the
current year.
NOTE 2. INVESTMENT SECURITIES
At December 31, 1995, the investment securities portfolio is
composed of securities classified as held to maturity and
available for sale, in conjunction with SFAS 115. Investment
securities held to maturity are carried at cost, adjusted for
amortization of premiums and accretions of discounts, and
investment securities available for sale are carried at market
value.
<TABLE>
The amortized cost and fair value of investment securities held
to maturity at December 31, 1995 and 1994, were:
<CAPTION>
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Obligations of other United
States Government Agencies
as of December 31, 1995 $ 15,020 $ 67 $ --- $ 15,087
Obligations of State and
political subdivisions
as of December 31, 1994 $ 919 $ 5 $ (6) $ 918
</TABLE>
<TABLE>
The amortized cost and fair values of investment securities
available for sale at December 31, 1995 were:
<CAPTION>
December 31, 1995
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(Dollars in Thousands)
<S> <C> <C> <C> <C>
United States
Treasury securities $ 53,220 $ 613 $ (178) $ 53,655
Obligations of
other United States
Government agencies 5,998 46 --- 6,044
Obligations of state
and political
subdivisions 12,270 446 (3) 12,713
Other marketable equity
securities, at lower
of cost or market 4,400 --- (121) 4,279
Federal Reserve Bank stock 85 --- --- 85
Federal Home Loan Bank stock 828 --- --- 828
Total $ 76,801 $ 1,105 $ (302) $ 77,604
</TABLE>
<TABLE>
The amortized cost and fair value of investment securities
available for sale at December 31, 1994 were:
<CAPTION>
December 31, 1994
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(Dollars in Thousands)
<S> <C> <C> <C> <C>
United States
Treasury
securities $ 69,385 $ 18 $ (2,751) $ 66,652
Obligations of
other United States
Government
agencies 4,999 17 (140) 4,876
Obligations
of state and
political
subdivisions 5,817 170 (5) 5,982
Other marketable equity
securities, at lower
of cost or market 4,400 --- (223) 4,177
Federal Reserve Bank stock 85 --- --- 85
Federal Home Loan Bank stock 827 --- --- 827
Total $ 85,513 $ 205 $ (3,119) $ 82,599
</TABLE>
Investment securities carried at $33.4 million and $29.1 million,
at December 31, 1995 and 1994, respectively, were pledged to secure
public deposits and securities sold under agreements to repurchase
and for other purposes required or permitted by law.
The amortized cost and approximate market values of investment
securities at December 31, 1995 by contractual maturity are shown
below. Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations
with or without call or prepayment penalties.
<TABLE>
<CAPTION>
December 31, 1995
Available-For Sale Held-To-Maturity
Amortized Market Amortized Market
Cost Value Cost Value
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Due in one year or less $ 19,703 $ 19,788 $ --- $ ---
Due after one year through five years 38,401 38,826 8,020 8,048
Due after five years through
ten years 6,826 7,055 7,000 7,039
Due after ten years 6,558 6,742 --- ---
Total debt securities 71,488 72,411 15,020 15,087
Other securities without
stated maturity 5,313 5,193 --- ---
Total investment securities $ 76,801 $ 77,604 $ 15,020 $ 15,087
</TABLE>
The proceeds from the sales and maturities of
investment securities, and the related realized
gains and losses are shown below:
<TABLE>
<CAPTION>
1995 1994 1993
(Dollars in Thousands)
<S> <C> <C> <C>
Proceeds from sales and
maturities of investments $ 25,315 $ 20,910 $ 14,502
Realized gains $ 9 $ 411 $ 19
Realized losses --- (4) ---
Net gains $ 9 $ 407 $ 19
</TABLE>
NOTE 3. LOANS
<TABLE>
At December 31, loans before allowance for loan losses
consisted of:
<CAPTION>
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Commercial and other $ 20,636 $ 17,806
Real estate - construction 4,093 1,991
Real estate - mortgage 109,469 105,703
Installment loans to
individuals 50,854 43,487
Tax exempt loans 3,003 4,754
Total $ 188,055 $ 173,741
</TABLE>
<TABLE>
Information concerning loans which are contractually past due
or in non-accrual status is as follows:
<CAPTION>
1995 1994
(Dollars In Thousands)
<S> <C> <C>
Contractually past due
loans - past due 90 days
or more and still
accruing interest $ 248 $ 837
Loans which are in non-
accrual status $ 2,447 $ 2,955
</TABLE>
The Bank has had, and may be expected to have in the future,
banking transactions in the ordinary course of business with
directors, executive officers, their immediate families, and
companies in which they are principal owners (commonly referred to
as related parties), on the same terms, including interest rates
and collateral, as those prevailing at the time for comparable
transactions with others. The aggregate direct and indirect loans
of these persons totaled $1.2 million and $1.5 million at December
31, 1995 and 1994, respectively. These totals do not include loans
made in the ordinary course of business to other companies where a
director or executive officer of the Bank was also a director or
officer of such company but not a principal owner. None of the
directors or executive officers had direct or indirect loans
exceeding 10% of stockholders' equity at December 31, 1995.
NOTE 4. ALLOWANCE FOR LOAN LOSSES
<TABLE>
Changes in the allowance for loan losses are as follows:
<CAPTION>
1995 1994 1993
(Dollars in Thousands)
<S> <C> <C> <C>
Balance, beginning of year $ 2,647 $ 2,692 $ 3,719
Recoveries 499 541 310
Provision for loan losses 825 25 250
Loans charged off (1,720) (611) (1,587)
Balance, end of year $ 2,251 $ 2,647 $ 2,692
</TABLE>
NOTE 5. PREMISES AND EQUIPMENT
At December 31, premises and equipment consisted of:
<TABLE>
<CAPTION>
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Land $ 1,514 $ 1,995
Buildings 6,748 5,727
Leasehold improvements 855 885
Furniture, fixtures and
equipment 7,869 6,767
Total cost 16,986 15,374
Less accumulated
depreciation and
amortization 8,684 7,941
Net book value $ 8,302 $ 7,433
</TABLE>
NOTE 6. OTHER REAL ESTATE OWNED
Other real estate owned consisted of the following at December 31:
<TABLE>
<CAPTION>
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Foreclosed real estate $ 600 $ 214
Property held for sale 354 ---
Total $ 954 $ 214
</TABLE>
NOTE 7. INDEBTEDNESS
The Bank's short-term borrowings include federal funds purchased,
securities sold under repurchase agreements (including $2.5 million
to directors) and United States Treasury Demand Notes. The federal
funds purchased and securities sold under repurchase agreements are
held under various maturities and interest rates. The United
States Treasury Demand Notes are subject to call by the United
States Treasury with interest paid monthly at the rate of 25 basis
points (1/4%) below federal funds rate.
NOTE 8. STOCK OPTION PLAN
The Company has stock option plans with 59,250 shares of common
stock reserved for options to key employees. Option prices are the
fair market value of the common stock on the date the options were
granted.
Details of the number of shares and average prices are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Under option,
beginning of year 45,505 33,560 51,508
Granted 2,702 20,285 5,000
Exercised (15,220) (8,340) (22,948)
Expired (750) --- ---
Under option, end of year 32,237 45,505 33,560
Available to grant,
end of year 27,013 29,715 50,000
</TABLE>
<TABLE>
Average Prices
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Granted during the year $ --- $ 36.25 $ 25.00
Exercised during the year $ 19.54 $ 18.76 $ 17.01
Under option, end of year $ 32.82 $ 28.19 $ 20.97
</TABLE>
NOTE 9. INCOME TAXES
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
(Dollars in Thousands)
<S> <C> <C> <C>
Currently payable $ 572 $ 1,039 $ 327
Deferred 225 97 340
Reported tax expense $ 797 $ 1,136 $ 667
</TABLE>
The items that caused timing differences affecting deferred
income taxes are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
(Dollars in Thousands)
<S> <C> <C> <C>
Provision for loan losses $ 222 $ 51 $ 384
Other writedowns
and adjustments --- 86 12
Pension plan expenses 15 30 18
Deferred loan fees, net 27 (12) 22
Security gains and losses 3 (2) (5)
Interest on certain
non-accrual loans (77) (124) (66)
Alternative minimum taxes --- 51 (136)
Adoption of Statement on
Financial Accounting
Standards No. 109 --- --- 99
Other 35 17 12
$ 225 $ 97 $ 340
</TABLE>
A reconciliation of the "expected" Federal income tax expense on
income before income taxes with the reported income tax expense
follows:
<TABLE>
<CAPTION>
1995 1994 1993
(Dollars in Thousands)
<S> <C> <C> <C>
Expected tax expense (34%) $ 1,067 $ 1,329 $ 980
Interest expense on tax
exempt assets 25 18 24
Tax exempt interest (263) (240) (303)
Alternative minimum tax --- 51 (85)
Disqualified incentive stock
options (47) (44) (50)
Adoption of Statement on
Financial Accounting Standards
No. 109 --- --- 99
Other, net 15 22 2
Reported tax expense $ 797 $ 1,136 $ 667
</TABLE>
The components of the net deferred tax asset included in other assets
are as follows at December 31:
<TABLE>
<CAPTION>
1995 1994
(Dollars in thousands)
<S> <C> <C>
Components of Deferred Tax Liability
Depreciation $ (64) $ (31)
Accretion of discounts
on securities (22) (19)
Net unrealized (gain) on
available for sale securities (273) ---
Deferred loan fees and costs (46) (19)
Other (4) (5)
Deferred tax liability (409) (74)
Components of Deferred Tax Asset
Allowance for loan losses 358 580
Net unrealized loss on
available for sale securities --- 991
Interest on non-accrual loans 319 241
Deferred compensation 18 23
Pension 56 71
Deferred tax asset, net $ 342 $1,832
</TABLE>
NOTE 10. LEASE COMMITMENTS
The Bank has noncancellable leases on premises and equipment
expiring at various dates, including extensions to the year 2011.
Certain leases provide for increased annual payments based on
increases in real estate taxes and the Consumer Price Index.
The total approximate minimum rental commitment at December 31,
1995, under noncancellable leases is $544 thousand which is due as
follows:
Year (Dollars in Thousands)
1996 $ 104
1997 94
1998 93
1999 80
2000 31
Remaining term of leases 142
Total $ 544
The aggregate rental expense of premises and equipment was $165
thousand, $178 thousand and $140 thousand for 1995, 1994 and 1993,
respectively.
NOTE 11. PENSION PLAN
The following table sets forth the Pension Plan's funded status and
amounts recognized in the Bank's financial statements at December
31:
1995 1994
(Dollars in Thousands)
Actuarial present value of
benefit obligations:
Vested benefits $ (1,533) $ (1,556)
Accumulated benefit obligation $ (1,628) $ (1,605)
Projected benefit obligation $ (2,289) $ (2,332)
Plan assets at fair value 1,661 2,058
Projected benefit obligation
in excess of plan assets (628) (274)
Unrecognized net plan asset (75) (88)
Net deferrals 537 153
Pension plan liability included
in consolidated balance sheets $ (166) $ (209)
Net pension cost includes
the following components:
Service cost - benefits
earned in the current period $ 134 $ 125
Interest cost on projected
benefit obligations 149 153
Return on plan assets (98) (131)
Recognition of unrecognized
net plan asset (12) (13)
Amortization of net deferrals 31 6
Net pension cost $ 204 $ 140
Contributions to the Plan $ 248 $ 229
The actuarial present value of benefits and obligations were
determined by use of the following assumptions:
1995 1994
Discount rate 7.5% 7.5%
Compensation increase 5.0% 6.5%
Expected long term rate of
return on assets 7.5% 7.5%
NOTE 12. PROFIT SHARING
The Bank has a defined contribution profit sharing and thrift plan
covering substantially all of its employees. The Bank may make
profit sharing contributions to the plan as determined by the Board
of Directors. In addition, the Bank matches thrift contributions
by employees fifty cents for each dollar contributed. Expenses
related to the plan totaled $215 thousand and $196 thousand in 1995
and 1994, respectively.
NOTE 13. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Bank makes various
commitments and incurs certain contingent liabilities. These
commitments and contingencies represent off-balance sheet risk for
the Bank. To meet the financing needs of its customers, the Bank
makes lending commitments under commercial lines of credit, home
equity loans and construction and development loans. The Bank also
incurs contingent liabilities related to irrevocable letters of
credit.
At December 31, 1995, the Bank had the following off-balance sheet
items (in thousands):
Commitments to extend credit:
Home equity lines of credit $ 8,965
Construction and development loans
committed but not funded 7,106
Other lines of credit(principally
commercial) 12,374
$ 28,445
Irrevocable letters of credit $ 1,212
Commitments to extend credit are agreements to lend to a customer
as long as there is no violation of any condition established in
the contract. Commitments generally have fixed expiration dates or
other termination clauses and may require payment of a fee. Since
many of the commitments are expected to expire without being drawn
upon, the total commitment amounts do not necessarily represent
future cash requirements. The Bank evaluates each customer's
credit worthiness on a case-by-case basis. The amount of
collateral obtained, if deemed necessary by the Bank, upon
extension of credit is based on management's credit evaluation of
the customer. Collateral held varies but may include accounts
receivable, inventory, property, plant and equipment, and income-
producing commercial properties.
Standby letters of credit and financial guarantees written are
conditional commitments issued by the Bank to guarantee the
performance of a customer to a third party. Those guarantees are
primarily issued to support private borrowing arrangements. Most
guarantees extend for less than two years and expire in decreasing
amounts through 1997. The credit risk involved in issuing letters
of credit is essentially the same as that involved in extending
loans to customers. The Bank holds various collateral supporting
those commitments for which collateral is deemed necessary.
NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Bank's financial instruments at
December 31, 1995 are as follows:
Carrying Fair
Amount Value
(Dollars in Thousands)
Cash and due from banks $ 10,932 $ 10,932
Investment securities,
held to maturity 15,020 15,087
Investment securities,
available for sale 77,604 77,604
Federal funds sold 513 513
Loans, net of allowances
for loan losses 185,804 186,922
Deposits:
Non-interest bearing
deposits 42,902 42,902
Savings deposits 95,805 95,805
Certificates of Deposit 117,828 118,385
Securities sold under repurchase
agreement and federal funds purchased 15,736 15,736
Interest bearing U.S. Treasury
demand notes and other liabilities
for borrowed money 560 560
Commitments to extend credit 28,445 28,445
Irrevocable letters of credit 1,212 1,212
The above presentation of fair values is required by statement on
Financial Accounting Standards No. 107 "Disclosures about Market
Values of Financial Instruments". The fair values shown do not
necessarily represent the amounts which would be received on sale
or other disposition of the instruments.
The carrying amounts of cash and due from banks, federal funds
sold, demand and savings deposit and securities sold under
repurchase agreements represent items which do not present
significant market risks, are payable on demand or are of such
short duration that market value approximates carrying value.
Investment securities are valued at the quoted market price for the
individual securities held.
The fair value of loans is estimated by discounting future cash
flows using the current rates at which similar loans would be made
to borrowers.
Certificates of deposit are presented at estimated fair value using
rates currently offered for deposits of similar remaining
maturities.
NOTE 15. REGULATORY MATTERS
The Company is required to maintain minimum amounts of capital to
total "risk weighted" assets, as defined by the banking regulators.
At December 31, 1995, The Company is required to have minimum Tier
1 and Total Capital ratios of 4.00% and 8.00% respectively. The
Company's actual ratios at that date were 15.47% and 16.47%,
respectively. The Company's leverage ratio at December 31, 1995
was 9.80%.
The approval of the Comptroller of the Currency is required if the
total of all dividends declared by a national bank in any calendar
year exceeds the bank's net profits for that year combined with its
retained net profits for the preceding two calendar years. Under
this formula, the banking subsidiary can distribute as dividends to
the Company in 1996, without the approval of the Comptroller of the
Currency, $3.40 million plus an additional amount equal to the
Bank's retained net profits for 1996 up to the date of any dividend
declaration.
The following are the summarized financial statements of the
Company.
OLD POINT FINANCIAL CORPORATION
PARENT ONLY
BALANCE SHEETS
As of December 31, 1995 1994 1993
Dollars in thousands
ASSETS
Cash in bank $ 122 $ 154 $ 132
Investment securities 1,670 1,438 646
Total Loans 52 54 56
Investment in subsidiary 28,396 24,507 24,425
Other real estate owned 0 0 435
Other assets 88 68 142
TOTAL ASSETS $30,328 $26,221 $25,836
LIABILITIES AND STOCKHOLDERS EQUITY
Notes payable - bank $ --- $ --- $ ---
Other liabilities --- --- ---
Total liabilities --- --- ---
Stockholders' equity 30,328 26,221 25,836
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $30,328 $26,221 $25,836
OLD POINT FINANCIAL CORPORATION
PARENT ONLY
INCOME STATEMENTS
For the year ended December 31, 1995 1994 1993
Dollars in thousands
INCOME
Cash dividends from subsidiary $1,000 $ 950 $ 675
Interest and Fees on Loans 4 5 1
Interest income from investment securities 96 63 32
Other income --- --- 27
TOTAL INCOME 1,100 1,018 735
EXPENSES
Interest on borrowed money --- --- 9
Other expenses 274 244 258
TOTAL EXPENSES 274 244 267
Income before taxes and undistributed
net income of subsidiary 826 774 468
Income tax (59) (60) (70)
Net income before undistributed
net income ofsubsidiary 885 834 538
Undistributed net income of subsidiary 1,457 1,939 1,677
NET INCOME $2,342 $2,773 2,215
OLD POINT FINANCIAL CORPORATION
PARENT ONLY
STATEMENTS OF CASH FLOWS
For the year ending December 31, 1995 1994 1993
Dollars in thousands
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $2,342 $2,773 $2,215
Adjustment to reconcile net income to net cash
provided by operating activities:
Equity in undistributed (income)
losses of subsidiaries (1,457) (1,939) (1,677)
Market write-down on other real estate owned --- --- 65
Increase (decrease) in other assets (17) 95 (71)
Increase (decrease) in other liabilities --- --- (12)
Net cash provided by operating activities 868 929 520
CASH FLOWS FROM INVESTING ACTIVITIES
(Purchases)/Sales of Investments (192) (850) 125
Purchase of Premises and Equipment (21) --- ---
(Increase) decrease in other real estate owned --- 435 250
Loans to Customers 2 2 (56)
Net cash (used in) investing activities (211) (413) 319
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in borrowed money --- --- (180)
Proceeds from issuance of common stock 88 200 70
Dividends paid (777) (694) (624)
Net cash provided by financing activities (689) (494) (734)
Net increase in cash and due from banks (32) 22 105
Cash and due from banks at beginning of period 154 132 27
Cash and due from banks at end of period $122 $154 $132
Accounting Rule Changes
None.
Regulatory Requirements and Restrictions
For the reserve maintenance period in effect at December 31, 1995, 1994
and 1993 the bank was required to maintain with the Federal Reserve Bank
of Richmond an average daily balance totalling approximately $ 4.6
million, $4.9 million, and $4.6 million respectively.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The twelve persons named below, all of whom currently serve as
directors of the Company will be nominated to serve as directors until
the 1996 Annual Meeting, or until their successors have been duly
elected and have qualified.
<TABLE>
<CAPTION>
Principal Amount and Nature of
Occupation Beneficial Ownership
Director For Past As of March 14, 1995
Name and (Age) Since <F1> Five Years (Percent of Class)<F2>
<S> <C> <C> <C>
Dr. Richard F. Clark (63) 1981 Pathologist 30,589 <F3>
Sentara Hampton 2.4%
General Hospital
Gertrude S. Dixon (82) 1981 Real Estate Management 96,062 <F3>
and Ownership 7.5%
Russell Smith Evans Jr. (53) 1993 Assistant Treasurer and 715 <F3><F5>
Corporate Fleet Manager
Ferguson Enterprises
G. Royden Goodson, III (40) 1994 President 2,450 <F3><F5>
Warwick Plumbing & Heating Corp.
Arthur D. Greene (51) 1994 Surgeon - Partner 1,000 <F5>
Tidewater Orthopaedic Associates
Stephen D. Harris (54) 1988 Attorney-at-Law - Partner 4,175 <F5>
Geddy, Harris & Geddy
John Cabot Ishon (49) 1989 President 6,290 <F3><F5>
Hampton Stationery
Eugene M. Jordan (72) 1964 Attorney-at-Law 13,890 <F3>
Jordan, Ishon & Jordan, P.C. 1.1%
John B. Morgan, II (49) 1994 Vice President 1,200 <F3><F5>
Morgan-Marrow Insurance
Dr. H. Robert Schappert (57) 1996 Veterinarian - Owner 44,870 <F3>
Beechmont Veterinary Hospital 3.5%
John G. Sebrell (48) 1992 President & CEO 14,647 <F4>
The Old Point National 1.1%
Bank of Phoebus
Robert F. Shuford (58) 1965 Chairman of the Board, 70,579 <F3><F4>
President & CEO 5.5%
Old Point Financial Corporation
<FN>
<F1>
Refers to the year in which the individual first became a
director of the Bank. Dr. Richard F. Clark, Gertrude S. Dixon, Eugene
M. Jordan, and Robert F. Shuford became directors of the Company upon
consummation of the Bank's reorganization on October 1, 1984. Russell
Smith Evans, Jr. was elected April 27, 1993, G. Royden Goodson, III
was elected on August 9, 1994, Dr. Arthur D. Greene was elected on
August 9, 1994, John B. Morgan, II was elected on October 11, 1994,
Stephen D. Harris was elected October 11, 1988, John Cabot Ishon was
elected March 27, 1990, John G. Sebrell was elected August 11, 1992,
and Dr. H. Robert Schappert was elected February 13, 1996. All
present directors of the Company are directors of the Bank.
<F2>
For purposes of this table, beneficial ownership has been
determined in accordance with the provisions 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.
<F3>
Includes shares held (i) by their close relatives or held jointly
with their spouses, (ii) as custodian or trustee for the benefit of
their children or others, or (iii) as attorney-in-fact subject to a
general power of attorney - Dr. Clark, 54 shares; Mrs. Dixon, 48,740
shares; Mr. Evans, 315 shares; Mr. Goodson, 1,900 shares; Mr. Ishon,
1,640 shares; Mr. Jordan, 8,485 shares; Mr. Morgan, 1,000 shares; Dr.
Schappert, 40,685 shares; and Mr. Shuford, 39,266 shares.
<F4>
Includes shares that may be acquired within 60 days pursuant to
the exercise of stock options granted under the Old Point Stock Option
Plans - Mr. Sebrell 12,977 and Mr. Shuford 2,750.
<F5>
Represents less than 1.0% of total outstanding shares.
</FN>
</TABLE>
There are two family relationships among the directors and executive
officers. Mr. Jordan is the father-in-law of Mr. Ishon. Mr. Shuford
and Dr. Schappert are married to sisters. None of the directors
serves as a director of any other company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of
1934.
There were no delinquent Securities and Exchange Form 4 filings during
1995.
In addition to the 2 executive officers included in the preceding list
of directors, the persons listed below were executive officers of the
Company or its subsidiary as of December 31, 1995.
Executive Principal
Officer Occupation For
Name and (Age) Since (1) Past Five Years
Louis G. Morris (41) 1988 Senior Vice President and Treasurer
Old Point Financial Corporation
Cary B. Epes (47) 1993 Senior Vice President
Old Point Financial Corporation
W. Rodney Rosser (55) 1989 Senior Vice President and Secretary
Old Point Financial Corporation
Margaret P. Causby (45) 1992 Senior Vice President
Old Point National Bank
Patricia A. Orendorff (49) 1994 Senior Vice President and Cashier
Old Point National Bank
Each of these executive officers owns less than 1% of the stock of the
Company.
(1) Prior to employment with the Company, Cary B. Epes was Vice
President and Commercial Account Manager at Crestar Bank. All other
executive officers served in virtually the same capacity with the
Company and/or the Bank prior to appointment as an executive officer.
Item 11. Executive Compensation
Cash Compensation
The following table presents all compensation paid or accrued by the
Company and the Bank to the Company's Chief Executive Officer and each
executive officer whose salary and bonus for 1995 exceeds $100,000.
Mr. Robert F. Shuford is compensated by the Company and Mr. John G.
Sebrell is compensated by the Bank.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation
Other
Name Annual All Other
and Compen- Compen-
Principal Salary Bonus sation sation
Position Year ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Robert F. Shuford 1995 $147,900 <F1> $ 0 $ 2,891 $55,053 <F3>
Holding Company 1994 $143,400 <F1> $ 6,000 <F2> $ 2,941 $42,610 <F3>
Chairman, President 1993 $138,100 <F1> $ 4,000 $ 3,233 $65,655 <F3>
& CEO
John G. Sebrell 1995 $113,900 <F1> $ 0 $ 8,047 $ 6,369 <F4>
Bank 1994 $110,400 <F1> $12,244 <F2> $ 8,631 $ 5,682
President & CEO 1993 $105,100 <F1> $ 8,000 $11,119 $ 0
<FN>
<F1>
Salary includes directors' fees as follows: Mr. Shuford - 1995
of $3,900, 1994 of $5,400, and 1993 of $5,100; Mr. Sebrell -
1995 of $3,900, 1994 of $5,400, and 1993 of $5,100.
<F2>
In 1994, bonus consideration for Mr. Shuford and Mr. Sebrell was
deferred until January of the following year so that year end
results could be evaluated by the Compensation Committee.
<F3>
Mr. Shuford has received other compensation as follows:
1995 1994 1993
Profit Sharing $ 3,233 $ 3,001 $2,592
401-K Matching Plan 4,320 4,149 3,990
Split Dollar Life Insurance 24,750 1,460 1,323
Sale of ISO * 22,750 34,000 57,750
Total $55,053 $42,610 $65,655
* The Split Dollar policy was awarded to Mr. Shuford in 1995.
When this occurs the gain must be treated as compensation to the
employee.
* When an incentive stock option (ISO) share is sold prior to a
one year vesting period, the gain on the sale is treated as
compensation to the employee.
<F4>
Mr. Sebrell has received other compensation as follows:
1995 1994 1993
Profit Sharing $ 2,469 $ 2,285 $ 0
401-K Matching Plan 3,300 3,159 0
Split Dollar Life Insurance 600 238 0
Total $ 6,369 $ 5 682 $ 0
Mr. Sebrell was ineligible for participation in the profit
sharing and 401-K Plan prior to 1994.
</FN>
</TABLE>
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Security ownership of certain beneficial owners and management is
detailed in Part III, Item 10. of this Annual Report on Form 10-K.
Item 13. Certain Relationships and Related Transactions
Some of the Company directors, executive officers, and members of
their immediate families, and corporations, partnerships and other
entities of which such persons are officers, directors, partners,
trustees, executors or beneficiaries, are customers of the Bank. As of
December 31, 1995, borrowing by all policy making officers and
directors amounted to $1.2 million. This amount represented 4.0% of
the total equity capital accounts of the Company as of December 31,
1995. All loans and commitments to lend included in such transactions
were made in the ordinary course of business, upon substantially the
same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons
and did not involve more than normal risk of collectibility or present
other unfavorable features. It is the policy of the Bank to provide
loans to officers who are not executive officers and to employees at
more favorable rates than those prevailing at the time for comparable
transactions with other persons. These loans do not involve more than
the normal risk of collectibility or present other unfavorable
features. The Bank expects to have in the future similar banking
transactions with directors, officers, principal stockholders and
their associates.
The law firm of Jordan, Ishon and Jordan, P.C. serves as legal counsel
to the Bank. Mr. Eugene M. Jordan is a member of the firm. During
1995, the firm received from the Bank a retainer and fees totalling
$67,696. Hampton Stationery, of which John Cabot Ishon is the owner,
provided furniture and supplies to the Bank for which it paid $104,353
during 1995. Morgan-Marrow Company, of which John B. Morgan, II is
President, provided insurance to the Bank, the total premiums of which
were $195,802 during 1995. Geddy, Harris & Geddy, of which Stephen D.
Harris is a partner, also provided legal services to the Bank during
1995.
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K
A.1 Financial Statements:
The following audited financial statements are included in Part II,
Item 8, of this Annual Report on Form 10-K.
Consolidated Balance Sheets - December 31, 1995 and 1994
Consolidated Statements of Income
Years Ended December 31, 1995, 1994 and 1993
Consolidated Statements of Changes in Stockholders' Equity
Years Ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows
Years Ended December 31, 1995, 1994 and 1993
Notes to Financial Statements
Auditor's Report
A.2 Financial Statement Schedules:
Schedule Location
Average Balance Sheets, Net Interest
Income and Rates Part I, Item 1
Analysis of Change in Net Interest Income Part I, Item 1
Interest Sensitivity Analysis Part I, Item 1
Investment Securities Part I, Item 1
Investment Security Maturities & Yields Part I, Item 1
Loans Part I, Item 1
Maturity Schedule of Selected Loans Part I, Item 1
Nonaccrual, Past Due and Restructured Loans Part I, Item 1
Analysis of the Allowance for Loan Losses Part I, Item 1
Allocation of the Allowance for Loan Losses Part I, Item 1
Deposits Part I, Item 1
Certificates of Deposit of $100,000 and more Part I, Item 1
Return on Average Equity Part I, Item 1
Short Term Borrowings Part I, Item 1
Lease Commitments Part I, Item 1
Other Real Estate Owned Part I, Item 1
Selected Financial Data Part II, Item 6
Capital Ratios Part II, Item 7
Dividends Paid and Market Price of
Common Stock Part II, Item 7
Proceeds from sales and maturities
of securities Part II, Item 8
Premises and Equipment Part II, Item 8
Stock Option Plan Part II, Item 8
Components of Income Tax Expense Part II, Item 8
Reconciliation of Expected and
Reported Income Tax Expense Part II, Item 8
Pension Plan Part II, Item 8
Commitments and Contingencies Part II, Item 8
Fair Value of Financial Instruments Part II, Item 8
Directors and Executive Officer Part III, Item 10
Executive Compensation Part III, Item 11
A.3 Exhibits:
3 Articles of Incorporation and Bylaws
4 Not Applicable
9 Not Applicable
10 Not Applicable
11 Not Applicable
12 Not Applicable
13 Not Applicable
18 Not Applicable
19 Not Applicable
22 Subsidiaries of the Registrant
23 Not Applicable
24 Consent of Independent Certified Public Accountants
25 Powers of Attorney
27 Financial Data Schedule
28 Not Applicable
29 Not Applicable
B. Reports on Form 8-K:
No Reports on Form 8-K were filed during the fourth quarter of 1995.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized on the 27th day of March, 1996.
OLD POINT FINANCIAL CORPORATION
/s/Robert F. Shuford
Robert F. Shuford, President
Pursuant to the requirements of the Securities and Exchange Act
of 1934, this report has been signed by the following persons on
behalf of the registrant and in their capacities on the 27th day of
March, 1996.
Signature Title
/s/Robert F. Shuford President and Director
Robert F. Shuford
Principal Executive Officer
/s/Louis G. Morris Senior Vice President
Louis G. Morris and Treasurer
Principal Financial & Accounting Officer
/s/Richard F. Clark * Director
/s/Gertrude S. Dixon * Director
/s/Russell S. Evans, Jr. * Director
/s/G. Royden Goodson, III Director
/s/Dr. Arthur D. Greene Director
/s/Steven D. Harris * Director
/s/John Cabot Ishon * Director
/s/Eugene M. Jordan * Director
/s/John B. Morgan * Director
/s/Dr. H. Robert Schappert * Director
/s/John G. Sebrell * Executive Vice President
and Director
EXHIBIT 22. SUBSIDIARIES OF THE REGISTRANT
The Old Point National Bank of Phoebus, a wholly-owned subsidiary
of the Corporation, is a national banking association subject to
regulation by the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, and the Federal Reserve System.
EXHIBIT 24. CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Eggleston Smith P.C.
Certified Public Accountants & Consultants
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
Old Point Financial Corporation
We consent to the incorporation in this Annual Report on Form 10-K
our report dated January 12, 1996, relating to the consolidated
financial statements of Old Point Financial Corporation as of
December 31, 1995, 1994, and 1993, and for each of the years in the
three-year period ended December 31, 1995.
/s/Eggleston Smith P.C.
Newports News, Virginia
March 25, 1996
EXHIBIT 25. POWERS OF ATTORNEY
Old Point Financial Corporation
Power of Attorney
I, Russell S. Evans, Jr., do hereby constitute and appoint
Robert F. Shuford, John G. Sebrell, and Eugene M. Jordan, my true
and lawful attorney-in-fact, any of whom acting singly is hereby
authorized for me and in my name and on my behalf as a director
and/or officer of Old Point Financial Corporation (the
"Corporation"), to act and to execute any and all instruments as
such attorneys or attorney deem necessary or advisable to enable
the Corporation to comply with the Securities Exchange Act of 1934,
as amended ("Act"), and any rules, regulations, policies or
requirements of the Securities Exchange Commission (the
"Commission") in respect thereof in connection with the preparation
and filing by the Corporation with the Commission of its Annual
Report on Form 10-K for the year ended December 31, 1995 and any
and all amendments to such Report, together with such other
supplements, statements, instrument and documents as such attorneys
or attorney deem necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/ Russell S. Evans (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Richard F. Clark, do hereby constitute and appoint Robert
F. Shuford, John G. Sebrell, and Eugene M. Jordan, my true and
lawful attorney-in-fact, any of whom acting singly is hereby
authorized for me and in my name and on my behalf as a director
and/or officer of Old Point Financial Corporation (the
"Corporation"), to act and to execute any and all instruments as
such attorneys or attorney deem necessary or advisable to enable
the Corporation to comply with the Securities Exchange Act of 1934,
as amended ("Act"), and any rules, regulations, policies or
requirements of the Securities Exchange Commission (the
"Commission") in respect thereof in connection with the preparation
and filing by the Corporation with the Commission of its Annual
Report on Form 10-K for the year ended December 31, 1995 and any
and all amendments to such Report, together with such other
supplements, statements, instrument and documents as such attorneys
or attorney deem necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/ Richard F. Clark (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Gertrude S. Dixon, do hereby constitute and appoint Robert
F. Shuford, John G. Sebrell, and Eugene M. Jordan, my true and
lawful attorney-in-fact, any of whom acting singly is hereby
authorized for me and in my name and on my behalf as a director
and/or officer of Old Point Financial Corporation (the
"Corporation"), to act and to execute any and all instruments as
such attorneys or attorney deem necessary or advisable to enable
the Corporation to comply with the Securities Exchange Act of 1934,
as amended ("Act"), and any rules, regulations, policies or
requirements of the Securities Exchange Commission (the
"Commission") in respect thereof in connection with the preparation
and filing by the Corporation with the Commission of its Annual
Report on Form 10-K for the year ended December 31, 1995 and any
and all amendments to such Report, together with such other
supplements, statements, instrument and documents as such attorneys
or attorney deem necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/ Gertrude S. Dixon (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Stephen D. Harris, do hereby constitute and appoint Robert
F. Shuford, John G. Sebrell, and Eugene M. Jordan, my true and
lawful attorney-in-fact, any of whom acting singly is hereby
authorized for me and in my name and on my behalf as a director
and/or officer of Old Point Financial Corporation (the
"Corporation"), to act and to execute any and all instruments as
such attorneys or attorney deem necessary or advisable to enable
the Corporation to comply with the Securities Exchange Act of 1934,
as amended ("Act"), and any rules, regulations, policies or
requirements of the Securities Exchange Commission (the
"Commission") in respect thereof in connection with the preparation
and filing by the Corporation with the Commission of its Annual
Report on Form 10-K for the year ended December 31, 1995 and any
and all amendments to such Report, together with such other
supplements, statements, instrument and documents as such attorneys
or attorney deem necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/ Stephen D. Harris (SEAL)
Old Point Financial Corporation
Power of Attorney
I, John Cabot Ishon, do hereby constitute and appoint Robert
F. Shuford, John G. Sebrell, and Eugene M. Jordan, my true and
lawful attorney-in-fact, any of whom acting singly is hereby
authorized for me and in my name and on my behalf as a director
and/or officer of Old Point Financial Corporation (the
"Corporation"), to act and to execute any and all instruments as
such attorneys or attorney deem necessary or advisable to enable
the Corporation to comply with the Securities Exchange Act of 1934,
as amended ("Act"), and any rules, regulations, policies or
requirements of the Securities Exchange Commission (the
"Commission") in respect thereof in connection with the preparation
and filing by the Corporation with the Commission of its Annual
Report on Form 10-K for the year ended December 31, 1995 and any
and all amendments to such Report, together with such other
supplements, statements, instrument and documents as such attorneys
or attorney deem necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/ John Cabot Ishon (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Eugene M. Jordan, do hereby constitute and appoint Robert
F. Shuford, John G. Sebrell, and Eugene M. Jordan, my true and
lawful attorney-in-fact, any of whom acting singly is hereby
authorized for me and in my name and on my behalf as a director
and/or officer of Old Point Financial Corporation (the
"Corporation"), to act and to execute any and all instruments as
such attorneys or attorney deem necessary or advisable to enable
the Corporation to comply with the Securities Exchange Act of 1934,
as amended ("Act"), and any rules, regulations, policies or
requirements of the Securities Exchange Commission (the
"Commission") in respect thereof in connection with the preparation
and filing by the Corporation with the Commission of its Annual
Report on Form 10-K for the year ended December 31, 1995 and any
and all amendments to such Report, together with such other
supplements, statements, instrument and documents as such attorneys
or attorney deem necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/ Eugene M. Jordan (SEAL)
Old Point Financial Corporation
Power of Attorney
I, John G. Sebrell, do hereby constitute and appoint Robert F.
Shuford, John G. Sebrell, and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or officer
of Old Point Financial Corporation (the "Corporation"), to act and
to execute any and all instruments as such attorneys or attorney
deem necessary or advisable to enable the Corporation to comply
with the Securities Exchange Act of 1934, as amended ("Act"), and
any rules, regulations, policies or requirements of the Securities
Exchange Commission (the "Commission") in respect thereof in
connection with the preparation and filing by the Corporation with
the Commission of its Annual Report on Form 10-K for the year ended
December 31, 1995 and any and all amendments to such Report,
together with such other supplements, statements, instrument and
documents as such attorneys or attorney deem necessary or
appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/ John G. Sebrell (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Robert F. Shuford, do hereby constitute and appoint Robert
F. Shuford, John G. Sebrell, and Eugene M. Jordan, my true and
lawful attorney-in-fact, any of whom acting singly is hereby
authorized for me and in my name and on my behalf as a director
and/or officer of Old Point Financial Corporation (the
"Corporation"), to act and to execute any and all instruments as
such attorneys or attorney deem necessary or advisable to enable
the Corporation to comply with the Securities Exchange Act of 1934,
as amended ("Act"), and any rules, regulations, policies or
requirements of the Securities Exchange Commission (the
"Commission") in respect thereof in connection with the preparation
and filing by the Corporation with the Commission of its Annual
Report on Form 10-K for the year ended December 31, 1995 and any
and all amendments to such Report, together with such other
supplements, statements, instrument and documents as such attorneys
or attorney deem necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/Robert F. Shuford (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Dr. Arthur D. Greene, do hereby constitute and appoint
Robert F. Shuford, John G. Sebrell, and Eugene M. Jordan, my true
and lawful attorney-in-fact, any of whom acting singly is hereby
authorized for me and in my name and on my behalf as a director
and/or officer of Old Point Financial Corporation (the
"Corporation"), to act and to execute any and all instruments as
such attorneys or attorney deem necessary or advisable to enable
the Corporation to comply with the Securities Exchange Act of 1934,
as amended ("Act"), and any rules, regulations, policies or
requirements of the Securities Exchange Commission (the
"Commission") in respect thereof in connection with the preparation
and filing by the Corporation with the Commission of its Annual
Report on Form 10-K for the year ended December 31, 1995 and any
and all amendments to such Report, together with such other
supplements, statements, instrument and documents as such attorneys
or attorney deem necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/ Dr. Arthur D. Greene (SEAL)
Old Point Financial Corporation
Power of Attorney
I, John B. Morgan, do hereby constitute and appoint Robert F.
Shuford, John G. Sebrell, and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or officer
of Old Point Financial Corporation (the "Corporation"), to act and
to execute any and all instruments as such attorneys or attorney
deem necessary or advisable to enable the Corporation to comply
with the Securities Exchange Act of 1934, as amended ("Act"), and
any rules, regulations, policies or requirements of the Securities
Exchange Commission (the "Commission") in respect thereof in
connection with the preparation and filing by the Corporation with
the Commission of its Annual Report on Form 10-K for the year ended
December 31, 1995 and any and all amendments to such Report,
together with such other supplements, statements, instrument and
documents as such attorneys or attorney deem necessary or
appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/ John B. Morgan (SEAL)
Old Point Financial Corporation
Power of Attorney
I, G. Royden Goodson, III, do hereby constitute and appoint
Robert F. Shuford, John G. Sebrell, and Eugene M. Jordan, my true
and lawful attorney-in-fact, any of whom acting singly is hereby
authorized for me and in my name and on my behalf as a director
and/or officer of Old Point Financial Corporation (the
"Corporation"), to act and to execute any and all instruments as
such attorneys or attorney deem necessary or advisable to enable
the Corporation to comply with the Securities Exchange Act of 1934,
as amended ("Act"), and any rules, regulations, policies or
requirements of the Securities Exchange Commission (the
"Commission") in respect thereof in connection with the preparation
and filing by the Corporation with the Commission of its Annual
Report on Form 10-K for the year ended December 31, 1995 and any
and all amendments to such Report, together with such other
supplements, statements, instrument and documents as such attorneys
or attorney deem necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 9th day of January, 1996.
/s/ G. Royden Goodson, III (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Dr. H. Robert Schappert, do hereby constitute and appoint
Robert F. Shuford, John G. Sebrell, and Eugene M. Jordan, my true
and lawful attorney-in-fact, any of whom acting singly is hereby
authorized for me and in my name and on my behalf as a director
and/or officer of Old Point Financial Corporation (the
"Corporation"), to act and to execute any and all instruments as
such attorneys or attorney deem necessary or advisable to enable
the Corporation to comply with the Securities Exchange Act of 1934,
as amended ("Act"), and any rules, regulations, policies or
requirements of the Securities Exchange Commission (the
"Commission") in respect thereof in connection with the preparation
and filing by the Corporation with the Commission of its Annual
Report on Form 10-K for the year ended December 31, 1995 and any
and all amendments to such Report, together with such other
supplements, statements, instrument and documents as such attorneys
or attorney deem necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 12th day of March, 1996.
/s/ H. Robert Schappert (SEAL)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 10,932
<INT-BEARING-DEPOSITS> 65
<FED-FUNDS-SOLD> 513
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 77,604
<INVESTMENTS-CARRYING> 15,020
<INVESTMENTS-MARKET> 15,087
<LOANS> 188,055
<ALLOWANCE> 2,251
<TOTAL-ASSETS> 304,266
<DEPOSITS> 256,535
<SHORT-TERM> 16,296
<LIABILITIES-OTHER> 1,107
<LONG-TERM> 0
0
0
<COMMON> 6,368
<OTHER-SE> 23,960
<TOTAL-LIABILITIES-AND-EQUITY> 304,266
<INTEREST-LOAN> 16,079
<INTEREST-INVEST> 5,455
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 21,534
<INTEREST-DEPOSIT> 8,848
<INTEREST-EXPENSE> 9,531
<INTEREST-INCOME-NET> 12,003
<LOAN-LOSSES> 825
<SECURITIES-GAINS> 9
<EXPENSE-OTHER> 11,884
<INCOME-PRETAX> 3,139
<INCOME-PRE-EXTRAORDINARY> 3,139
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,342
<EPS-PRIMARY> 1.84
<EPS-DILUTED> 1.84
<YIELD-ACTUAL> 8.07
<LOANS-NON> 2,447
<LOANS-PAST> 248
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 3,198
<ALLOWANCE-OPEN> 2,647
<CHARGE-OFFS> 1,720
<RECOVERIES> 499
<ALLOWANCE-CLOSE> 2,251
<ALLOWANCE-DOMESTIC> 2,251
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
EXHIBIT 3. ARTICLES OF INCORPORATION AND BYLAWS
AMENDED: 04.25.95
(ART. III-A - ENTIRETY)
ARTICLES OF INCORPORATION
OLD POINT FINANCIAL CORPORATION
I. Name
The name of the Corporation is Old Point Financial Corporation.
II. Purpose
The purpose for which the Corporation is organized
is to act as a bank holding company and to transact any
and all lawful business, not required to be specifically
stated in the Articles of Incorporation, for which
corporations may be incorporated under the Virginia
Stock Corporation Act.
III. Capital Stock
A. General Authorization. The Corporation shall
have authority to issue 6,000,000 shares of
Common Stock, par value $5.00 per share.
B. No Preemptive Rights. Shareholders shall have no
preemptive rights to acquire any unissued shares
of the Corporation.
C. Cumulative Voting. At all elections of directors
of the Corporation, each holder of Common Stock
shall be entitled to cast as many votes as shall
equal the number of votes which he would be
entitled to cast for the election of directors
with respect to his shares of Common Stock
multiplied by the number of directors to be
elected, and he may cast all such votes for a
single director or may distribute them among as
many candidates as he may see fit.
IV. Certain Business Combinations
A. Higher Vote for Certain Business Combinations.
The affirmative vote of the holders of not less
than 75% of the outstanding shares of Common
Stock of the Corporation shall be required for
the approval or authorization of a Business
Combination (as hereinafter defined). The
foregoing shall not apply to a Business
Combination, and such Business Combination shall
require only such approval as is required by law,
if it shall have been approved by the affirmative
vote of at least 80% of the entire Board of
Directors.
B. Certain Definitions. For purposes of this
Article IV:
1. A "Business Combination" shall mean (i) any
merger or consolidation of the Corporation of
a subsidiary with or into, or the exchange of
shares of Common Stock of the Corporation for
cash or property of, an Acquiring Person, (ii)
any sale, lease, exchange or other disposition
of all or substantially all of the assets of
the Corporation or a subsidiary to or with an
Acquiring Person, (iii) any reclassification
of securities (including any reverse stock
split), recapitalization or other transaction
that would have the effect of increasing the
voting power of an Acquiring Person, or (iv)
any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or
on behalf of an Acquiring Person.
2. An "Acquiring Person" shall mean any
individual, firm, corporation, trust or any
other entity which: (i) beneficially owns,
together with its affiliates and associated
persons, 5% or more of the outstanding shares
of Common Stock of the Corporation; or (ii)
though owning less than 5% of such shares,
proposes or undertakes to obtain control or
exercise a controlling influence over the
Corporation as determined by the Board of
Directors.
C. Amendment or Repeal. The provisions of this
Article shall not be amended or repealed, nor
shall any provision of these Articles of
Incorporation be adopted that is inconsistent
with this Article, unless such action shall have
been approved by the affirmative vote of either:
(i) the holders of at least 75% of the
outstanding shares of Common Stock; or (ii) 80%
of the entire Board of Directors and the holders
of the requisite number of shares required under
Virginia law for the amendment of articles of
incorporation.
D. Certain Determinations by the Board of Directors.
When evaluating a proposed Business Combination,
the Board of Directors of the Corporation shall,
in connection with the exercise of its judgment
in determining what is in the best interests of
the Corporation and its stockholders, give due
consideration not only to price or other
consideration being offered, but also to all
other relevant factors, including, without
limitation, (i) the financial and managerial
resources and future prospects of the Acquiring
Person, (ii) the possible effects on the
business, employees, customers and creditors of
the Corporation and its subsidiaries. In
evaluating any proposed Business Combination, the
Board of Directors shall be deemed to be
performing their duly authorized duties and
acting in good faith and in the best interests of
the Corporation and its stockholders.
Any determination made in good faith by the Board
of Directors, on the basis of information at the
time available to it, whether (i) an individual,
firm, corporation or other entity is an Acquiring
Person, (ii) the number of shares of Common Stock
beneficially owned, directly or indirectly, by
such person is more than 5% of the outstanding
shares, or (iii) any individual, firm,
corporation or other entity is an "affiliate" or
"associated person" of an Acquiring Person, shall
be conclusive and binding for all purposes of
this Article IV.
V. Directors
The number of directors shall be fixed by the
Bylaws. Absent any Bylaw fixing the number of directors,
that number shall be 25.
VI. Indemnification and Limit on Liability
A. To the full extent permitted by the Virginia
Stock Corporation Act, as it exists on the date
hereof or may hereafter be amended, each director
and officer shall be indemnified by the
Corporation against liabilities, fines, penalties
and claims imposed upon or asserted against him
(including amounts paid in settlement) by reason
of having been such director or officer, whether
or not then continuing so to be, and against all
expenses (including counsel fees) reasonably
incurred by him in connection therewith, except
in relation to matters as to which he shall have
been finally adjudged liable by reason of his
willful misconduct or a knowing violation of
criminal law in the performance of his duty as
such director or officer. The right of
indemnification hereby provided shall not be
exclusive of any other rights to which any
director may be entitled.
B. To the full extent that the Virginia Stock
Corporation Act, as it exists on the date hereof
or may hereafter be amended, permits the
limitation or elimination of the liability of
directors or officers, a director or officer of
the Corporation shall not be liable to the
Corporation or its stockholders for monetary
damages.
C. The Board of Directors is hereby empowered, by a
majority vote of a quorum of disinterested
directors, to indemnify or contract in advance to
indemnify any person not specified in subsection
(A) of this Article against liabilities, fines,
penalties and claims imposed upon or asserted
against him (including amounts paid in
settlement) by reason of having been an employee,
agent or consultant of the Corporation, whether
or not then continuing so to be, and against all
expenses (including counsel fees) reasonably
incurred by him in connection therewith, to the
same extent as if such person were specified as
one to whom indemnification is granted in
subsection (a) of this Article.
D. Every reference in this Article to director,
officer, employee, agent or consultant shall
include (i) every director, officer, employee,
agent or consultant of the Corporation or any
consultant of the Corporation or any corporation
the majority of the voting stock of which is
owned directly or indirectly by the Corporation,
(ii) every former director, officer, employee,
agent or consultant of the Corporation, (iii)
every person who may have served at the request
of or on behalf of the Corporation as a director,
officer, employee, agent, consultant or trustee
of another corporation, partnership, joint
venture, trust or other entity, and (iv) in all
of such cases, his executors and administrators.
E. The provisions of this Article VI shall be
applicable from and after its adoption even
though some or all of the underlying conduct or
events relating to such a proceeding may have
occurred before such adoption. No amendment,
modification or repeal of this Article VI shall
diminish the rights provided hereunder to any
person arising from conduct or events occurring
before the adoption of such amendment,
modification or repeal.
F. In the event there has been a change in the
composition of a majority of the Board of
Directors after the date of the alleged act or
omission with respect to which indemnification is
claimed, any determination as to indemnification
and advancement of expenses with respect to any
claim for indemnification made pursuant to
subsection (A) of this Article VI shall be made
by special legal counsel agreed upon by the Board
of Directors and the proposed indemnitee are
unable to agree upon such special legal counsel,
the Board of Directors and the proposed
indemnitee each shall select a nominee, and the
nominee shall select such special legal counsel.
08.11.92
BYLAWS OF
OLD POINT FINANCIAL CORPORATION
ARTICLE I.
STOCKHOLDERS
AMENDED: 08/11/92
1.1 Annual Meeting. The annual meeting of the
stockholders of the Corporation for the election of
directors and for the transaction of such other business
authorized or required to be transacted by the
stockholders shall be held in Hampton, Virginia, at the
main office of the Old Point National Bank, or at any
other convenient place authorized by the Board of
Directors, on the fourth Tuesday in April of each year,
but if no election of directors is held on that day, it
may be held on a subsequent date designated by the Board
of Directors or stockholders in accordance with law.
1.2 Special Meetings. Special meetings of the
stockholders for any purpose or purposes shall be held
whenever called by the Chairman of the Board, or by the
President if there is no Chairman of the Board, or by
the Board of Directors or by the holders of not less
than one-tenth of all the shares entitled to vote at the
meeting.
1.3 Notice of Meetings. Notice of the
annual or any special meeting shall be mailed at least
ten days, and not more than fifty days, prior to the
date of the meeting to each registered stockholder at
his address as the same appears on the books of the
Corporation. If the meeting shall be called to act on an
amendment to the Articles of Incorporation or on a plan
of merger, consolidation or exchange, or on a reduction
of stated capital, or upon a proposed sale of all or
substantially all of the assets of the Corporation,
notice shall be given not less than twenty-five nor more
than fifty days before the date of the meeting, and such
notice shall be accompanied by a copy of the proposed
amendment or plan of merger, consolidation, or exchange,
or the proposed plan for reduction of capital.
1.4 Quorum. At any meeting of the stockholders
the holders of a majority of the shares issued and
outstanding, having voting power (which shall not
include any treasury stock held by the Corporation),
being present in person or represented by proxy, shall
be a quorum for all purposes, including the election of
directors.
1.5 Voting. At all meetings of the
stockholders, stockholders shall be entitled to vote,
either in person or by proxy duly appointed by an
instrument in writing, subscribed by such stockholder or
by his authorized attorney; at all meetings such
stockholder shall have one vote for each share of stock
entitled under the provisions of the charter to voting
rights which may be registered in his name upon the
books of the Corporation on the day preceding that on
which the transfer books may be closed by order of the
Board of Directors. Treasury stock held by the
Corporation shall not be entitled to vote.
ARTICLE II
BOARD OF DIRECTORS
2.1 Number. The business and affairs of the
Corporation shall be managed and controlled by a Board
of Directors which shall consist of not less than five
nor more than twenty-five shareholders, the exact number
within such minimum and maximum limits to be fixed and
determined from time to time by the Board of Directors
or by resolution of the shareholders at any meeting
thereof. A director may be removed at any time with or
without cause by a vote of the stockholders.
2.2 Term of Office. Each director shall serve
for the term of one year and until his successor shall
have been duly chosen and qualified.
2.3 Vacancies. Any vacancy occurring in the
Board of Directors, including a vacancy resulting from
an increase of not more than two in number of directors,
may be filled by the affirmative vote of a majority of
the remaining directors though less than a quorum of the
Board of Directors.
2.4 Stockholder Nominations of Directors.
Subject to the rights of holders of any class or series
of stock having a preference over the Common Stock as to
dividends or upon liquidation, nominations for the
election of Directors shall be made by the Board of
Directors or a committee appointed by the Board of
Directors or by any stockholder entitled to vote in the
election of Directors generally. However, any
stockholder entitled to vote in the election of
Directors generally may nominate one or more persons for
election as Directors at a meeting only if written
notice of such stockholder's intent to make such
nomination or nominations has been given, either by
personal delivery or by United States mail, postage
prepaid, to the President of the Corporation not less
than 14 days nor more than 50 days in advance of such
meeting, provided, however, that if less than 21 days'
notice of the meeting is given to stockholders, such
nomination shall be mailed or delivered to the President
of the Holding Company not later than the close of
business on the seventh day following the day on which
the notice of the meeting was mailed. Each such notice
shall set forth (a) the name and address of the
stockholder who intends to make the nomination and of
the person or persons to be nominated; (b) a
representation that the stockholder is a holder of
record of stock of the Corporation entitled to vote at
such meeting and intends to appear in person or by proxy
at the meeting to nominate the person or persons
specified in the notice; (c) a description of all
arrangements or understandings between the stockholder
and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination
or nominations are to be made by the stockholder; (d)
the principal occupation of each nominee; (e) the total
number of shares that to the knowledge of the notifying
stockholder will be voted for each of the nominees; and
(f) the consent of each nominee to serve as a Director
of the Corporation if so elected. The Chairman of the
meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing
procedure.
ARTICLE III
DIRECTORS' MEETINGS
3.1 Regular Meetings. Regular meetings of the
Board of Directors shall be held annually, immediately
following each annual meeting of stockholders, for the
purpose of electing officers and carrying on such other
business as may properly come before such meeting, and,
if necessary, immediately following each special meeting
of stockholders to consider and act upon any matter
which may properly come before such meeting. Any such
meeting shall be held at the place where the
stockholders' meeting was held. The Board of Directors
may also adopt a schedule of additional meetings which
shall be considered regular meetings, and such meetings
shall be held at the time and place, within or without
the Commonwealth of Virginia, as the Chairman or, in his
absence, the President shall designate.
3.2 Special Meetings. Special meetings of the
Board of Directors shall be held on the call of the
Chairman, the President, any three members of the Board
of Directors or a majority of the Board of Directors at
the principal office of the Corporation or at such other
place as shall be designated.
3.3 Telephone Meetings. The Board of Directors
may participate in a meeting by means of conference
telephone or similar communications equipment whereby
all persons participating in the meeting can hear each
other, and participation by such means shall constitute
presence in person at such meeting. When such a meeting
is conducted by means of conference telephone or similar
communications equipment, a written record shall be made
of the action taken at such meeting.
3.4 Notice of Meetings. No notice need be given
of regular meetings of the Board of Directors.
Notice of special meetings of the Board of
Directors shall be mailed to each director at least
three (3) days, or telegraphed at least two (2) days
prior to the date of the meeting and must set forth the
purpose for which the meeting is called.
3.5 Quorum; Required Vote. A majority of the
directors shall constitute a quorum for the transaction
of business by the Board of Directors. The act of the
majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of
Directors unless the act of a greater number is required
by law or these Bylaws.
3.6 Waiver of Notice. Notwithstanding any other
provisions of law, the Articles of Incorporation or
these Bylaws, whenever notice of any meeting for any
purpose is required to be given to any director a waiver
thereof in writing, signed by the person entitled to
said notice, whether before or after the time stated
therein, shall be the equivalent to the giving of such
notice.
A director who attends a meeting shall be deemed
to have had timely and proper notice of the meeting
unless he attends for the express purpose of objecting
to the transaction of any business because the meeting
is not lawfully called or convened.
3.7 Actions by Directors Without Meeting. Any
action required to be taken at a meeting of the
directors, or any action which may be taken at a meeting
of the directors, may be taken without a meeting if a
consent in writing, setting forth the action, shall be
signed either before or after such action by all of the
directors. Such consent shall have the same force and
effect as a unanimous vote.
ARTICLE IV
COMMITTEES OF DIRECTORS
4.1 Executive Committee. The Board of
Directors, by resolution adopted by a majority of the
number of directors fixed by these Bylaws, may designate
four or more directors to constitute an Executive
Committee. A majority of the members of the Executive
Committee shall constitute a quorum. The Executive
Committee shall meet on the call of any of its members.
Notice of any such meeting shall be given by mail,
telephone, telegraph or other means by the close of
business on the day before such meeting is to be held.
The Executive Committee shall have and may exercise all
of the authority of the Board of Directors except to
approve (i) an amendment of the Articles of
Incorporation; (ii) a plan of merger or consolidation;
(iii) a plan of exchange under which the Corporation
would be acquired; (iv) the sale, lease or exchange, or
the mortgage or pledge for a consideration other than
money, of all, or substantially all, the property and
assets of the Corporation otherwise than in the usual
and regular course of its business; (v) the voluntary
dissolution of the Corporation; (vi) revocation of
voluntary dissolution proceedings; (vii) any employee
benefit plan involving the issuance of common stock;
(viii) the compensation paid to a member of the
Executive Committee; or (ix) an amendment of these
Bylaws.
4.2 Audit Committee. The Board of Directors may
appoint an Audit Committee consisting of not less than
three directors, none of whom shall be officers, which
Committee shall regularly review the adequacy of
internal financial controls, review with the
Corporation's independent public accountants the annual
audit and other financial statements, and recommend the
selection of the Corporation's independent public
accountants.
The Audit Committee of the Board of Directors of
The Old Point National Bank may also serve as the Audit
Committee for the Board of Directors of the Corporation.
4.3 Other Committees. The Board of Directors
may designate such other committees with limited
authority as it may deem advisable.
4.4 Telephone Meetings. Committees may
participate in meetings by means of conference telephone
or similar communications equipment whereby all persons
participating in the meeting can hear each other, and
participation by such means shall constitute presence in
person at such meeting. When such meeting is conducted
by means of a conference telephone or similar
communications equipment, a written record shall be made
of the action taken at such meeting.
4.5 Actions by Committees Without Meetings. Any
action which may be taken at a committee meeting, may be
taken without a meeting if a consent in writing, setting
forth the action, shall be signed either before or after
such action by all of the members of the committee. Such
consent shall have the same force and effect as an
unanimous vote.
4.6 Committee Rules. Unless the Board of
Directors otherwise provides, each committee designated
by the Board of Directors may adopt, amend and repeal
rules for the conduct of its business. In the absence of
direction by the Board of Directors or a provision in
the rules of such committee to the contrary, a majority
of the entire authorized number of members of such
committee shall constitute a quorum for the transaction
of business, the vote of a majority of the members
present at a meeting at the time of such vote if a
quorum is then present shall be the act of such
committee. Except to the extent that these Bylaws
contain provisions to the contrary, in other respects
each committee shall conduct its business in the same
manner as the Board of Directors is required to conduct
its business.
ARTICLE V
OFFICERS AND EMPLOYEES
5.1 Chairman of the Board. The Board of
Directors may appoint one of its members to be Chairman
of the Board to serve at the pleasure of the Board. He
shall preside at all meetings of the Board of Directors.
The Chairman of the Board shall supervise the carrying
out of the policies adopted or approved by the Board. He
shall have general executive powers, as well as the
specific powers conferred by these Bylaws. He shall also
have and may exercise such further powers and duties as
from time to time may be conferred upon or assigned to
him by the Board of Directors.
5.2 President. The Board of Directors shall
appoint one of its members to be President of the
Corporation. In the absence of the Chairman, he shall
preside at any meeting of the Board. The President shall
have general executive powers and shall have and may
exercise any and all other powers and duties pertaining
by law, regulation, or practice, to the Office of
President or imposed by these Bylaws. He shall also have
and may exercise such further powers and duties as from
time to time may be conferred upon or assigned to him by
the Board of Directors.
5.3 Vice President. The Board of Directors may
appoint one or more Vice Presidents. Each Vice President
shall have such powers and duties as may be assigned to
him by the Board of Directors. One Vice President shall
be designated by the Board of Directors, in the absence
of the President, to perform all the duties of the
President.
5.4 Secretary. The Board of Directors shall
appoint a Secretary or other designated officer who
shall be Secretary of the Board and of the Corporation,
and shall keep accurate minutes of all meetings. He
shall attend to the giving of all notices required by
these Bylaws to be given. He shall be custodian of the
corporate seal, records, documents and papers of the
Corporation. He shall provide for the keeping of proper
records of all transactions of the Corporation. He shall
have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the
Office of Secretary or imposed by these Bylaws. He shall
also perform such other duties as may be assigned to
him, from time to time, by the Board of Directors.
5.5 Other Officers. The Board of Directors may
appoint such other officers as from time to time may
appear to the Board of Directors to be required or
desirable to transact the business of the Corporation.
Such officers shall respectively exercise such powers
and perform such duties as to pertain to their several
offices, or as may be conferred upon, or assigned to,
them by the Board of Directors, the Chairman of the
Board, or the President.
5.6 Clerks and Agents. The Board of Directors
may appoint, from time to time, such clerks, agents and
employees as it may deem advisable for the prompt and
orderly transaction of the business of the Corporation,
define their duties, fix the salaries to be paid to them
and dismiss them. Subject to the authority of the Board
of Directors, the President, or any other officer of the
Corporation authorized by him, may appoint and dismiss
all or any clerks, agents and employees and prescribe
their duties and the conditions of their employment, and
from time to time fix their compensation.
5.7 Tenure of Office. The President shall hold
his office for the current year for which the Board of
which he shall be a member was elected, unless he shall
resign, become disqualified, or be removed; and any
vacancy occurring in the Office of President shall be
filled promptly by the Board of Directors.
ARTICLE VI
CERTIFICATES OF STOCK
6.1 Form and Issuance. Certificates of stock
shall be in such form as may be approved by the Board of
Directors and shall be signed by the President or any
Vice President and the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer,
and may (but need not) be sealed with the seal of
Corporation or a facsimile thereof. Any such signature
may be a facsimile.
6.2 Lost, Stolen or Destroyed Stock
Certificates; Issuances of New Certificates. The
Corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it,
alleged to have been lost, stolen or destroyed, and the
Corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to
give the Corporation a bond sufficient to indemnify it
against any claim that may be made against it on account
of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
6.3 Transfer. The Board of Directors shall have
power and authority to make all such rules and
regulations as they may deem expedient concerning the
issue, registration and transfer of certificates of
stock and may appoint transfer agents or clerks and
registrars thereof. Unless otherwise provided, transfers
of shares of stock by the Corporation shall be made upon
its books by surrender of the certificates for the
shares transferred accompanied by an assignment in
writing by the holder and may be accomplished either by
the holder in person or by a duly authorized attorney-
in-fact.
6.4 Recognition of Other Stock Certificates.
The Corporation will recognize as its own common stock
certificates those stock certificates representing
shares of common stock of The Old Point National Bank of
Phoebus, which certificates have not been heretofore
exchanged for certificates representing shares of common
stock of the Corporation.
ARTICLE VII
AMENDMENTS
7.1 New Bylaws and Alterations. These Bylaws
may be amended or repealed and new Bylaws may be made at
any regular or special meeting of the Board of Directors
by the vote of a majority thereof. However, Bylaws made
by the Board of Directors may be repealed or changed and
new Bylaws may be made by the stockholders and the
stockholders may prescribe that any Bylaw made by them
shall not be altered, amended or repealed by the
directors.
ARTICLE VIII
CORPORATE SEAL
8.1 The President, any Vice President, the
Secretary or any Assistant Secretary, or other officer
thereunto designated by the Board of Directors, shall
have the authority to affix the corporate seal to any
document requiring such seal, and to attest the same.
Such seal shall be substantially in the following form:
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Fiscal Year. The fiscal year of the
Corporation shall be the calendar year.
9.2 Execution of Instruments. All agreements,
indentures, mortgages, deeds, conveyances, transfers,
certificates, declarations, receipts, discharges,
releases, satisfactions, settlements, petitions,
schedules, accounts, affidavits, bonds, undertakings,
proxies and other instruments or documents may be
signed, executed, acknowledged, verified, delivered or
accepted in behalf of the Corporation by the Chairman of
the Board, or the President, or any Vice President, or
the Secretary. Any such instruments may also be
executed, acknowledged, verified, delivered or accepted
in behalf of the Corporation in such other manner and by
such other officers as the Board of Directors may from
time to time direct. The provisions of this Section 9.2
are supplementary to any other provision of these
Bylaws.
9.3 Records. The Articles of Incorporation, the
Bylaws and the proceedings of all meetings of the
shareholders, the Board of Directors, standing
committees of the Board, shall be recorded in
appropriate minute books provided for the purpose. The
minutes of each meeting shall be signed by the Secretary
or other officer appointed to act as Secretary of the
meeting.
ARTICLE X
EMERGENCY BYLAWS
10.1 Effect.
The provision of this Article X shall be effective
during any emergency resulting from an attack on the
United States or any nuclear or atomic disaster
(hereinafter called an "Emergency").
10.2 Board of Directors.
During an emergency, the director or directors in
attendance at the meeting shall constitute a quorum. A
meeting of the Board of Directors may be called by any
director or officer of the Corporation. Notice of any
meeting during an emergency may be given only to such of
the directors as it may be feasible to reach at the time
and by such means as may be feasible at the time,
including publication or radio. If no director is
present, the three most senior officers of the
Corporation, as hereinafter defined, present shall be
deemed directors for the purpose of such meeting and
shall have all of the authority of the Board of
Directors. As used in this Article, officers shall take
seniority as follows:
President
Executive Vice President (if the Board of
Directors has elected
such an officer)
Senior Vice President (if the Board of
Directors has elected
such an officer)
First Vice President (if the Board of
Directors has elected
such an officer)
Vice President (if the Board of
Directors has elected
such an officer)
Treasurer
Assistant Vice President (if the Board of
Directors has elected
such an officer)
Assistant Treasurer (if the Board of
Directors has elected
such an officer)
Secretary
Within each officer class, officers shall take
seniority on the basis of length of service in such
office or, in the event of equality, length of service
as an officer of the Corporation.
10.3 Executive Authority.
The Board of Directors shall provide lines of
succession of executive authority which, until altered
by the Board of Directors either before or during an
emergency, shall be effective during an emergency.
10.4 Operations.
It shall be the duty of the senior officer present
at each office of the Corporation during an emergency
when communication with the President is impractical,
and he is hereby authorized, to take such action as he
shall think necessary or desirable to protect the assets
of the Corporation and provide service to its customers.
10.5 Indemnity.
No officer, director or employee acting in
accordance with this Article shall be liable except for
willful misconduct.
